This is the first in a regular series of columns about used cars and good value.
That sounds pretty simple but try doing an internet search — or using AI — for used vehicles with the best value. If you’re like me, you’ll get a list of cars that have a low rate of depreciation. And that’s often the opposite of what I see as good value.
What we’re looking for is that gem that has been under-valued by the market and has depreciated, undeservedly, faster than its competitors.
As a starting point, this column will look at vehicles that are in the 40%-60% range of their original cost — roughly half price. Then we’ll examine them according to traditional value indicators like maintenance and reliability, as well as not-so-traditional indicators such as electronics and safety. Hopefully, it will help someone find a new-to-you set of wheels that provides more bang, or whatever you value, for your buck.
My pattern when it comes to buying used vehicles is to look for a 3-5 year-old model that sells for roughly half its original price.
And, of course, it has to represent good value. Ideally, it’s accumulated less than 100,000 kilometres and has at least an average or above-average rating when it comes to reliability and maintenance costs.
Applying these criteria will likely mean that you’ll see different models than what are normally recommended as good used vehicles. That’s because most recommended used vehicles have very low depreciation compared to their peers.
I’m talking about you, Toyota.
While I firmly believe in Toyota quality — I’ve had two Toyotas with 400,000 km in my garage — I find them too expensive as used vehicles. The value often isn’t there because the cost saving in maintenance for the used Toyota is less than the higher price differential. I’ll acknowledge, however, that there is a cost in the hassle associated with vehicle repairs. And the re-sale price accounts for something.
In the past, my search for both price and value has landed me behind the wheel of a Pontiac Vibe, which was a clone of the Corolla-based Toyota Matrix. It was manufactured at a joint GM-Toyota plant in California until it was discontinued following the 2008-2009 financial crisis. Because the Vibe had a different name plate, it sold for less money than the Matrix as a used car. But the quality was still there, as attested by the fact it was still running at 430,000 km.
At that point in my life, I valued gas mileage, reliability and low cost and the Vibe delivered in spades.
Most recently, value for me has meant a 2017 Cadillac XT5. It has the super-comfortable, luxurious and quiet ride that I’ve grown to appreciate as my birthdate slides further into the depths of the last century. And I love the low, confident, growl when you push down on the gas pedal and sink back into the soft leather seats. Beyond that, Consumer Reports rates its reliability as above average for most years. And the cost of repairs is considered “moderate” by other publications.
The clincher was the high depreciation, which some might consider a negative. It sold for about 40% of its original price.
I’m guessing that the high depreciation has more to do with Cadillac’s image as your grandfather’s car, to borrow a line from a famous Oldsmobile advertising campaign. I didn’t care so much about that.
I was hooked when I test drove the Caddy the day after test driving a Lexus RX and found that I liked the Caddy driving experience better. And the Caddy was at least $10,000 less than the Lexus. Given that the maintenance cost of the Caddy was only about $300 more per year at the seven-year mark than the Lexus, I determined that it would take at least 30 years to compensate for the price premium. Using that criteria, the Cadillac represented a very good value.
Now you might argue that the Lexus will be worth more when it comes to re-sale value but, truthfully, when I plan to sell this car five years from now, there won’t be a huge difference between the Caddy and the Lexus. They will both be 12-year-old cars just steps away from the scrap yard.
The moral of the story is that there are many ways of determining value when it comes to used cars. Price is a big part of the value equation, so we start with the premise of half-price cars. Then we adjust the lens to take in other value indicators such as maintenance costs and then “nice-to-have” items like CarPlay and heated seats. We hope you’ll find this…of value.
Brad Honywill is an award-winning veteran journalist and former Toronto Sun Assistant City Editor.
