You've heard me rant and rave in this column before about how I will never buy another new car because they depreciate 45% in the first three years and I don't want to lose all that money. Rather, by buying a 3-year-old used vehicle, I will SAVE all that money. 45% savings on a big ticket item like a car? That is REAL money.
But there's an easy way to save an additional 20%! All you have to do is pick and choose wisely among used cars. The key is not to buy the most popular makes and models because they are in demand so they can command a higher price.
Auto website Edmunds.com coined the term "dark horse car," which simply refers to vehicles that are similar to the most popular models but are less well known. For example, Edmunds says the Nissan Altima is similar in features and quality to the Toyota Camry, but less expensive because it doesn't have the famous name. Edmunds says "dark horses" can be as much as twenty percent cheaper.
Let's test that premise by going to a car-buying website for prices. OK, I found two used vehicles - one famous, one dark horse - with nearly identical mileage. Let's compare:
Famous Name Versus Dark Horse
Used 2008 Toyota Camry with 9,789 miles: $31,809.
Used 2008 Nissan Altima with 9,851 miles: $24,995.
SAVINGS= $ 6,814.
Sure enough, you are able to save 21 percent if you buy the "dark horse" Nissan instead of the "famous" Toyota.
To help cement your understanding of dark horse vehicles, here are a few other dark horse pairings, courtesy of Edmunds.com.
Famous Name Vehicle Dark Horse Alternate
BMW 5 Series Cadillac CTS
Chevrolet Silverado Dodge Ram
Chevrolet Tahoe Buick Enclave
Dodge Caravan Kia Sedona
Honda Civic Mazda 3
Honda Fit Suzuki SX4
Honda Odyssey Ford Flex
Lexus GS Hyundai Genesis
Toyota Camry Chevy Malibu
Toyota Prius Honda Insight