Americans buy 50 million used cars a year, according to Paul Taylor, the chief economist for the National Automobile Dealers Association. That's more than three times the number of new cars sold.

Today's cars are of higher quality, so they last longer and are more reliable as used cars downstream. Major model redesigns occur less frequently (often on four- or six-year cycles), thus a two- or three-year-old vehicle isn't so quickly out of style. New cars and trucks are more expensive than they've ever been, so affordability is an issue for many. Most significant is the continuing increase in the popularity of leasing, which puts tons of two- or four-year-old cars, trucks, and SUVs--many in excellent condition with low mileage and some portion of the factory warranty remaining--back on dealer lots as those leases mature.

As vehicle quality, performance, and feature content have increased over the years, so has the level of new-car pricing, which is only logical. But nearly every car depreciates, and it's often possible to get more car for the same money by buying used. For example, one of our editors went midsize-sport-sedan shopping a few years back. He narrowed his choices to a new, fully loaded Maxima or a three-model-year-old six-cylinder 5 Series BMW for the same price. The BMW had 22,000 miles on it, had just come off a 30-month lease, had been religiously serviced, and was immaculate. Guess which one our guy went for?

How Much You Save

We buy used cars to save money, right? That's often true, but it's not that simple. The percentage of savings you can achieve is affected by the popularity and resale reputation of the vehicle you want.

Choose a model that doesn't depreciate much, like a Honda Accord or a Toyota Sequoia, and you won't save that much compared with new. Select a used car whose new version isn't as hot a seller and that's loaded with rebates, and its price used will be commensurately less a few years down the depreciation highway. Take a look at brands that are on the rebound, like Infiniti and Cadillac, and you'll see that their ability to hold their value over time hasn't yet caught up with their increasing popularity.

To illustrate these points, we compared the new and used prices of four vehicles from differing brands. For consistency, we chose models that were substantially the same in the 2001 model year as they are today:

Bottom line: It's only logical that popular, high-quality models will hold their value; that's why they were hot-sellers in the first place. But if you're buying used in search of that extra increment of value, a well-maintained, low-mile version of something that wasn't as much of a diva when it was new can save you extra bucks and still meet your transportation needs.

Source: Motor Trend