– By GREGORY KARP

Chicago Tribune

CHICAGO – “This is not your father’s Oldsmobile,” one domestic carmaker once told consumers in advertisements.

Well today, this not your father’s car-buying market. Some conventional wisdom, traditional financial advice and automotive truisms are out the window in what has become one of the wackiest car-buying markets in a generation.

Some lightly used cars cost almost as much as new cars; some models from Japan are scarce after production was disrupted by the earthquake and tsunami there; and leases, which virtually went extinct a few years ago, are back with a vengeance.

“Right now we have such a unique set of converging events, pressures and dynamics occurring,” said Rick Wainschel, vice president of automotive insights for AutoTrader.com, an online marketplace for new and used vehicles.

Here is some advice that doesn’t necessarily hold true in today’s market.

BUY LATE-MODEL USED CARS

You can still save a little money buying a 1- or 2-year old model, if you can find one. But used cars are so hot right now, especially fuel-efficient ones, that you’re unlikely to save nearly as much money as you used to.

“One of the biggest differences in the market today is the values of late-model used vehicles are really at all-time highs,” said Alec Gutierrez, manager of vehicle valuation for Kelley Blue Book.

For example, a year-old Ford Focus in 2010 sold for $9,625. Now, a year-old Focus would sell for $12,825, up 33 percent, according to Kelley Blue Book. Similarly, the Hyundai Elantra is up 36 percent. Most dramatic: a year-old Toyota Prius sold last year for $15,650. Today, a year-old Prius is valued at $21,850, up $6,200, or 40 percent.

The Manheim Used Vehicle Value Index, a monthly barometer of used-car prices, was near a record high in June, bested only by May.

“The level and steepness of the run-up has been unprecedented,” said Tom Webb, chief economist at Manheim Consulting. Used compact cars, in particular, are selling for about 20 percent more than last year, according to Manheim.

“In a lot of cases, 1- to 2-year-old cars have been approaching new-vehicle pricing,” Gutierrez said. “That is something we’re not used to seeing in the new-car marketplace. Usually, we would advise consumers to buy a 1- to 3-year-old vehicle. That, quite frankly, is just not the case anymore.”

Used cars cost more because they’re in short supply. Consumers are holding onto vehicles longer, sluggish new-car sales in recent years led to fewer used cars now, and fewer vehicles are coming off consumer leases and from rental fleets, Webb said. Even vehicle repossessions are down, as banks clamped down on auto lending standards, essentially making sure that consumers didn’t borrow too much money. That has kept the repo man at bay and used cars out of the market.

DON’T TRADE IN YOUR CAR

Conventional wisdom says you’ll get far more for your vehicle if you sell it yourself, rather than accept a dealer’s trade-in offer. But today, with used cars in demand, dealers are offering top dollar for trade-ins, especially for desirable models in great condition with low miles. That tightens the dollar gap between trading in a vehicle and selling it yourself, which involves far more hassle.

Higher prices affect used-car dealers too. They must pay higher wholesale prices at car auctions. So they’re likely to be a lot more interested in your trade-in.

“Dealers are willing to pay more for a trade-in they can see and value, rather than taking their chances at the auction,” said Larry Gamache, spokesman for vehicle history information service Carfax. “Dealers are 100 percent more willing to appraise trade-ins more generously.”

Gamache said he recently traded in a 2004 Jeep Wrangler. The trade-in value was about $1,000 less than what he might have gotten as a private-party sale. While the difference is not chump change, it just wasn’t a big enough difference to be worth the hassle of selling the vehicle himself, he said.

“If you have a clean car right now with the right miles for the age of the car, there’s no telling what it could be worth,” said Bob Wasik, general manager at Oak Lawn (Ill.) Toyota, who has been dealing with low inventory for both new and used cars. That’s especially true for hot models, such as the Prius hybrid, he said. Dealers are able to sell a used Prius for nearly the price of a new one because supply is so limited.

DON’T LEASE

Leasing vehicles has been slammed by personal finance experts as a wildly expensive way to own transportation. But lease deals today, after nearly disappearing during the Great Recession, generally have improved and are worth a look, especially for people who like to get a new vehicle every few years, car experts said.

