How to Buy a Used Car Like a Boss
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Please enjoy this post from Jacob at IHeartBudgets.net.
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.
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!
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:
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!
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.
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. You can also check out sites like Swagbucks to save even more on maintenance. There, you’ll find Advance Auto Parts coupons, carparts.com coupons, and coupon codes to hundreds of other retailers.
For example, 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 www.iHeartBudgets.net, 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.
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My wife and I both have new cars, but we did that before we were trying to save money. I’m not sure I would do it again, but I did love my new car when I bought it.
New cars feel good, because they subtly siphon gobs of cash from your bank account in the form of depreciation. You don’t feel the pain of this until you go to sell the car for 10% of what you paid for it. 🙂
Very timely article for me. We’re in the process of looking at cars right now. I really like the idea of bringing a buying buddy along, especially since I know next to nothing about cars. But the research I’m doing now tells me that some of these guidelines, while they certainly might be able to save you a lot of money, aren’t necessarily the right way to go every time.
Depending on your driving habits, you could buy a new or barely used Honda or Toyota and get 15-20 years out of it. If you can do that, the up front cost starts to look very different. I certainly hope your 200k mile 4runner lasts you that 7-8 years, and you seem to know your stuff, but I don’t think it’s quite as guaranteed as it’s presented. While your personal experience might have been great, I can tell you that my brother bought a 1997 Honda Civic with about 120k miles, and everything looked great but within a couple of years it started falling apart. So while it can work out, it can also leave you needing a new car again very soon.
Also, I wouldn’t rule out a dealer by default. I think you need to know the price you want before you go buy, whether you’re working with a dealer or some guy off craigslist. But if you can get that price, then it doesn’t matter where you’re buying it. It IS a bad idea, however, to simply let the dealer tell you whether you’re getting a good deal. If that’s your approach, then yes you will unnecessarily pay too much.
Matt, I totally get where you’re coming from, and yes, Hondas/Toyotas last longer if you buy them new. But the KILLER for any new car deal is one word: DEPRECIATION. Sure, it’d be nice to own a car for longer, but you’re losing a ton of money as the car’s value plummets. And a new car every 7 – 8 years is much better than the average American 🙂
I almost always sell my cars for what I bought them for, and that way I’m just basically borrowing the car for 5 – 10 years, instead of leaking money all over as my new car value drops…
But, of course, it’s all about comfort level. All I’m asking is that you do a little more research and run the long term numbers to maybe move your comfort zone to a place where you can buy a used car without being scared of it 🙂
Yep, always a ton of variables involved.
It’s great that you mention ‘comfort level.’
It’s similar to buying/renting a home — there are a Lot more variables than just financial ones…
We know nothing about cars, so aside from maybe getting someone to go with us to look at one, we don’t have a close friend or relative who can do repairs for us all the time. I am certainly for buying used, but probably would not buy one that old, but it sounds like you have had very good luck doing that. Good score!
It is important to connect with someone who knows cars a little bit if you don’t. I have no problem with someone buying newer, just know you will be losing quite a bit of money every time 🙂
This article was great timing for me. I plan on buying a used car within the next few months here and definitely would like to get one for cheap. Thanks for sharing the tips!
Glad to help, DC! Let me know how it goes 🙂
Great advice… congrats on what sounds like a wonderful purchase.
Thanks Michael. We’re really diggin’ it so far. The exhaust makes it sound pretty bad-@** too 🙂
Im all for buying used cars and usually have my mechanic go check out the car before I even go look at it. Its a small fee but it saves a lot of hassle. Great deal on the car only $2800. He must have really needed the money. Its amazing how often people will drop the price of a car instead of getting something fix that was only $250 so that they can get top dollar. Their loss your gain.
Having a mechanic on call is the BEST way to make sure you’re getting a good car. Might cost a hundred bucks for an inspection, but could save you THOUSANDS, plus the headaches involved in buying a lemon.
Jacob, I definitely agree that it is a good idea to have your car inspected and checked on before you purchase it. That is something that can help save you from getting a really bad deal. When it comes to buying a used car especially, you want to make sure that you are getting a worthwhile vehicle. This is a great way to save you from having a lot of problems down the road.
