Many people shy away from buying a used vehicle because they’re afraid of buying someone else’s problems. Yet our reliability data show that cars, overall, are much more reliable than they used to be. Rust and exhaust-system problems, once common in older cars, are no longer of major concern. And reliable late-model vehicles usually have few problems overall. When properly maintained, many vehicles can now reach 200,000 miles or more without a major problem.

That said, if a car hasn’t been well maintained, reliability and value are wild cards. Our analysis assumes that the used cars are in good condition.

Many buyers are also concerned about higher maintenance and repair costs for older cars, especially because the factory warranty will have expired for most four- and five-year-old vehicles. But our data show that for most late-model cars, savings on depreciation, tax, and interest far outweigh the increased maintenance and repair costs—as long as you buy a relatively reliable car. Steer clear of trouble-prone models, which can hit you with large unexpected repair bills. For example, if you buy a three-year-old Land Rover Range Rover, maintenance and repair can cost an average of $2,000 annually over five years.

Bottom line
While most used cars on the market are five years old or older, it’s worth looking for late-model vehicles that are three years old or less. You can often find a late-model car with many of the latest safety features, such as electronic stability control and side and curtain air bags. You might also be able to find one with a transferable factory warranty.

With any used car, you avoid the car’s worst period of depreciation. If you buy a reliable vehicle in good condition and also budget for maintenance, all you might give up is that new-car smell.