“There are some pretty amazing lease deals,” said Phil Reed, senior consumer advice editor for vehicle website Edmunds.com. Consumers nowadays will see more short-term leases available, such as 24 months. And leases, once largely the domain of upscale and luxury brands, are now available on less expensive compact cars.

The relative shortage of Japanese makes also has affected leasing. Instead of paying top dollar for a Honda or Toyota, or settling for a car that isn’t exactly what they want, consumers are taking over other people’s leases as an interim move, said John Sternal, spokesman for LeaseTrader.com.

“We’re seeing a lot more people looking for 12-month-or-less lease deals,” he said. “The big reason is they’re saying to themselves, ‘Why would I want to buy Toyota or Honda when there’s not much inventory, and prices are high right now? I’ll basically rent a car for a year and get back in the market in 2012 when inventory levels are more normal.’ “

BUY JAPANESE FOR QUALITY

For conservative buyers looking for reliability, buying Honda, Toyota or maybe Nissan once was easily the best bet. No more. Korean-made cars, such as Hyundai and Kia, have rocketed in quality in recent years, while domestic makes, such as Ford and General Motors, have improved significantly, Gutierrez said.

“We’ve seen a leveling of the playing field,” he said. “This is certainly something we’re not used to seeing. It’s been a bit of a shake-up this year.”

Couple that with the relative scarcity of Japanese models, and traditional Honda and Toyota buyers might do well to consider other brands.

“Toyota and Honda for years were top of the heap,” Reed said. “Now, Hyundai has stolen a lot of the limelight.” In fact, so many car brands are reliable that consumers are turning to other differentiating factors, such as styling and safety equipment, Reed said.

On AutoTrader.com, site visitors looking for a midsize sedan are considering many options, Wainschel said.

“Before, there was a sizable gap between (Honda) Accord, (Toyota) Camry and everything else,” he said. “Now, Accord, Camry, (Hyundai) Sonata, (Ford) Fusion and (Nissan) Altima have really converged.”

DON’T PAY STICKER PRICE

Of course, you should always haggle for the best deal you can get on a new car. But nowadays, it’s not realistic to expect huge price breaks off the manufacturer’s suggested retail price. While there’s a shortage of used cars, there’s no abundance of new cars, either. So, manufacturers aren’t offering the lucrative incentives they have in other years.

“There’s still room for negotiation,” Wainschel said. “What you don’t see are the really very aggressive incentive programs.”

That all means the consumer has less bargaining power than in the recent past.

“In some cases you have to pay sticker price. It depends on the car,” Reed said.

TURN IN THE KEYS ON A LEASE

Don’t turn in your leased vehicle until you find the buyout price in your lease contract. Because used-car prices are so high, you might be able to buy your leased car and resell it for a profit. You’ll have to decide whether that’s worth the hassle, and in some states, including Illinois, your profit will be eroded by paying sales tax.

“Those folks lucky enough to lease two to four years ago are finding themselves in a good spot,” Gutierrez said.

BUY A $5,000 CAR

AS A YOUTH’S FIRST VEHICLE

That’s a fine idea. But you might not be able to find one.

“The death of the (quality) $5,000 car is one way to put it,” Gutierrez said. “It’s very, very difficult to find a $5,000 vehicle and not have it be eight to 10 years old with 150,000 miles on it. … For cheap transportation, prices are just up across the board.”

BUY CURRENT MODELS

AFTER LABOR DAY

Most new-vehicle models used to be introduced in late summer, meaning dealers were motivated to get rid of their supplies of current-year models. That’s less true today, as new models are introduced nearly year-round.

“There’s a decent amount of 2012 vehicles on the market already,” Wainschel said.

And inventories are generally lower, so dealers aren’t desperate to clear their lots of older cars.

“It’s going to be a very unusual fall,” Reed said. “There likely will not be the feeding frenzy that it often is when the new models come in.

“The car-buying world has really been reshaped lately.”