Why would you buy a new car every 7-8 years? Why not every 15 years or more?
(And those barely used hondas and toyotas someone above is talking about cost almost the same as new hondas and toyotas… it all evens out.)
My Toyota can go 15 years, I have no doubt of that. But since people outgrow cars, 7-8 years is the number I went 7-8 years. The numbers don’t lie; New cars depreciate, and my cars don’t. My last 3 cars purchases will not lose money, because I get good, cheap, RELIABLE used cars, used them for what I needed, and will be selling them for what I bought them for. Maintenance can feel like throwing money away, but is not NEARLY as much as depreciation. And new cars need maintenance too!
It really does NOT even out in the end, used cars will save you thousands upon thousands. People will give any reason to excuse wasting money on a new cars, but mostly it just comes down to being scared of used cars.
Not trying to be harsh, and I’m not saying you are scared of cars, but it is a common refrain I see every time I say to buy used cars over new.
There’s a reason for worrying about used cars. It’s called “lemons.” There’s some probability you’re going to get a lemon. Used cars, on average, don’t last as long as new cars (that’s true with or without the increased probability of getting a lemon, as people with lemons are more likely to want to sell than people with peaches, causing a downward spiral, which you can read about more in the link I provided). Things that reduce the probability of getting a lemon increase prices of used cars. Certifying used cars brings their prices up. Lemon laws bring the prices of cars up. Markets work. These things even out.
I have a PhD in economics. I’ve read the research (see above link for textbook example). You’re saying these things because you believe them, but that doesn’t make them right. Lots of people say them, but they’re not true.
I’m not trying to be harsh, and I’m not saying you’re a blowhard or an ignoramus, but it is a common misconception I see all over the pf blogosphere.
I can’t argue with the data (I did read your post), and there is a real fear of someone getting a lemon, but if you make all choices out of a place of “what if”, then you WILL spend more money in the long run. If I spend $3k on a car that turns out to be a lemon, I go get another $3k car that isn’t, and I’m still MILES AND MILES ahead of those who bought new out of fear.
I’m also talking about individual people making purchases, not what averages out over a case study of thousands and thousands. If I can convince 5 people to put down the key to that new car, go home and do some research, and get a good, reliable, used car for $25k less, then I feel I have served them well.
The hard part about new cars for me is that they are not proven. Who knows if they’ll crap out or not? With used cars, you can just google “common problems with xxx car” and find out what the factory issues were, what happens at 100k or 200k miles, and get feedback from real owners on how to make your car last a long while. And again, if it doesn’t work out, you’re not out $25k.
I totally understand where you’re coming from, but I feel like your sending me data for 10,000ft. up, and I’m down here talking to individuals to help them not throw money away. I hope you understand my point of view.
And I do appreciate a disagreement, and as it helps all sides be more informed 🙂
We spend money on cars, but that’s because we also enjoy them. 🙂
Michelle, you’re like the one exception to the rule 🙂 I mean, just look at your CommentLuv post linked in your reply here. I think you’re good to go 🙂
Awesome guest post! Its great to hear the nitty gritty of your actual experience. Im totally on board to only buy used cars. It has the potential to cut years (maybe decades) off your working career.
Ross, I like the way you think. We should all measure our purchasing decisions in how many more years we would have to work for them. Brilliant!
I’ll be in the market for a used car within the next year or two I think (fingers crossed my car lasts that long!). I don’t think I would buy something that has 200k miles on it, but definitely used. I have to admit I’d feel nervous going through CL,but if I had a friend who knew a lot about cars and was willing to help I’d feel more comfortable with it. My biggest fear would be getting a car and having to do a lot of repairs on it. Glad you found such a great deal!
Definitely find a friend who knows what’s up, or have a mechanic on standby that you can bring a potential used car to. That will give you peace of mind, and help make sure you get a reliable car. I have no issues with lightly used cars with less miles, but I suggest at LEAST 5 years old, because the car will have depreciated at LEAST 50% of it’s value by then 🙂
When I bought my car I went to a used dealership. I did a lot of online shopping and found that the car I was looking at for the mileage at the dealer was cheaper than the ones on Craigslist (with lower mileage). But I can see how buying from owner would be better for getting the price down.
