CR: Used Cars Can Save You Plenty

September 3, 2008
Consumer Reports' latest issue dispenses some wisdom that penny-pinching fathers have been harping on since the dawn of time: It's nearly always cheaper to buy a used car than a new one.

Specifically, Consumer Reports focused on late-model vehicles from one to three years old. In the case of a "reliable three-year-old car," says the magazine, enough money can be saved over the first five years of ownership to pay for all the gas used during that time.

Their findings from the study showed that total savings over the first five years ring in at 32 percent for a three-year-old car. A one-year-old car will save buyers 19 percent, they found, and a two-year-old car 27 percent.

Using the Toyota Camry as an example, CR found that a 2005 Toyota Camry V-6 has the potential to save a consumer around $13,000 over five years when compared to purchasing a brand-new 2008 Toyota Camry optioned the same way. And assuming a gas price of $4 per gallon, that consumer would be able to pay for all gasoline costs during that period and still be $2,500 ahead (assuming 12,000 miles driven per year).

Consumer Reports based its five year owner costs on depreciation (calculated using CR's Auto Price Service), fuel costs ($4 per gallon for regular, $4.20 for premium), annual mileage of 12,000, average insurance costs based on IIHS data, a five-year car loan with 15 percent down, reliability data from their own 2007 Annual Auto Reliability Survey, and sales tax computed using the national average at the time of purchase.

The full report is available in the October issue of Consumer Reports, on sale September 2 on newsstands and online at their site.

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