Decision time: New vs. used cars

Used cars are still a better buy over new, but with all the incentives on the table, the value gap is closing.

Used cars are a smart buy because of depreciation, which is greatest in the first year or two, which means someone else gets stuck with the biggest value-drop. And you aren't giving up very much in return - these days, cars last a lot longer, so a car with 20,000 or 30,000 miles can still have plenty of life.

But weak sales have led to heavy incentives on new cars. While a used car is still cheaper than a new one, in some cases the price difference will be surprisingly small, according to researchers at the automotive Web site Edmunds.com.

"Certified pre-owned" cars are another option. CPOs are selected low-mileage used cars that have been inspected, refurbished as needed and certified as being in top-notch condition, according to criteria laid out by the car's original manufacturer. Most importantly, they have added warranty coverage. CPOs cost more than non-certified used cars, but the quality can make the extra cost more than worth it.

"If you really want to make the most educated decision, you need to look at all three alternatives," said Jesse Toprak, an analyst with Edmunds.com.

Here are some examples of new, used and certified pre-owned costs for various cars. With new car sales so slow, there are still some 2008 model year cars left on dealer lots, so we've included prices for those as well. All prices reflect Edmunds.com's estimated real customer costs, not manufacturer's suggested retail prices.