(MONEY Magazine) – Just as times change, so do cliches, and the answer to the old question, "Would you buy a used car from this man?" is fast becoming, "Sure, why not?" A huge number of attractive two- and three-year-old vehicles roll off leases in good to excellent condition each year--and Americans, wisely, are snapping them up. Franchised new-car dealers are on pace to sell nearly 21 million used vehicles this year, the most ever, according to the National Automobile Dealers Association (NADA), driven by the boom in off-lease sales. "You can't even call it a glut," says Art Spinella, an analyst at CNW Marketing/Research. "A glut implies there's a problem selling something, but every single off-lease car is being sold."

Which is not to say that demand is likely to outpace supply anytime soon. On the contrary, years of stagnant and even falling car prices, a looming recession and the economic impact of September's terrorist attacks have combined to push market forces dramatically in your favor. So if you've been yearning for a car with more luxury, size or performance, now is the perfect time to get it. There are many "lightly used" models out there, and prices are only going down in the near future.

Buyer's market. If you're feeling squeamish about bottom-feeding during a national crisis, keep two things in mind: One, the auto industry needs your business; and two, this buyer's market has actually been many years in the making. The entire car business is engaged in a six-year-old price war, which began in 1995 when Mercedes slashed prices on its ritziest cars to better compete with Lexus and Infiniti. Toyota responded by reducing the price not only of new Lexus models but also of Avalons, Camrys and Corollas, generating competition throughout the industry. As a result, new-car prices have all but stagnated in recent years--an almost unprecedented phenomenon. Meanwhile, the industry continued to gorge itself on leases, luring customers with extremely low monthly payments made possible by overestimating the cars' so-called residual value (how much they'd be worth after the leases were over).

New and used cars compete with each other, of course, and when relatively inexpensive new cars collide with a steady stream of high-quality used cars in the marketplace, the result is a cycle of falling prices. And that was the case even in the good years. Throw in the threatening recession and the economic kidney punch of September's terrorist attacks--when shoppers largely disappeared from auto showrooms--and you can fully understand why dealers have been going to extraordinary lengths to lure people back. The average interest rate on new-vehicle loans has plunged by nearly half since the terrorist attacks, which is sure to clip used-car prices even further. Already, you can buy a 1998 Lexus ES300 for less than the average base price of a new Camry SE ($21,140). And that's just the start, says J.D. Power's Chris Denovie: "Expect to see prices go down before the end of the year."

Thinking used. Buying almost any late-model used car in good condition is, to a certain extent, a smart move because autos lose a disproportionate percentage of their market value in their first couple of years on the road. Buy a high-quality two- or three-year-old car and you simply get a lot of driving at relatively little cost.

That said, the smartest used-car buyers use some additional strategy, seeking out models that are reliable but for certain reasons have lost an unusually large portion of their market value in their first years on the road. Typically, these will be vehicles that either have fallen out of fashion or are due for a redesign--or both, as is the case with sport utility vehicles based on truck designs. "Crossover," or car-based, SUVs such as the Acura MDX, the Buick Rendezvous and the Honda CR-V are gaining popularity; meanwhile, buyers are turning away from bigger models whose look has been around for a while, such as the Ford Explorer, which kept the same basic design from 1991 to 2001. As a result, trucklike SUVs are posting the largest price declines of all used vehicles, making them great deals. For instance, in 1998 a four-year-old 1994 Grand Cherokee Laredo was worth $16,150. Today, a 1997 Laredo is worth less ($15,900), even though it cost $2,000 more than the 1994 when both were new.

For other used models that currently represent particularly good values, see the box above.

Going shopping. You won't be surprised to hear that the Internet is an extremely powerful tool for used-car shoppers. The resources available are massive. We think the best place to start is Edmund's (www.edmunds.com), a time-tested outfit that updates its data monthly and offers safety ratings, performance reviews and both wholesale and retail prices for used cars. If, for example, you're interested in a 1998 Mustang Cobra convertible, a few clicks will show you that you can expect to pay a base retail price of about $20,500 at a dealership and that you can expect to receive $16,520 if you were trading it in at a dealership. The prices are based on typical mileage and "clean" condition, but the site also lets you factor in other options and conditions to get a "true market value" for the car you're investigating. For instance, if the Mustang is in excellent condition, is dark blue with leather seats and has racked up just 15,000 miles, its average dealer price will rise to $23,343 and its trade-in value to $19,135.

Once you have a baseline price, you can also find online ads for cars that are actually for sale. Edmunds' five major selling partners include Microsoft's CarPoint and Yahoo (www.autos.yahoo.com). While just a fraction of local dealers post ads on any one site, Internet listings usually include information you won't find in newspaper ads, such as engine specs and mileage. You can then use this data to compare specific cars you find online, to haggle with local dealers and to evaluate offers at superstores such as CarMax.

Certifiably not worth it. Edmunds will also tell you how much you can expect to pay if you want a "certified" vehicle--$24,088 for our Cobra convertible, for example. So-called certified used-car programs refurbish one- to four-year-old vehicles and load them up with goodies, sometimes including extended warranties, on their way back to market. Car makers have ramped up their certification programs lately: GM and Honda are both on their way to doubling their sales of certified used cars this year. It's easy to see the appeal: Certification eases our historical mistrust of used cars and used-car dealers.

The problem is the cost: Manufacturers are currently adding an average of 5.3% to the price of cars they certify, according to CNW. Most experts we spoke with agree that certification usually isn't worth that extra expense. All too often--especially when it comes to high-end cars--certification amounts to insurance against malfunctions that are unlikely to occur. As Spinella puts it, "If you're looking at a two-year-old Lexus, why bother paying an extra $1,500 because it's certified? The car is so good that $1,500 will probably more than cover anything that goes wrong." Much is made of the thorough mechanical inspections that go with certification--but reputable auto dealers give their off-lease cars head-to-toe check-ups, certification or no.

So it's okay to pay for an extended warranty on a car's engine or for refurbishing a luxury car, where even the tiniest dings can injure your car's resale value. Otherwise, certification is worth it only if a manufacturer's program provides especially good protection from a hazard that particularly worries you. For example, if you buy a certified Saturn, you can return it for any reason within three days and get your money back, or within 30 days for an exchange--a far more generous policy than the industry average. If you know you're prone to changing your mind about big-ticket purchases, that's a valuable benefit. You can find summaries of all 23 national certified used-car programs at the website of Intellichoice (www.intellichoice.com).

Don't, on the other hand, assume that all off-lease used cars are in good condition. Have an independent mechanic inspect your car before you commit; most will charge you less than $50. (If the dealer won't let it off the lot, it's worth paying a mechanic or an inspection service the extra $100 it will take to visit the dealership.) And run a check on the car at Carfax (www.carfax.com). For $20, you will find out how many owners the car has had, its odometer reading the last time it changed hands and whether it has been flooded, salvaged or totaled.

Leasing again. A recent trend in the industry is to lease cars a second time--that is, to lease used vehicles. We generally don't think it's a good idea for consumers; you're all too likely to pay for maintenance on a vehicle you don't own. But there are some exceptional circumstances: First, as with any auto lease agreement, you must be planning to keep the car for only two to three years, take good care of it and stay within the contracted mileage limits. Second, the vehicle should be one that loses a significant portion of its value before you get it and then retains its value exceptionally well while you're driving it--as do many minivans, for example.

In contrast to buying, when you lease a used car, certification is a good idea. The manufacturer will be on the hook to take care of your vehicle, and your monthly payments will still be lower than if you bought the car. "The point is to not have to deal with it when you're done," says Spinella. "Just drop it off and walk away."