You have more negotiating power with an owner, but I guess if the price is right and you’re not dealing with a trickster, an honest used car dealership (did I just string those words together?) wouldn’t be bad.
During our car negotiation, I thought something might be wrong with the motor. We made a deal: I’d take it to the shop and if the mechanic said there was anything wrong, we’d take that off the negotiated price. I ended up getting the car for $1,500 less to pay for repairs that had to be made.
Yup! Have a mechanic on your side, and you have all the power 🙂 Nice work, Joe!
That was a really awesome tactic that you used to help ensure that you were purchasing a working car. I would hate to have to purchase a car only to find out that there is a major issue with the motor. Next time I go car shopping, I\’ll definitely have to ask if I can take off a sum from the asking price for any issues found at an auto repair shop.
We’ve tended to buy cars that are about 4 years old with low mileage. But we don’t exclude dealers from our searches. Some of the dealers are very reputable and will take back lemons the way that private craigslist sellers won’t. Mr. PoP had to rely on this once when a Toyota he bought showed unsafe levels of rust in the frame just 3 months after he purchased it from the Toyota dealer. A call to Toyota corporate and the dealer took it back.
I guess I’m buying cars that are at least 10 years old, so the type of dealership I would deal with is much sleazier! Nice work on taking charge and getting your car returned without much hassle 🙂
Great find, Jacob!! Buying used is so scary to us, because like Kim said, we have no idea what we’re doing. But we did buy our Suburban used and it’s been good for us.
Being scared of used cars does have a cost attached. I always encourage people to Google “most common issues with xxxx car” when searching, and get themselves educated so they know what to look for. That, and having a mechanic friend, and you’re good to go. Glad to hear your Suburban has worked out 🙂
Well, I can say that I have a new car and I very happy with it. I did it for a couple of reasons, but I also have a 1990 Jeep wrangler that I got for a freaking steal. I am fixing it up as we speak, but I am glad that I only have on car that is a fixer upper. If you don’t know a lot about cars or at least know someone that does, you have to be very careful with Craigslist. There are many things that can be wrong with older cars, so you need to be very vigilant when you test drive it. There are no warranties, so you are in when they sign over the title to you.
Getting educated online can help avoid most of the used car pitfalls. A simple google search on “common issues with xxx car” will tell you what’s up with your potential buy before you even head out there. New cars should have a depreciation meter built in to see how much money you’re losing each day, but that might just be me 🙂
Glad you’ve enjoyed the car, and if it doesn’t bury you financially, then you’re all good. I just want to get people to think differently about used cars 🙂
This is a thorough run down and I especially like the numbers you’ve shown to illustrate how the habit of buying cars new or nearly new is tremendously expensive. Any single purchase seems reasonable…but there are very few “single” purchases in a lifetime…nearly all are habitual.
It really does compound and cost you a TON of money. I hate the idea that new cars are “more reliable”. How do you know? The car doesn’t even have a proven track record yet!
Great timing since I’ll be looking into buying a new car within the next couple of years. I think I might pick a newer model (4-6 years) with lower mileage so that I’m able to keep it for 12+ years like my current Honda, but the other points will be very useful!
You’re set. 5 years old and most of the depreciation is gone, and it’ll last for a long while 🙂
Very timely since we’re looking to buy a used car soon. I absolutely hate the process so it’s easy to procrastinate. But this piece helps get me moving!
It really is fun one you are confident in your purchasing skills 🙂 Good luck!
This is great advice. Sounds like you got a heck of a deal on a great car. I’ll be in the market for a new car in the next few years, so I’ll have to put these lessons to use then. Thanks for the tips and enjoy the new (used) car!
I bought my new (used) car from a private owner. I actually went to dealerships first, but I got tired of their BS. I bought a 5 year old car, so the original owner had eaten the cost. I am a big believer in buying used cars.
You rock! Exactly what I would advise anyone to do!
I don’t know enough about cars or really know someone that knows enough to go for the 200k + route. I don’t mind 3 – 4 year old, low mileage cars. Sounds like you got a pretty terrific deal on the car though.
