7 Considerations for Buying A Cheap Car Comments63 Comments

When I bought my last car I was naive enough to think that money just wasn’t a concern. Yeah in hindsight that was pretty foolish even if my online business was doing very well.

Instead I should’ve been smart with my finances and been content buying a cheap car. Really if I had taken some precautions I could’ve found an inexpensive car that suited my needs.

I guess part of me was scared off by some bad experiences my friend had with buying a used car in the past. After those experiences I actually learned a lot about what to watch out for.

1. Be Very Wary Of Any Car Under $1000

Unless a relative or trustworthy friend is hooking you up as a favor, be extremely skeptical about any car that is under $1000 or just seems like too good a deal. If it is too cheap, there is a decent chance that they are trying to pawn off an unreliable car, often with a defect not immediately noticeable.

In a crunch you might still find a reliable car for under $1000, but expect it to have some major cosmetic damage or rust. Even then, there will likely be high mileage on the engine, which usually means various parts may need replacement soon.

2. Always Get The Car Checked Out By A Mechanic

This is a mistake my friend made when trying to buy a car for cheap. They didn’t take the time to take the car to a mechanic before making the purchase. A $50 mechanic checkup may seem costly in relation to the price of the vehicle, but it is worthwhile to reveal any potential problems. It is much better that you notice major problems beforehand instead of afterwards when you’re stuck with the car.

Just mentioning that you want to take the car to a mechanic first may lead a dishonest salesman to admit to some problems. Take that as a big warning sign though. If they are trying to hide anything from you, who knows what else they are trying to hide. You don’t want to be dealing with a salesman who has proven to be dishonest.

3. Bring A Knowledgeable Friend or Relative

By asking a mechanically inclined friend to tag along, you might be able to save money on a mechanical inspection when there are obvious problems. They will know which parts are most crucial to check, what kind of questions to ask and what to listen for when testing the engine.

If it’s obvious that you don’t know much about cars, you’ll just look like an easier target. The salesman will probably put on extra pressure and come up with various excuses about why possible problems should be overlooked. I’d still also take the car to a mechanic to be safe.

4. Check The Car’s Accident Report

Before buying a used car, you’ll want to check the accident history. This will reveal some areas to pay more attention to. Sometimes the damage repaired in the cheapest way possible in an attempt to maximize profits on a resale. This is especially true if a car is written off by an insurance company and hasn’t been driven since.

You don’t want to be taking the chance of shoddy repairs that may have left the car unsafe or less structurally sound. It could lead to extra maintenance costs or higher potential for injuries if you get an accident. In a pinch cash advances can help with those kinds of expenses, but you’d be better off just avoiding any car that might be a money pit.

5. High Mileage Can Be A Red Flag

The more mileage that is put on an engine, the more its components wear out. As the mileage climbs higher it is often more major components that need replacement. This required maintenance could become quite expensive and could end up being very inconvenient.

When the mileage is high the salesman will probably list what kind of maintenance has been done already. As impressive as the list may sound, you need to be aware of what else will be coming up soon. A car owner’s manual will list the specific mileage points when different maintenance should be completed.

6. Focus Your Search On Reliable Models

Certain car models tend to be significantly more reliable and usually make for a better used purchase. Toyota and Honda are too car makes that have a strong reputation in this area. It can help to narrow your search down to specific makes and models which have a strong history of reliability.

Just don’t assume that every car that model is a good choice. If improperly maintained or abused when driven, parts may be worn much more than they should be at that point. So don’t forget the other considerations simply because it is a normally reliable model.

7. Consider Getting Financing If Low On Funds

Depending on your credit level and available funds, you might want to try and use online loans to get financing. Using an online based lender can help you avoid buying at the lowest possible level where risks are more prevalent.

Getting financing through a used car dealership may be another option to consider, but with any kind of financing be very careful about what kind of terms you agree to. Don’t just automatically accept the maximum financing you are approved. If possible you want to avoid getting into much debt with your car purchase.

Summary

The thought of buying some freedom with a cheap car can be quite tempting. Don’t let that emotion cloud your judgement and result in buying a vehicle that costs too much to keep on the road.

Do you have any other tips for buying a cheap car?

