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Recently I dropped some coin on a sweet ride for my wife because her car was starting to feel a little cramped. Baby in the back, dog on the seat and some amazing frugal finds filling in the rest of the space means that if another little one were to come along, we’d have to tie the dog to the roof. So we started going about looking at a replacement vehicle to help accommodate the need for some more space. At first, we were sold on the practicality of a van, because we’d probably never outgrow it, it still has great storage, and there’s like 7,000 cup holders! But after some discussion, we decided that we could step up to a 5-passenger SUV for now, and only get a van if we ABSOLUTELY had to.

The Qualifications

Before we started reaching for the gobs and gobs of cash that we have piled up under the mattress, we had to narrow down what exactly we were looking for. First, we didn’t want to spend over $4,500, because that’s what we have saved, and frankly, spending much more than that on a used car is stupid. Second, we knew we wanted something reliable that would last for a LONG time. That basically brought us to Toyota or Honda (trust me on this one). That pretty much narrowed down the option to a 4runner, because it’s the most reliable 5-seater SUV out there, and we could find a good, used one for under $5k. Now it was time to find the best deal on the interwebz!

The Search

Any good used car buying experience starts with a thorough search of the local inventory of options. Now, this is common sense and all, but there are definitely some skills that come in handy when properly searching for a used vehicle. First, I recommend only buying through Craigslist in the “Cars & Trucks – By Owner” section. Why? Because then you deal with people, not a company. The sole existence of a company is to make a profit, so when you buy from a dealer, they will profit off you, no matter how much of a “deal” they are giving you (“I swear my boss’s own GRANDMA couldn’t even get a price this LOW!”). So I start by filtering them out.

Next, you need to put in a “Min” and “Max” price that you are looking for. The trick here is to put something like $150 in the “Min” section, because people like to do stupid crap like list their car at $1 or $2 just so you’ll click through. Filter all that noise out by upping the “Min” value to something that’s more legit. On the “Max” side, put in something about $500 – $1,000 more than the maximum you’re willing to spend. You WILL be negotiating, and filtering out options that are a few hundred above your max price could lose you a sweet deal! And, as a personal preference, I only shop cars that have some pictures attached, so check the box “Has Image” to filter out the riff raff.

So here’s what our search looked like for the 4runner:

The Selection

Now it was time to filter through the vehicles listed. When we were looking for the 4runner, I was looking for some specific criteria: 1) Leather seats, 2) Power EVERYTHING, 3) V6 and 4-wheel-drive, 4) Manual transmission. Outside of that, we could have some variations, but I wanted to find ALL of those things in the vehicle. I recommend defining the engine, transmission, powered windows/locks (or not), and any other amenity that you CANNOT LIVE WITHOUT before you start scrolling through the list of cars. That way you don’t waste your time clicking on EVERY. SINGLE. POST. not knowing what it really is you’re looking for.

So I started clicking on mid-90’s 4runner “Limited” models, because I knew they would have the V6 and 4WD, plus most likely power everything. I would click through, see what transmission it had, and go back if it wasn’t a 5-speed. If it was, I would then scour the pics/description for leather seats. Most of what I found had ripped up seats, or was in the $5,500 range if it looked any good. I finally came across a “Limited” model that had all the options that I wanted, plus a HUGE moon roof, towing hitch, and some other goodies. It was listed for only $3,500, which was well under my max price, and had under 200,000 miles (these truck can go 400k with regular maintenance). So I called and set up an appointment for the next day. Time to put my poker face on!

The Test Drive

Now, I am very fortunate to have a brother-in-law that loves cars, and knows a bit about Toyotas and Hondas. He agreed to come along and help me check out the truck. I suggest that for checking out any used vehicle in person, you bring along a buddy. They might be car savvy, or you might be, but I recommend that at least one of you is. My brother was able to really look at the motor/transmission/suspension and look for major faults that would be a red flag for purchasing the vehicle. He was also able to find potential problems and help use them as negotiating tools to help lower the price. Having a trusted mechanic or mechanically inclined friend can save you THOUSANDS in the long run, so I HIGHLY recommend this step. If you absolutely can’t make this happen, just Google “Common issues with xxx vehicle” and then you should get a good idea of what to look for. Or, even better, Google “Buying a used xxx vehicle, what to look for.”