Try a 5 year old car. Cars (on average) lose 70% of their value in the first 5 years. May as well have someone else eat that depreciation and let you enjoy the discounts 🙂
We bought both of our vehicles new and have had them for about 8 years now. We paid cash and I have no regrets buying new because that we preferred. I did have a co-worker who bought a car through ebay. Thankfully the car arrived safe and sound and ran well – all things you really have to take for granted when you’re negotiating virtually!
Glad you have enjoyed the cars. It’ll hurt a bit when you sell them for super cheap, but if you feel it was money well spent, and you’re still on track toward your financial goals, then you’re good. I would just reconsider next time you go to buy a car, as you can save 50-70% off by buying 5 years old instead 🙂
“Recently I dropped some coin on a sweet ride for my wife”- best opening line ever.
You know how I be BALLIN’ ON A BUDGET!
Great post Jacob! I think the only time one should consider buying new is a) if you plan to keep the car for at least 10-15 years or b) if you can afford the hit of depreciation. For example, a millionaire could afford to buy a new car because the depreciation does not impact his or her financial situation. That being said, there are a lot of statistics that show the average millionaire does drive a used car.
Yeah, I mean, if you want to blow money on the thing that drives you to work so you can earn money to spend more of it on the thing that drives you to work so you can…..(you get the idea) , then go ahead. Just know that is the best way to stay broke. If you’ve got money in the bank, though, no need to worry about trivial things like cars. You should focus on whether you’re gunna get the G5 or the new G6 private jet 😉
I get the buying used thing. But that could be said for A LOT of things–buying used clothes all the time instead of buying new, buying used furniture, etc. Are you EVER allowed to enjoy the fruits of your labor or should it just all go into retirement so you can enjoy it when you’re old?
I am open to buying a used vehicle in the future but only a few years old, definitely not as old as you mention. I like driving and I like driving a nice car. I don’t want to be in run down models all the time. And having a 15-20-year-old car doesn’t cut it for me. (We keep our cars for at LEAST ten years)
We buy used everything! And walking into our house or life wouldn’t give you the impression AT ALL that all we have is dumpy, used crap. I think everyone should enjoy spending money. But I also think everyone should exercise extra wisdom in the purchases that could have a HUGE impact on their financial future. Cars are probably the biggest thing keeping the middle class broke today, for the simple fact that they depreciate A LOT! Not to mention the insurance, car payment interest, warranty extras, sales tax….It really can screw up your short AND long term plans.
You don’t need a 20 year old vehicle to take advantage of the suckers who buy new cars. Just get something 5 – 7 years old, and that first owner has eaten most of the depreciation for you. That $40k car is now $10k. It still has 15 years in it (Honda or Toyota), but you can sell it in 10 years for $5k, and you only lose $5k, not $30k. Take that extra $30 and put it to work elsewhere. If you buy new, you are burning that cash.
I love cars. I am a car enthusiast. I have driven new, nice cars, and have driven the biggest pieces of junk ever. The car we just bought is almost 20 years old, has at least 10-15 years left on it, has more options than many new cars, and was ridiculously cheap. I WILL sell this car at a profit, or break even in 5 years or so if we outgrow it.
And the idea that buying new things allows you to “ENJOY LIFE MORE” when you’re younger is a load of crap. I don’t feel like I’m missing out on anything right now, we have an over-abundance of stuff (all used, of course), and new trinkets are only there for temporary enjoyment, and then it becomes just as mundane as everything else. We’re not waiting until we’re old to enjoy life, we’re enjoying every minute of it right now. And we happen to be saving a TON of money ALL THE TIME by NOT buying newer cars 🙂
I just got Greg a new pair of swim trunks. Guess where I got them from…..
in the middle of the street! I actually found them in the middle of the street when we were taking the kids for a walk. They’re actually really nice. He’s totally pimpin’ now.
As for cars, we always buy cars that are a couple years old.
At least it wasn’t tighty whities…. LOL!
The key to negotiation is always be willing to walk away. Stick with the price you want and walk if you don’t get it.
Very true. Once you’re sure of the highest number you’re willing to pay, don’t change it because of emotion.
People too often shy away from used cars because of supposed maintenance costs, but a little research goes a long way.
That’s all I’m trying to say here 🙂 Put in a little time, educate yourself, and GET RICH! 🙂
Buying a used car vs a new car has longer term benefits to including a much lower insurance rate.