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This entry was posted in Financial Advice, and tagged Comments63 Comments
By : Jeremy Biberdorf | 18 Sep 2012
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63 thoughts on “7 Considerations for Buying A Cheap Car

  1. John S @ Frugal Rules

    Great point on getting a mechanic to look at the car first. Sure, the cost to do so might be high in relation to the car…BUT I’d rather spend $50-60 and not buy a car that I found out to be a lemon.
    One thing I use to save money is a service offered through Consumer Reports. They offer it on all new cars and also some used cars (not certain on how many they do it for used cars) I think they charge around $15 for it, but it tells you what exactly the market price is for the car and things to look for on the used cars. It also gives you some negotiating tips based off of the car you’re choosing. We bought our last car a couple of years ago and it made our negotiation last roughly 5 minutes and later the salesman told us we were able to get him to $1000 lower than what his boss had said was the least he’d accept for it.

    Reply
    1. Jeremy

      $15 to get $100 lower than the lowest price is a great investment. That’s something I’ll have to look into when it comes time to replace my car. It is a good idea to at least thoroughly check how much other people are charging for the car you are looking to buy. Kelly Blue Book can give you the estimated value.

      Reply
    1. Jeremy

      Being a mechanic would be one exception to the $1000 rule I mentioned. In his case he would know exactly what to look for and would be able to fix many problems that might arise.

      Reply
  2. Miss T @ Prairie Eco-Thrifter

    These are great tips and all very important. We always buy used cars and we follow a list very similar to this when we are out and looking. I have a good mechanic friend that often helps us with the decision making which is really helpful.

    I still think buying used is worth it though. You save so much on depreciation.

    Reply
    1. Jeremy

      Having a mechanic friend can be so valuable. A car salesman must cringe when they find out that your friend is a mechanic. Then he pretty much has to cut the bs and just try to work out a fair deal.

      Reply
  3. W at Off-Road Finance

    I find that the best results in used cars can generally be had in the $7-10K price range targeting a non-fuel operating cost of $1000-$2000 per year. In other words, I think it’s easier to buy a $7000 car and run it for 9 years with no more than $2000 in repairs than it is to find a $1000 car and run it for 9 years with no more than $8000 in repairs.

    Plus you have a somewhat less junky car.

    Reply
    1. Jeremy

      That’s probably the range I’d be hoping to go with for my next future car. It would be a big step down from my current car, but I’d be able to find something with much better value. Plus it would so much easier to save for.

      Reply
  4. Lance@MoneyLife&More

    Make sure you get a reliable model and research in advance what problems that model has at different points in its mileage history? Does something always break around 150,000 miles in this car? Is the one you’re buying at 135,000 miles? If so ask if the part has been fixed or replaced yet and if it hasn’t be sure to budget for it!

    Reply
    1. Jeremy

      This is why it’s good to get set on a specific model beforehand. Then you can become an expert about that model and get to know all of the different parts that should be replaced soon.

      Reply
  5. Jordann

    I bought my first car last year, it was used and initially I was terrified at the prospect. I was sure that I was going to get terribly ripped off. So I did what I always do, I internet researched the hell out of the topic. I ended up going with a used lease return, low mileage Volkswagen from the dealership. I was really pleased with the service and dealing with the dealership gave me a lot more peace of mind – even if I paid a bit more for the car.

    Reply
    1. Jeremy

      That’s basically what I did with my first car. I was too nervous about buying a used car from a private seller. So I too bought my car used from a dealership. In my case it was a trade in, but I knew the dealership was standing behind the quality and reliability of the car.

      Reply
  6. Veronica @ Pelican on Money

    My tip: If the vehicle smells like gasoline and the owner says “oh that’s because I’ve been carrying some gasoline in the trunk since I didn’t want to spend money filling up at the gas station due to the fact that I’m selling the vehicle,” RUN AWAY! Otherwise you’ll end up taking the car to a trustworthy mechanic who’ll tell you “you’re lucky to be alive, the gas tank was leaking and there are sparks not far from the leak.” – true story.

    Reply
      1. Jeremy

        Damn that is an unethical seller to be lying about something so crucial. If I come across anything like that which gives me doubts, I just go with my gut and move on. Like one car we looked at had condensation all over the inside of the car. The seller tried to make some excuse up, but guarantee the car had some kind of leak somewhere. With the amount of rain we get here, that’s something to completely avoid.

