Hammer Time: The Sweet Spot

by Steven Lang

Updated: May 16th, 2014 Published: December 26th, 2008

We used to call it 60-80. You could buy a two-year-old used car with 80 percent of it’s life left for 60 percent of the new car price. Then, as Detroit & Co. started to overproduce ad nauseam, the ratio went down to 50/80. Then 40/80. These days you can pretty much buy a decent two-year-old car (think discontinued Ford, Mercury & Buick models) for about 35 percent of it’s new car price without dickering too hard. So, is that the sweet spot in today’s market? Nope. At least not for the non-enthusiast. The biggest bang for your buck lingers a little further down the curve. Specifically the five to six-year-old commuter vehicle with about 75k miles that has become as popular as an old can of buckwheat. Think Ford Taurus, Buick Regal/Century/LeSabre, Mercury Sable and virtually anything with the name Oldsmobile on it. Sure these are the equivalent of leisure suits for the self-effacing car snob. But I’d be damned if they aren’t the best deals for those who, in Rhett Butler-speak, “Frankly, don’t give a damn.”

Manheim Auctions currently estimates the retail value of a 2002 Ford Taurus SE with 75k miles right at $3100. I would say it’s closer to $3500. But even so, your mom or music teacher would still have a vehicle that can go another 10 years and 120k… so long as it’s well maintained and conservatively driven. A ‘mom & pop’ car if you will. Depreciation works out to about $20 a month. Ironically, the same exact price I pay to have my garbage hauled.

Insurance for these cars is also dirt cheap, since the only way these types of cars will be ‘Gone in 30 seconds’ is if Mayor Bloomberg or Rick Wagoner become president in 2012. Maintenance and parts are also very reasonable; their makers cranked-out a billion engines and transmissions. Finally, your mom or music teacher should be able to invest the $5000 to $7000 saved in something that will deliver a reasonable return over ten years. Perhaps a pawn shop specifically for musicians, or dual citizenship in a country that doesn’t debt itself to death. I’m thinking Costa Rica.

Steven Lang

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KalapanaBlack on Dec 27, 2008
jckirlan11 : December 26th, 2008 at 10:03 am Works for nice rides as well. Check out the value on 2008 Pontiac G8 GT. 40% off MSRP. What’s up with that. Getting near the sweet spot. 2006-2007 Acura RLs. Getting near $20,000 at auction as well with under 30,000 miles on the clock. I am betting they will be going lower in the new year. Now if I could only get a full boat loaded 2009 LTZ Suburban for $30,000. I love that thing. True luxury. There's a 2008 LTZ - gray, chrome 20s, navigation, according to the description - in the paper from a Chevrolet dealer (GM certified, no less) with "less than 10K" for $24,800. Nobody wants those things. They're already dirt cheap. Also, new 2009 Impalas in LS trim are going for $18k new around here. They are for sale for exactly $100 more than a base Malibu LS four-cylinder by the same dealer in the same newspaper ad. One year old LTZs with 10k are $19k, and there’s a GM Certified 2008 SS with 5k on it for $22 grand.

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KalapanaBlack on Dec 27, 2008
rottenbob : December 26th, 2008 at 12:19 pm > You could buy a two-year-old used car with 80 percent > of it’s life left for 60 percent of the new car price. How are you defining it’s “life”? 150,000 miles? I don’t know what market you’re shopping in, but here in Seattle used cars seem like a ripoff compared to brand new. I regularly see cars with only 50% of their life left with an asking price of about 80% of the original price. As for the example of a 2002 Ford Taurus SE with 75,000 miles at $3,100… I just took a quick look on Craig’s list and found one with 135,000 miles at $4,999 and another with 93,000 for $6,888. Those aren’t bargains in my book. You've gotta look, and be lucky. Most of the good deals are gone when I call. I spent 2 years shopping for a "new" used car (in college). Looked at a million Intrigues, Regals, Diamantes, Galants, Tauruses, and anything else I liked at below $5,000. 90% of used cars are misrepresented, whether it's the dealer that tried to tell me the coolant leak on the '00 Regal GS was normal, or the DC-area '99 Diamante seller who said the nonworking fuel gauge, tachometer, and odometer and all-too-working (i.e. always lit) check engine, "TCL OFF," and "SRS" lights were "just a cheap sensor." Still, there are good deals, in many different places. I passed on an absolutely showroom '02 Intrigue with 80,000 mi for $4900 (this was nearly two years ago) because it didn't have a sunroof. It had the bulletproof 4T65e four-speed auto and the fantastic Northstar-derived 3.5L DOHC V6. Chrome wheels (a problem at this age, unfortunately), auto climate, Bose stereo, leather, heated seats. Everything worked perfectly, and there wasn't a door ding or scratch on the silver body. It was literally pristine. I ended up getting a 2002 Diamante LS at a dealer auction. It had 117k mi (at 137k now, with nothing done other than brakes , tires, and oil changes), a burnt out fog light, and a few rock chips in the pearl white paint, but the interior was and is in great condition, and it's absolutely loaded (Infinity stereo, 6-CD changer, heated leather, moonroof, auto climate, stability control). The cars are known for failed heater cores, requiring hours of labor (dash removal) and a bill upwards of $1500. This had just had it done less than 1000 mi before it hit the auction by the previous owner, presumably to boost his trade-in price on a new Mustang GT (as if). Price he paid for the repair: $1760 and change. I bid on the car, and it passed through without any other bidders. The Ford dealer selling it wanted more than my $3500 bid. It passed through again, and I bid the same. This time, they bit. Out the door, taxes and all, $3750 give or take. Book was between $6000 on the realistic end and $12,000 on the ridiculous, Edmunds.com end.

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