Right now I am living with a crappy car and people keep trying to convince me to buy a new one but I am planning on holding off for as long as possible since cars can be such a $$ pit.
There are many coworkers who are buying $30-$50k cars/trucks….if I were willing to spend that much (which I am not) I would much rather save the extra money and buy a toy (boat, bike etc).
Thanks for sharing your story and crunching the numbers on how much you save buying used vs new.
Thanks for reading, Jon. New cars really do suck your long term growth potential WAY down, and don’t deliver the value they promise (I’ve driven both). Used cars are great, and enjoyable in all the same areas, but are a small fraction of the cost. I’m with you, if I had the money, I’d spend my extra $30k – $50k on something way cooler, and hopefully something that doesn’t depreciate!
There’s no way I’d spend my money on a new vehicle. When I moved to Canada I did buy a used vehicle but I spent more than $5k . I spent $15k and paid cash for it. I have had no problems at all but I take good care of it. I also get it sprayed once every couple of years to prevent any rust. My wife on the other hand bought a new vehicle for $30k and it’s a 2003 model (paid for now) and it is in mint condition and has well under 100,000 k on it. No major problems at all. Like you say if you can find a good used vehicle and take care of it then it should last you a good amount of years.
$15k is more than I would spend (for now), but you’re much further along than I am financially, so you’re set. I’m glad the new car has worked out, and though I’d never make the purchase, it sounds like you’re not stuck in a perpetual cycle of broke-ness because of the cars. Now, the $64,000 question is: What will you do when you need your next vehicle…? 🙂
I have never had a brand new car. Although, my last car was fairly new and only had 12k miles on it when I bought it. I completely regretted buying it and have a $300/month car payment. I paid it off two years early and have vowed to drive it until it can’t go any longer.
Nice work on paying it off quickly. Bummer that you were stuck with a payment on it, but you’re free now, and won’t do that again 🙂
I pretty much did exactly as you said when I got my used civic. I went on craigslist, only looked at cars with pictures, looked within my price range, made appointments and brought my dad along. He knows a lot about cars and I got a pretty good deal on my car without having to worry. I’ve had it for four years now with no issues, and I’m hoping to have it for many more! While new cars are nice, you’re right that it doesn’t really make financial sense. I would rather wait a while to buy.
Sounds like my 1994 Civic. Well done!
When our car was flooded in Sandy we decided we’d buy another used car with cash. Although it was incredibly frustrating buying a car when our old car was perfectly good (and probably would have lasted another 5-10 years based on how infrequently we drive it), we were really glad that we had the money to pay for a good used car in cash. Honestly, I don’t think we’d ever buy a new car again.
New cars just reek of “I need to throw as much cash out the window as I possibly can and never see it again”. I’m with you, I don’t think I could buy a new car unless I have a few million in the bank. And even then….don’t know if I could do it!
I can’t buy 10 year old cars where I live as there is just too much opportunity for shady sellers but I do plan on buying a 5 year old used car when my ’02 Corolla dies. I would add that if you ever encounter anyone who is just so anti-used, a good way to get a practically new car that is selling as used is to find a used car with less than 2,000 miles. Often used cars with ultra low miles and still the same year model are returned cars, for whatever reason (I had a coworker who had to return a new car after their credit was later denied after the thorough check). My mom ended up getting a 2013 loaded Chevy cruze with 1,400 miles that MSRP’ed for $27,000 and was selling at the dealer for $17,000. Still high, but for a person that needs that new car feeling, that’s the way to at least get them to buy used.
There are sometimes great deals out there, though I would never spend $10k on a car unless it’s a fully loaded sports car! 5 year old cars are a minimum for me, because most of the depreciation is gone at that point. Sorry to hear about shady sellers, those people are frustrating. Just make sure you bring along a trusted mechanic friend to verify everything before pulling the trigger on a car.
Test drive is most important before buying a used car, you have shared informative article how to buy a used car, it was really a great post, keep it up.
Buying a second hand / used car is one of toughest task in the world to me. Because there is no guarantee of the car and it’s parts. Need an car expert to select the best one. There are so many hidden problems which the seller will definitely hide to you. This post will definitely going to help those people who are looking to buy used car.