        Reply
  7. Jacob @ iheartbudgets

    Google is your best friend when researching a used car. I have a whole method of how to do this, but it would take to long to write it all down here.

    basically, you outlined the best ways to make sure you don’t get stuck with a junkie car. One I would add is to just look around next time you’re in a traffic jam. What cars that are 10 years or older are still on the road? If you buy a 5-7 year old car, you want one that will last at least another 5-7 years, so make sure to take note of the cars that are still driving on the road. I am a Honda/Toyota guy myself for this very reason.

    But great tips here. my biggest on is bringing a knowledgeable friend/mechanic to check it out before buying. You could save yourself many headaches and thousands of dollars in the long run!

    Reply
    1. Jeremy

      Good point about taking note of what cars you see around on the road. The less reliable cars will end up breaking down sooner and you’ll see a lot less of them around. Older Hondas and Toyotas are great though. Japanese cars in general seem to be made with a high level of quality.

      Reply
  8. Liquid

    Good points for anyone looking to buy now :). Vehicle sales in Canada are doing really well this year, maybe that’s why consumer debt is at records highs lol. I don’t like really cheap cars with high mileages either, also, low mileage can be a red flag as well and could mean the odometer was tampered with. I like to buy cars between 3 to 5 years old and drive them into the ground. Still on my first car.

    Reply
    1. Jeremy

      You’d have to be buying from someone pretty shady for them to have tampered with the odometer. I’m sure that’s something that could get them sued. A dealership might even be risking their business license. A 3-5 year old car would usually be a pretty good deal though. In some of those cases there would even be some manufacturer warranty left over.

      Reply
      1. Joe Morgan

        I agree that unusually low mileage is also a flag. It doesn’t mean the odometer has been tampered with (I agree that’s a big liability for a dealer). I had a Subaru outback in the 90’s, and the speedometer stopped working for a time. Unbeknownst to me at the time, the speedometer is what tells the odometer to increment.

        Basically, there were a few thousand miles (of few dozen)unaccounted for on the odometer by the time I had it fixed…

        Reply
  9. Justin @ The Family Finances

    These are all good tips. My parents never seem to have any money and are always stuck buying really cheap cars that end up requiring a ton of maintenance and repairs. I’ve been wanting to do an analysis and see if they’d be better off just buying a better vehicle in the first place.

    Reply
    1. Jeremy

      That sucks that your parents haven’t had good luck with used cars. If people are buying super cheap cars, they’re usually the last ones who can afford a bunch of expensive maintenance. They probably should be raising their price point or sticking to more reliable models.

      Reply
  10. Edward Antrobus

    I’ve actually only bought higher mileage cars. My wife’s Chrysler with 80k miles on it was the only time I’ve ever had a car with under 100k.
    I don’t consider a car to be high mileage until at least 150, more like 200i.e. My Camry was at 230k w.hen I wrecked . I was thinking that around 300000 miles out would start wearing out.

    Reply
    1. Jeremy

      Something like a Toyota might not be so bad with high mileage. Still, it is worth doing the research to see what kind of costs you might be incurring soon when that model of car is at that level of mileage.

      Reply
  11. bogofdebt

    Great points. We bought our car for $500 and while it could have been priced a little higher, it would still have been under $1000. Sadly this means we have to save up for another car as this one will die and won’t be worth the money to fix (eventually someday..hopefully not too soon though). We did have a mechanic friend give it a quick once over so we at least knew what we were (sort of) getting into.

    Reply
    1. Jeremy

      Sometimes a car under $1000 might be your only realistic option. Since your mechanic friend looked it over, at least you knew you weren’t getting stuck with a true lemon. Hopefully your car lasts a while longer giving yourself more time to save up.

      Reply
  12. Michelle

    Ugh! I so wanted to buy a cheaper car, but it’s just not feasible at this time. We have two cars, and our “family” car is paid off. The only car we could sell to buy a cheaper car is Jefferson’s commute-to-work car. Herein lies the problem; if we sold this car and bought a cheap car, we would only be able to save about 2k tops….and then we’d have a way less reliable car and it wouldn’t be worth it long term in order to be 2k less in the hole now. We are working on another option that will possibly save us a bit of money on our car….and we’ll write about it soon. :-)

    Reply
    1. Jeremy

      Yeah in that case I wouldn’t bother with a downgrade. I could save a decent chunk of money by downgrading, but I just can’t justify switching to a crappier car to save some money. I’d rather get some more value out of all the money I wasted on this car.

