A reliable used luxury car can make a great alternative to a new car, because years earlier, luxury models were fitted with many of the features just now trickling into new mainstream cars with similar asking prices. The first thing you need to weigh is the value of having more features for less money versus having a comprehensive factory warranty and the ability to really know what you're getting. You don't have to worry about potential service problems or concealed collision damage with a new car. Further, you can have your choice of color, trim line, and option level. And financing rates are typically lower than for a used vehicle.
Beyond luxury car prices, the key drawback with buying a new car is rapid depreciation. A new car can shed half of its value in its first two or three years on the road, amounting to tens of thousands of dollars for some luxury cars. If you have financed the new car with a low down payment, you can easily find yourself owing more than the car is worth.
If you decide on a used car, you should have plenty of choice. The used-car market is about three times the size of the new-car market. And most luxury-brand automakers offer certification programs that provide some significant warranty protection.
Used cars that are just a couple years old have typically been the sweet spot, as the models are still contemporary but have already taken their biggest depreciation hit. However, the recession has impacted late-model used car availability, due to a drastic drop in new car sales and a period of decreased leasing, a primary source for nearly new luxury cars.
Modern cars, if soundly maintained, can stay on the road for 150,000 miles or longer. Rust, for example, isn't nearly the problem it was years ago. Solid-state electronics have eliminated the need for a lot of regular servicing that was necessary in the past.
The key to selecting a good used vehicle is to focus on reliability, even when a prospective automobile is still covered by its original factory warranty. Look for a car that has done well in our Reliability judgments.
CR's reliability scores are no guarantee, of course, but they do carry the weight of probability. If you shop for luxury cars with top-notch reliability scores, the odds are on your side. At the same time, every used car is unique. A careful pre-purchase inspection remains a vital part of the process. If you do your homework and take care in the car selection, a used luxury car can save you significant money in the long run.
Whether buying new or used, it is important to do research so you can choose a good model, and follow that up with effective negotiation.
Learn more in our new and used car buying guides.
Check our Car Brand Report Cards to learn more about each automaker.