Thank you for all of the info you put on here it help me. Thanks again
What are your thoughts on title rebuilt used cars?
I avoid this as a general rule. That’s just asking for a lemon.
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Given how much cheaper used cars are than new ones, I might just stick with buying used cars from here on out. While having the newest model would be nice, it\’s still a lot cheaper to get something used that was made in the last 5 years. As long as you\’re careful, they can last just as long as brand new cars.
Nice post Jacob! There are a lot of aspects to consider when looking for a new car but these two is always a must for every purchase. First, there is usability. If the major features of your the vehicle is working then there shouldn’t be a problem. Second is aesthetics. If your purchase doesnt look good or has major damages in it’s exterior then you’ll have a pending expensive maintenance. Although, minor damages are exceptions.
I agree, but however smooth the test the test drive is, it’s important that you check what’s under the hood. Nothing beats a close inspection on the engine, just to check if the car you’re buying is really worth the $$
My wife and I are used car kind of people. We are like you in that we also have a cap limit on what we are willing to spend for a used car. I think that this strategy most of all has really saved us money on potential lemons.
I like the points you made about the significant difference in buying used cars throughout your life. i think that a lot of people could learn from that kind of thing. Even beyond the savings on the cars themselves and the possibility of investing the extra money, like you mentioned, there are even more ways to save. If you’re able to buy the car outright, you can pay less on insurance because you won’t be mandated to have full coverage, you have no car payment, which means no interest on the vehicle, and generally your repairs are going to be cheaper and easier to do. Hopefully more people will understand all of this in the future.
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You are literally throwing money in the garbage when you buy a new car and drive it home. A used car is definitely the way to go. It\’s all about doing your research and not buying from someone too shady. There\’s always the possibility that it will be a lemon but I\’d rather take my chances rather than spend thousands more on a car that won\’t be worth that much the second I turn it on.
These are some really helpful tips! I know a lot of people don’t understand the importance of the search; the first car you find that checks all the boxes on your list is almost never the right one. And even if it is, it’s ways best to keep looking and looking, even in places where you wouldn’t expect to find anything. This is a big purchase, and you want to make sure not to limit your own options by falling in love with the first car you see.
Thanks for the tip to really specify what you can’t live without in the search qualifications. I tend to leave the range more open than detailed because I’m afraid of missing a post I might not have seen otherwise. However, it really does take a long time to sort through them all. I’ll have to start narrowing things down a bit better and see how it goes!
I think there are pros and cons to buying new versus used. If you buy new and want to sell it in 5 years, you would likely retain a lot more resale value than if you’d bought it used. And with a new car, you have all new parts and you can know what maintenance has gone into it. With a used car, it’s a gamble as to if the timing belt has ever been changed, or if they kept up with oil changes, etc. But you do save a lot on used cars, and I don’t mind buying parts and doing our own maintenance. I think it depends on how highly you value the condition of your car. If you can find a used car that has been very well maintained, with receipts and service records, and save thousands of dollars, then I say go for it, so long as it runs and drives well.
I am going to be buying my first used car soon, and I want to make sure I get a good one. This being said, I really appreciate you giving me some insight about this, and letting me know what I need to do to buy a used car. I will definitely search around and talk to people to find the best price of a car. Thanks a ton for sharing this with me, it was a big help.
The price differential you mention really hits the point home for me that pre owned cars are significantly cheaper to buy! I knew that buying used cars was a good idea, but $120,000 is absolutely astounding. Like you say, with the time value of money factored in, that difference will grow exponentially. Thanks for the information.
Great advice for buying a used car. Having in mind exactly what you want before starting your search will help you stay focused and keep you from making the wrong decision. Thanks so much for sharing!
Very much thankx to you for bringing up this article for us 🙂
It\’s a matter of fact that, better used cars can be avilabvle in the market at very negotiable price which one can afforfd.
yeah all you need to check up on the car you are palnning to buy and the needs and uses among the family members.
Thank you very much for bringing this to us.
Have a good day.
I recently bought a New Jeep Wrangler Unlimited, but i have plans to keep it forever if I can. So hopefully I’ll be able to get back to saving once its paid off. Great negotiation by the way!