      Reply
  13. Kim@Eyesonthedollar

    We bought 99 Civic from a doctor I work with. He was the original owner and only drove it as a commuter car. If you are lucky enough to find an older car with one owner that you know was responsible and didn’t drive like a NASCAR driver, that is a bonus.

    Reply
    1. Jeremy

      Good point Kim. I have seen both sides of this. My friend’s latest car was driven by a single person and it is an awesome shape, but her car before that was likely a rental car. The extra wear on that car was considerable.

      Reply
  14. Jason @ WorkSaveLive

    Sticking with a reliable model and having the car checked out by a mechanic would be the big ones for me. We make sure to have every car we consider gets looked at by a mechanic….it’s helped save us a ton of money over the years.

    Reply
    1. Jeremy

      Good to hear you are so particular when car shopping. The trip to the mechanic may be inconvenient and a little costly, but at least you really get to know what kind of condition that car is in.

      Reply
  15. Todd - Fearless Men

    Point 6 is a good one-research reliable models.

    I think another idea is if you have a cheap car in mind, research that model, that year, and see what people are saying about it currently. Is everyone’s blowing up? Does it have a common problem all owners had to fix?

    If there was a common problem, ask the owner about it. If they don’t know what you’re talking about it’s probably one of two factors: a) they’re lying. b) they haven’t fixed it yet and you probably will have to soon.

    Reply
    1. Jeremy

      That extra research can go a long way. It might dissuade you from getting that model at all if too many people are having major problems. Or it will at least teach you what kind of problems to ask about.

      Reply
  16. Canadianbudgetbinder

    I bought a truck when I moved here and paid $15k cash for it and negotiated that way. I had no idea about protocol in Canada but for the most part I stuck to the basics. I didn’t however think about saying I was going to send it to a mechanic. I’ve had nothing go wrong with the truck so far so I’m happy about that. It was a nightmare looking for a vehicle and I don’t look forward to it again. At least with a new vehicle you go straight to the source. Cheers Mr.CBB

    Reply
    1. Jeremy

      I’m glad that nothing went wrong with your truck so far. At that price point it is unlikely that the vehicle has any major problems, but you never know. Some people want to pawn off a problem and also make a decent profit.

      Reply
  17. MoneySavingMouse

    Being a low-income, single Mom I have only ever purchased used vehicles.
    If you are buying privately I would suggest asking to see maintenance records for the vehicle to ensure that it was taken care of over the years.
    Right now I’m driving a 1998 Ford Explorer (14 years old) with just under 235,000 km and the only money (aside from regular maintenance) that I have put into it over the last two years that I have owned it has been for front and rear shocks :)

    Reply
    1. Jeremy

      Asking to see maintenance papers is a good idea too. Not every car owner will have that kind of documentation, but when they do it can provide valuable insight into how the car was cared for.

      Reply
    1. Jeremy

      Well I think I’m out of luck there since I don’t intend to marry a female mechanic. My dad could probably fix basic problems, but I’m not sure if I’d want to rely on him to check over a car before I bought it.

      Reply
  18. Mrs. Pop @ Planting Our Pennies

    Totally agree with the “get it checked by a mechanic”. Last time we were car shopping, we had appointments to look at two cars that were basically exactly the same – same model, year, mileage, everything except color. Price difference $3K.

    We saw the cheaper one first. They wouldn’t let us take it to the dealer for an inspection. We walked away.
    The more expensive one met the cheaper price, and let us drive it home (~100 miles) to get it checked out at our local dealer before deciding on it. We took it home Sunday afternoon, got it checked out Monday, and drove back the following Saturday to sign the paperwork and make the purchase official. At the cheaper (well under KBB) price =)

    Reply
    1. Jeremy

      What a red flag…not letting you take the car to the dealer for an inspection. I wonder what kind of excuse they gave to say no to that request. Obviously they had something to hide. That’s why it’s good to line up viewings of several cars rather than getting your hopes up too much about a particular car.

