Can a used car sell for as much as it cost brand-new? Could a two-year-old model warrant a price that's only a little lower than the one that was specified on its original window sticker?

Although it doesn't make sense, according to the used-car price guides and dealers who specialize in secondhand models, this turnabout of basic economics does happen. Now and then, for example, an especially hot new sports car or even a high-demand SUV could actually cost more secondhand than it did at the new-car dealership.

Supply and demand dictates the prices of all products, including used cars. When a large number of shoppers crave a particular model, its price stays high. If it's in seriously short supply, the price is likely to be higher yet. Those who absolutely must have a certain highly-coveted model, and don't want to wait for it, may be willing to pay shockingly high prices for a slightly used example.

Conversely, sensible shoppers who pay strict attention to the numbers can save plenty of money on a secondhand purchase. What you need to search for is a car that does not hold its value as well as some of its competitors, and is therefore priced lower.

At the same time, you don't want a car or truck that's been depreciating rapidly because of quality problems or other tangible negative issues. The best value is a car that's nearly as good as its rivals, but simply hasn't proven quite as popular - and therefore, has not held its value all that well.

In the used-car business, several "value" figures are tossed around loosely. "Resale value" is simply the price that a customer will actually pay for a given used vehicle. "Residual value" is an estimated price, calculated when the car is new, to predict what it will be worth when it's two, three or four years old. "Retail value" is what a used-car buyer might expect to pay at a dealership, while "Wholesale value" is what a dealer might pay for that same car at an auction.

Jie Cheng, vice-president of solution development for Power Information Network, emphasizes "retained value." Speaking at a conference in Dearborn, Michigan, hosted by Auto Remarketing magazine, Cheng outlined four factors that affect retained value:
+ Economic
+ Product
+ Marketing
+ Remarketing

As a shopper, you're most interested in the end result. You want to ask which vehicles lose their value more rapidly than others as they age, and also whether there's a valid reason for such rapid depreciation.

Durability is one of the foremost factors that affect retained value. If shoppers think a certain model is likely to be long-lasting and trouble-free, they're willing to pay more. Like other analysts, though, Cheng warns of the risk of relying on "perceived durability" rather than actual long-term quality. Some brands and models develop a reputation for flawed quality that's not entirely valid, while others aren't quite as trouble-free as perceptions suggest.

Perceived durability typically translates to higher retained value, but "what's perceived becomes stronger than reality," Cheng said. People tend to think certain makes have better durability records than owner surveys actually reveal. That list includes Volvo, Mercedes-Benz, Volkswagen, Land Rover, Kia, and BMW. At the same time, shoppers tend to believe that such makes as Buick, Oldsmobile (now extinct), Pontiac, Jaguar, Dodge, Mercury and Saab have weak durability records, even though surveys suggest otherwise.

Your local library probably contains several publications that can help with "by the numbers" value research. The Residual Percentage Guide issued by Automotive Lease Guide contains percentage values for each car model, predicting its worth at various ages. A two-year-old, for instance, could be worth as much as 70 percent of its original selling price, or less than 35 percent. Concentrate on the appealing models that fall toward the lower-percentage end of the scale.

You can also consult one of the used-car price guides: Kelley Blue Book, the retail edition of the Black Book, or the Official Used Car Guide issued by the National Automobile Dealers Association (NADA). Compare the estimated retail selling price of the car that interests you with its original Manufacturer's Suggested Retail Price.

No need to turn numerical research into a harrowing ordeal, though. All you want to do is eliminate some models that might be tempting, but are likely to cost too much for what you get because they depreciate too slowly. But beware: some of those rapidly-depreciating models have low retained value because they weren't such good cars in the first place.

Note: A version of this article first appeared in the Northwest Herald newspaper.