Bargain Hunter

From Certified Pre-owned Vehicles, a special advertising feature

We seek out the world's best CPO buys

 

The Honda Civic Hybrid: A steal (when gas prices are low)

Any certified pre-owned auto will save you a bundle compared with an equivalent brand-new vehicle. But because depreciation varies from model to model, some cars make better CPO buys than others.

Depreciation — a car’s drop in value over time — is the chief determining factor when it comes to finding certified pre-owned bargains. New vehicles start losing value as soon as they leave the lot, with first-year depreciation ranging from 20% to 35%, but some models devalue faster than others. The ones to look for as CPOs are either the very popular models (since there are usually plenty of them available, keeping prices low), or the truly unpopular models (which nobody wants, keeping prices low).

Fluctuations in gas prices can also influence vehicle depreciation. For example, when gas is more expensive, small cars generally hold their value better, while the prices of large and thirsty autos may sag. The reputation of a particular make or model could affect its depreciation rate too, as a car with perceived durability will often fetch higher prices as a used model.

With expert input from Jerry Reynolds — radio’s “The Car Pro,” heard Saturdays from 9 a.m. to noon on KFWB-AM (980), Los Angeles — we looked at some of today’s most attractive certified pre-owned buys.

The Toyota Camry is what Reynolds dubbed a “double whammy” CPO: It’s the best-selling car in America, so there’s plenty of pre-owned supply, plus it took a depreciation hit last year because of the Toyota recalls. “A 2011 Camry right now is one of the best buys out there,” Reynolds said. “This is a car that’s $7,000 to $8,000 under a brand new one, with 15,000 miles on it — and a current-year model! Usually when I’m looking at CPOs they’re a year old — there are 2011 Camrys out there with low miles for $16,000 or $17,000.”

Reynolds is also partial to the Jaguar-Land Rover brand — he owns a 2008 certified pre-owned Jaguar XKR convertible and his wife drives Range Rovers.

“Jaguars tend to be good buys used because they’re a heavy depreciation car. I also have a Range Rover for the same reason. They’re ‘sleepers’ because there’s still this stigma of them being bad cars and being in the shop all the time. I haven’t had either one of these cars in the shop and I’m on my way to my 10th Rover in a row!”

Less glamorous but just as pleasingly priced are the Ford Fusion and Chevrolet Malibu, Reynolds said. “These are cars that were used heavily as rental cars … and then they flooded the [used] market with them. They’re very good quality cars, but because there are so many of them out there it’s driven the prices down.”

Mid-size SUVs like the Toyota Highlander, Chevrolet Equinox and Ford Edge can also be standout certified deals. “The Edge has, arguably, gotten to be an even better buy because of the popularity of the 2011, where they made some nice changes to it,” Reynolds said. “Now everybody wants that model and that has driven prices down on the 2008, ’09 and ’10 Edge.”

Hybrids can be tempting CPO bargains, but you should move fast to snag one because if gas prices continue to climb they’ll soon be in high demand and priced accordingly. “You can pick up an ’08 or ’09 Ford Escape Hybrid, for instance, which is pretty expensive new at around 35 grand … with low mileage for under 20 grand,” Reynolds said. “Same story with the Honda Civic Hybrid — you can pick up an ’09 or maybe even a 2010 Civic Hybrid right now for under $20,000.”

The discontinuation of both Pontiac and Saturn in 2009 has dramatically affected those vehicles’ resale values, said Reynolds. Yet unlike some defunct brands, Pontiacs and Saturns share many parts with sister GM models still in production — so it won’t be a struggle to find spare parts. “I’ve been watching the Pontiac and Saturn market,” Reynolds said. “Primarily the Saturn Outlook, which was one of their most popular vehicles. I was also watching the Pontiac G6 and G8 — a couple of other popular cars that were really good cars.… [All three] have become really good [CPO] buys, just since the first of this year.”

Another perennial CPO favorite is the BMW 3-Series — and not just because they’re popular and plentiful. “[BMW] has the best CPO incentives out there, of any manufacturer,” Reynolds said. “They’ve always got something going on — either free maintenance or low-rate financing.”

—Paul Rogers, Custom Publishing Writer

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