How To Save Money With a Late Model Used Vehicle

Can buying a late model used vehicle save you money?

For most people, transportation is one of their biggest expenses, so it’s worth thinking about how to get it under control.

One option is to buy a late mode used vehicle instead of buying a new car. Even with this option, buying a car will be stressful and expensive, but you can save money.


Every year you own a car, it loses resale value. This is called depreciation and it’s one of the biggest costs of owning a car. You pay top dollar and then resell the vehicle later for much less.

But depreciation isn’t linear. If a car drops $2,000 in value the first year you own it, it’s not going to drop $2,000 in every subsequent year. That would mean a $20,000 car would be worth $0 after 10 years. It would be worth negative $2,000 after 11 years.

Instead, the depreciation curve looks something like this:

Most of a car’s depreciation happens early on. The main idea of buying a late model used car is to get a car that is fairly new, but to avoid the steep decline at the beginning of the curve.

Real Life Examples

That’s great in theory, but what about in practice?

I looked up prices for a Honda Accord. I picked that car simply because it’s popular. According to the U.S. News Best Price Program, the average price for the cheapest trim of a new 2021 Accord is $26,360.

Of course, when they actually go to the dealership most people get upsold on various ad-ons that seem essential at the time. There are also lots of taxes and fees and you always pay more than you think. And of course, most people incur interest from financing their purchase.

But we’ll use $26,360 as our base for comparison.

Looking around for used cars, I found a 2019 Accord listed for $22,725. I found a 2018 model for $21,828.

Although it might not be considered “late model,” I found a 2015 Accord for $13,984.

Calculate the Cost Per Mile

When comparing newer cars to older cars, you have to factor in the mileage. Cars don’t last forever, and every mile that someone else drove the car brought it a little closer to its eventual demise.

It’s impossible to know how long a car will last, so I like to pick a benchmark such as 200,000 miles to measure the life of a car by. Is this number arbitrary? Sure, but it’s reasonable to expect a reliable model to last this long. I had a friend whose dad drove a Honda Accord with 300,000+ miles on it.

So to calculate the cost per (remaining) mile on the car, you subtract the car’s mileage from 200,000. This gives you an estimate for how many miles you can expect to get out of this vehicle. Then divide the price by the remaining miles to get the per-mile cost of the vehicle.

For instance, here are the calculations for the cars I researched in the last section:

YearPriceMileageRemaining MilesCost Per Mile

You’ll notice that the 2018 was actually more expensive per mile than the 2019. This is why you have to calculate the cost per mile. There’s variability in prices and buying an older car doesn’t always mean you’re getting a better deal.

In this instance, the 2015 model blows the competition out of the water in terms of cost. Of course, you have to remember that it starts with more miles and will likely need to be replaced a few years sooner than the other options. This may or may not be a big deal to you. All of these options should easily last you over a decade.

Shop Around

Like we just saw, buying a late model used vehicle is not enough to guarantee that you’re getting a good deal. Like anything else, it’s important to shop around.

Remember Your Options

When it comes to buying new cars, you basically have one option: Buy from a dealer. Yes, you have a choice of which dealer, but you are going to be buying from a dealer.

With a used car, you have more flexibility. If you want, you can go to the dealer and buy a certified pre-owned car. But you don’t have to. You could buy your car used from the owner. You could also find a smaller resale shop that specializes in buying and selling used cars.

The last car I bought was a Honda Odyssey minivan in anticipation of the birth of our third child. The 4-door compact sedan we had been driving just wasn’t going to cut it anymore.

After searching for a long time, I determined that the best deal available was at a place called Auto Boutique in Jacksonville, about an hour and a half away. I think we got such a great deal because there was some cosmetic damage that might turn people off. There’s a ding on the outside of one of the doors and a few inches of lining have peeled off one of the inside doors. But the car runs fine.

Pit the Dealers Against Each Other

If you do decide to buy from a dealer, make them compete for your business! Give them a call or email them and ask them to email you their best price. Let them know you are looking around. You might not get many of them to budge, but you only need one who is desperate to make a sale to get a good deal.

Wait For a Good Deal

Whenever you’re buying or selling, one of the best ways to win is to wait. Good deals always come along. There might not be a good deal right now, but there will be.

The longer you can wait, the better your odds of finding a rare deal.


Sometimes you get a lower price if you ask for one. It doesn’t always work, but it never works if you never ask.

It’s important to remember that whoever you’re talking to really wants to sell you a car. Their primary goal is not usually to sell the car for the sticker price, it’s to sell the car, period. If they can get you to pay more up front or pay more on the back end through financing, they’ll happily do it. But if you might walk away, they’ll usually be willing to come down.

Drive It For As Longs As Possible

Let’s run some simple numbers here.

We saw that a 2019 Accord was listed for $22,725. This means that if you drive it for five years, you end up paying an average of $4,545 per year. That’s without any interest.

So if you buy a car every five years, you keep incurring these costs. Of course, you can trade your car in, but chances are, the dealership won’t value it very highly. They want to resell it for a profit.

If you keep your car, you’ll face increased maintenance and repair costs, but if you drive your car for 10 years instead of five, do you really expect to pay $4,545 per year in repairs?

But again, let’s adjust for a possible trade in. Let’s say that five years ago you bought a late model certified used vehicle from a dealership for $22,725. That car is now seven or eight years old. How much of a trade in value are you going to get? Maybe $8,000?

If so, then for the next five years your costs are $22,725 to buy another late model used vehicle, minus $8,000 trade in. This works out to $14,725, or $2,945 for the next five years.

Again, do you expect to pay $2,945 per year in repairs for years six through 10 of owning your vehicle? Maybe you’ll get extremely unlucky and have one year when you pay $2,000 for car repairs, but that’s just one bad year and it’s still less than what you would pay to buy another car.

Final Thoughts

It’s definitely possible to save money buying a used car, and a late model used vehicle lets you buy a car that’s close to new with a long life expectancy at a meaningful discount.

It’s not the only factor that matters and by itself it isn’t guaranteed to save money. You still need to do the work of looking for a deal and making sure you get the best price.

And of course, the longer you drive your car, the more you save in the long run.

Getting a good deal on a car isn’t easy, but it sure beats buying something you can’t afford because its more convenient.

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