      Reply
  19. MoneySmartGuides

    Back in the day when I was looking for a cheap car, I checked out a local dealer that sold cars with a salvage title. A salvage title is a title for a car that was “totaled” in an accident. The dealer specialized in Honda’s and I knew that these were reliable cars. The major issue with a salvage title is the frame. Make sure the frame is straight. If not, you will have lots of issues. Of course, have someone else look it over too.

    You can find great cars for much cheaper simply because they have this title. And as anyone who has had their car totaled by their insurance company knows that the car doesn’t have to be completely destroyed to deem it totaled.

    Reply
    1. Jeremy

      Just be sure you are buying the salvaged title car from a reputable seller. I’ve seen such a car get frankenstein-like fixes where random pieces of metal were welded here and there. It was apparent that they were just trying to hide damage in the cheapest possible way.

      Reply
  20. My Own Advisor

    Know a great mechanic who can check things over for you, very important!

    Also, try to buy a car with only 1 previous owner. That way, you can get a better history. Ask for service reciepts as well, if you can get them, to know what work has been done or not.

    Reply
    1. Jeremy

      You’re right that multiple owners increases the odds of someone having abused the car while they owned it. If there was just one owner, it is much easier to judge how the vehicle was likely cared for.

      Reply
  21. Jason Clayton | frugal habits

    Nice list Jeremy. It is hard to go wrong with what you put together.

    I think the 2 biggest things I do when buying a used car (haven’t bought a new car in forever) is buy a reliable model (Honda/Toyota anyone?) and have a mechanic check it out. This is half the battle.

    Reply
    1. Jeremy

      Yes by just focusing on those 2 points, you can do pretty well in your car search. The other tips mostly just make the process a little smoother. Ideally you know some things to avoid before bringing the car into a mechanic.

      Reply
  22. DebtsnTaxes

    The best car I’ve ever bought was one that I purchased for $400. It was a classic 1987 4dr Chevy Cavelier that had 115k miles on it. Sure the doors had holes in them but that was just cheap air conditioning. I drove that thing for 2 years and had less than $100 in repairs (water pump and starter). I agree with ya though, most of the time I’d be weary of buying a vehicle so cheap, but with this one I got it from an Uncle who was a mechanic. Pretty good deal imo.

    Reply
    1. Jeremy

      That does sound like a sweet deal, especially with the air conditioning lol. It’s not surprising that you got it from a mechanic uncle. That’s about the only way you’ll get a car to last for 2 years for so cheap.

      Reply
  23. Harry @ PF Pro

    I would definitely bring a knowledgeable friend, a second pair of eyes in general is a good thing to have. I like the tip about taking it to a mechanic before buying. Once you buy the car you’re kind of stuck with it, so it’s good to know up front what’s wrong with it and like you said it may lead them to disclose some of the issues.

    Reply
    1. Jeremy

      A second pair of eyes is valuable for all kinds of purchases. Sometimes we let our emotion take over and we don’t do our due diligence with checking everything over. A mechanic of course is even better since they’d really know what to check.

      Reply
  24. Insurance Hunter

    Buying a used car is a great option for people. However, in an attempt to save a few bucks, some people end up spending way more then they anticipated because they failed to take the time to properly check out the vehicle before they purchased it. So, when buying a used car, always error on caution to make sure you are making a safe and sound investment.

    Reply
    1. Jeremy

      That is probably a pretty common problem, especially when someone is buying their first used car. They see what looks like a really good deal and assume that the seller is going to be completely honest with them. It’s only later that you find out about all the problems that will cost you more money.

      Reply
  25. Kyoko Nitori @ used cars

    The hardest part of finding used cars is finding the right company or person to deal with. And I think that’s the challenge for the possible customer.

    Reply
    1. Jeremy

      That is true. Far too many sellers are looking to take advantage of people by selling cars that are in need of a lot of repairs.

      Reply
  26. Monster Payday

    I know its hard for the “normal” person like me to look at a car, know the faults it may have or know what to look for. Recently i bought a second hand (4 year old) astra. Due to being stung before i did not want the same thing to happen again. My local breakdown service (who are nearly worldwide i think) offered a very cheap service and went to inspect the car for a small fee. Certinly the way forward for me now!

    Reply
    1. Jeremy

      That’s really the best route. It might increase the overall price a bit, but it gives peace of mind and can save you from getting a horrible car. It’s better to find out before the purchase than later when it breaks down on the side of the road.

      Reply

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