Your post is very suitable to my situation now. I am wondering how to buy a used car without spending over $5000 because of my limited economic fund.
Of course, it is always ideal to try something first before buying it. Used vehicles, most especially, should be test-driven first before purchasing them.
Yeah, I’ve never actually made car payments, I’ve always just bought things outright, so the prospect of ever taking them on is not appealing to me. I think if my car fund isn’t high enough for a new car when this one goes, a used one will do me just fine.
I like your advice to figure out what you want or need in your car before searching for it. As you experienced, it’s much easier to search few a handful of cars with your specifications than it is to look through hundreds of listings with various features. Deciding on a price range and some necessary features can help you find the car you want faster while staying within your budget. Thanks for the advice, and congratulations on the good deal!
These are some great tips fore buying a used car. I agree with you about taking a friend with you to check out the car, especially if that friend knows more about cars than you do. I don’t know much about cars, so this is really important for me!
I often get caught up “falling in love” with a certain car. Yes new cars feel great to drive off the lot, but the money saved on used is worth it for me.
Nice post. I would prefer purchasing a new car. I understand it will cost me more, but I guess I will be stress free in terms of its overall performance. These are some really valid tips to keep in mind before buying a second hand car. But I will still prefer going for a brand new machine for myself .
I am so clueless and somewhat susceptible to advertising/persuasion. Gotta learn to stick to my guns!
I would never buy a new car. Used cars are so much cheaper, and you can find some great deals. I like how you mentioned taking a friend to check out the car, especially someone who knows about cars.
There’s some great advice in here! Knowing someone who knows how to look for broken parts in a car makes buying so much easier. I loved my 4Runner, and I hope yours lasts many more years! Thanks for sharing!
Awesome post! Definitely some great tips and advice on how to buy used car.It’s also great to start a saving account for emergencies or long term goals! thanks for sharing this awesome article.I am so glad that reading your article.love it.
Great tips! You must to know first the mileage and have a engine check. If you like the car, consider having it inspected by a mechanic before you buy it. Thank you for sharing this.
Excellent tips! Also making sure its not rebuild salvage would be better idea as well.
Hey great share….
I was thinking of buying a car from quite a long time but I was little clueless. After reading this post I am pretty sure I am gonna crack the right deal. Your post is definitely going to be helpful.
Thanks for sharing this post. Keep sharing more…
Great tips! I totally agree with your advice. I am on board to buy used cars and great luck for me to have this post before! I was thinking to a long time to buy a new car. now it’s much easier to search handful cars with a lot of features and the understanding of a price to make a good deal! Thanks for sharing, I am so happy to read your article.
Thanks a lot for the article, helped me a lot to get the used car according to my budget. 🙂
Get the second hand car inspected fully by a mechanic you trust. This helps to either get the problems fixed by the owner before the purchase is done, or helps you negotiate the price.Check the existing insurance papers of the second hand car you are going to buy.
I think I can make use of your advice. I’ve been meaning to get a car (yes, a used one) but I’m torn between a Honda and Toyota brand. Most people recommend Toyota because they are eaiser to maintain and also rugged. However, I’m looking at Honda because they are cheaper but might give problems in the long run. What do you think?
Thanks for the tips and i really like the mid-90’s 4runner “Limited” idea to get the used car for me.
Thanks a lot for give this nice article,
Talk to friends who have owned a particular model that you’re eyeing, and Google the car’s reputation. “Forewarned is forearmed,” as they say. To get a feel for the market price of the car you’re looking for, visit some used-car dealerships. Also, check the Internet for the cost of parts, and list down several shops that stock up on your prospective car’s parts.
My family have always bought used, it’s just a lot easier for us and you seem to get more bang for your buck.
However, with a new car you can spec out your new pride and joy to meet your exact specifications, so if you like the idea of being able to customize your car, and have the budget, it can work great.
I like that you mentioned that the start of looking for used cars starts on the local inventory. My brother is looking for a new car and I am trying to help him out. We will need an auto part expert if he can guide us on good used engines nearby.
Hi!! Great article.Interesting stuff for used car buyers. Thanks for sharing this useful information! I believe this article has sooooooo many good thoughts that are hard to imagine…