We started up the motor, and popped the hood to check out the truck. I played with all the gadgets inside the car (moon roof, power windows/locks, radio, seats, A/C, heater, etc.) and my brother-in-law check out the motor. We heard a distinct squeaking coming from the engine bay, which was definitely a loose belt. No problem! Everything else seemed ok, so we hopped in a drove it around for a bit. The transmission was a little whiny, but shifted fine. All-in-all, it seemed to drive ok, and had every option possible. We also found that it had an upgraded exhaust and air filter, worth over $500! When we parked the car, we then noticed a coolant leak. It was getting a bit dark, so we couldn’t quite see where it was coming from. The guy was insistent he’d never seen the leak before, but now we had our bargaining chip!

The Negotiation

We got back in my car, and discussed what I should pay for the car if I were to buy it. We figure at worst, we’d replace the water pump and radiator, so it would cost about $500. The car, even with the leak, is worth the $3,500 because of the upgrades/options. But my brother wanted to bargain hard, and said I should offer $2,800, but buy it for $3,000 if it came down to it. I thought it was a low ball offer, but we got out and chatted with the owner a bit. I told him that with the leak and engine noises, I’d only be willing to buy the car for $2,800. AND HE TOOK IT! I could tell he felt a bit uneasy about the price (“Well, if it weren’t for the leak, there’s no way I’d take that deal”), but the deal was done!

When I have negotiated for other cars in the past, we usually meet in the middle. When you go to make an offer on a used car, I always go a few hundred dollars lower than you think you would pay. This is because the owner almost ALWAYS brings the price back up somewhere in between the listing price and your offer. If you low-ball just a little bit, you can meet in the middle, and both parties are happy. I lucked out a bit on this one, and drove off in my new (used) car with a big grin on my face 🙂 We did end up replacing the radiator and water pump, and while we were at it, did the timing belt, and new hoses and belts for good measure. So I’m $3,400 into the car total, and could sell it tomorrow for $4,500. Yep, I pretty much made money on this deal.

The Point

Anyone can buy a used car. REALLY! It is not inconceivable to have little experience with cars and go buy a used one on Craigslist. Sure, you might need a second opinion from a friend before even calling on it, and yes, I recommended having a “Buying Buddy” come with you, but YOU really can do it. And here’s the deal: YOU WILL SAVE HUNDREDS OF THOUSANDS OF DOLLARS over your lifetime if you follow these steps and buy used cars like a BOSS! I recommend that you buy a new car NEVER, and a used car after yours breaks, or is outgrown. And that’s it. It’s so simple, but for some reason, cars are a hurdle most of us cannot get over because we’re scared of them, so we fork out tens of thousands of dollars every 5 years for “reliability.”

Let’s throw some numbers into this:

Buy 1 USED car every 7 – 8 years at $5,000. Assuming you drive until you’re 76, that’s 60 years, so about 8 cars. Your total spent on used cars would be about $40,000.

Buy 1 NEW car every 7 – 8 years at $20,000. Assuming you drive until you’re 76, that’s 60 years, so about 8 cars. Your total spent on new cars would be about $160,000. THAT’S $120,000 MORE OVER YOUR LIFETIME. UGH! And we didn’t even factor in investing that cash over time!

Now, I know the haters are going to throw the “BUT THE MAINTENANCE” card at me, and let me just say that we have put VERY LITTLE maintenance into our used cars over the past 5 – 7 years that we have owned them. If you pick a good used vehicle, you can get years and years out of them, and spend the same amount on maintenance that you would on your new, “reliable” car. My 1994 Civic has 275,000 miles on it, and we haven’t done anything but oil changes, a tune up and a new exhaust for $150 in the past 5 years. Our Honda Accord has 294,000 miles on it and is the same story. And they still get 30+ MPG. We’ve put about 200,000 on those vehicles combined, and I can sell them for more than I paid for them 5 years ago. You CAN buy all used cars forever, become rich, and stop shredding your money faster than MC Hammer! Furthermore, there are plenty of ways to save on car insurance, too.

Comments: Do you love wasting money on new cars? Why? For my used car rock stars, do you think I missed anything here that would help others in their used car buying quest? I always say, when you buy your next used vehicle from the sucker that bought it new, shake their hand and thank them for eating all that depreciation for you! It’s pretty darn nice of them 😉

About the Author:

Jacob is the author of, a personal finance blog dedicated to putting the Fun back in Fundamentals of Finance. He is a husband, father and avid budget nerd who actually spent his recent birthday budgeting for FY13 at his home. If you ask anyone who has known him for more than 13 seconds, you would know he truly does Heart budgets.