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Used cars are looking better and better

With every passing year, buying a used car becomes less of a gamble, according to a new analysis by Consumer Reports.

Even the least reliable carmakers are gaining ground on the perennial reliability leaders Toyota and Honda. Volvo has made the most dramatic improvement over the last decade, but almost all automakers have improved their products in recent years.

CR recently compared the percentage of problem-free, 3-year-old models from its 2002 and 2011 Annual Auto surveys for 13 automakers based on their product output for which owners did not report any serious problems with their cars during the 12 months covered by each survey.

The analysis of 2011 survey data revealed an overall improvement in used-car reliability from almost all automakers, with Volvo, Mercedes-Benz, Volkswagen, Hyundai, Ford, General Motors and Chrysler showing the most notable gains (a minimum of 10 percentage points) compared to CR's 2002 results.

BMW landed at the bottom of the 2011 list with only about 70 percent of its used cars being trouble-free, which is better than the 2002 survey average of 68 percent.

CR chose 3-year-old vehicles, most of which are coming off warranty -- when owners begin to assume the cost of ongoing repairs. By age 3, most models also have the steepest part of depreciation behind them, so used-car buyers will find it a good age on which to focus.

In its analysis of used cars, CR also tracked extremes from 2007 models -- five models that started out with few problems and stayed reliable as they turned 5 years old and five models that started out with a few more problems and got much worse over time.

The 2007 Toyota Prius averaged six problems per 100 cars in its first year and 26 at age 5; the Mini Cooper S hatchback averaged nine per 100 cars in the first year and 113 by age 5.

When buying a used car, choose a model from the most reliable brands and one that will age gracefully over time. However, any vehicle can become a clunker if it has been neglected or has sustained damage from an accident or flood.

CR advises the following to help used-car buyers from landing a lemon:

*Check for signs of collision repair. Some include mismatched body panels or doors, hoods, or trunks that don't close properly. Bring a magnet to test for the presence of body filler; if it doesn't stick well to a steel panel, there may be filler under the paint, which can indicate a repair.

*Beware of flood damage. A moldy or mildewy smell, discolored carpeting or intermittent electrical problems may be signs.

*Check the fluids. Wet spots in the engine compartment or under the vehicle can indicate leaking oils or fluids. Check the oil and transmission fluids for proper texture and color.

*Read the smoke signals. Blue smoke from the tailpipe indicates that the engine may be burning oil. Billowing white smoke indicates water in the combustion chamber, usually because of a blown head gasket, damaged cylinder head or even a cracked block -- all expensive repairs.

*Step on the gas. Knocks and pings while accelerating can reflect an overheating engine. If the engine revs excessively before the car accelerates, it may indicate a misadjusted or worn-out clutch or damaged automatic transmission.

*Check the vehicle's history. A vehicle history report from CarFax (www.carfax.com) or Experian Automotive (www.autocheck.com) can alert a buyer to possible odometer fraud or reveal past fire, flood and accident damage. Unfortunately, these services don't catch everything, so it's no guarantee that a car is problem-free.

*Get it inspected. Have any car thoroughly inspected by a qualified mechanic. Check for any recalls related to the car, and verify whether the work was done.