Your Turn To Drive’s latest episode tackles a very important consumer and dealer question – at what age does a used car hit the sweet spot in terms of value?

It is no secret that a car loses a significant amount of value the second it is driven off the lot, so used car depreciation is an important issue to dealers and consumers alike. Edmunds put together an infographic with some interesting information.  Edmunds notes that buying a car in its second year and owning it for three years offers the most value.  With the increase in leases, that just isn’t a very functional suggestion as those lease returns are already in the 3rd and 4th year as the leases generally are for two or three years.

As far as the depreciation curve, Edmunds said:

Take an average midsize sedan selling for $27,660 as an example. In the first year, the car loses $7,419 of its value. However — and this is where the secret comes in — the next year only sees a $1,114 drop in value. In fact, in years two, three and four, it only loses $5,976. That's right — in those three years put together, it loses less than in that first year.

Your Turn To Drive gathered a panel that included Jim Dykstra of vinadvisor, Jaclyn Trop, contributor to the New York Times and Philip Reed of NerdWallet to further discuss this question.

Philip Reed  focused on depreciation saying:

Cars depreciate 45% in the first three years. But most of the depreciation is in the first year. Combine this with the fact that there is an upturn in leasing -- it's almost 1 in 4 new cars now -- and this means a flood of three-year old cars are coming back into the market. Buy one of these cars and you'll have a near new car with about 36,000 miles on it and will pay much less depreciation.

Jaclyn Trop continued:

If you're considering buying a used car, I think only two considerations matter. Are you buying, let's say, a three-year-old car because it's at the end of a lease, still in great condition and it's a lot less expensive than a new car? Or, are you buying someone's headache? The financial deal may sound enticing, but are underlying issues with the vehicle not readily apparent from a cursory look or if you're buying strictly on impulse? For either scenario, it's well-worth the additional cost to have the vehicle inspected by your current mechanic or an independent mechanic via a friend's recommendation. Acquire the vehicle's history in detail and research several well-established automotive sites and compare used car price listings.

Considering all of that information, it’s pretty easy to put together consumer focused checklist to get the most value out of this process:

1. Age – to most for least, buy a 2 ½ to 3 years old car and drive for 3 to 4 years.
2. Mileage – the cost of maintenance rises with miles, look at selling before 100k miles
3. Ownership – get a clear picture of who owned and drove your next car. 1 owner or rental matters, a lot!
4. Pedigree – if you’re buying the last of a particular model, think about who will be interested in buying it in a few years.

Most importantly, invest some time to get prepared. An impulse decision to try a new restaurant is not very risky, walking into a dealership or agreeing to buy a car off Craigslist could be an expensive impulse!