How to Buy a Car When You’re on a Budget

My first car was 5k, I drove it 5 years, and sold it for 4k

Photo by Michael Heuser on Unsplash

Last year, I decided to sell my first vehicle which had served me well for 5 years, and fly to my new home across the country.

I ended up selling my car for just 1,000 less than I bought it for AFTER using it for 5 years.

The new car I purchased I’m sure will give me the same sort of return.

When you’re on a budget, a fancy car is often at the bottom of your list of priorities. You may even consider leasing to avoid the cost. But by driving a used car, I was able to spend 12 times less than I would have through leasing a vehicle- even if that lease had hypothetically cost me only 200 dollars a month.

Here are some of the best tips I’ve learned regarding what to look for when buying cars on a budget.

What to Look For

1. Reliable Models

Sure, you’ll pay more for a Honda or Toyota- even used, but it will be well worth the money you save in repairs over the course of your time with the car.

My first car was a 2004 Honda Accord. My second is a 2013 Honda CRV. Over the course of the life of both of these vehicles, I have had very minimal repairs.

Part of this is because the cars were taken care of prior to my purchase of them, and part of this is because I continued to take care of them when they were in my possession.

This means regular oil changes, tire rotations, fluid checks, and more. Regular maintenance is critical for maintaining any car, especially used ones.

If you treat your reliable model of a car correctly, longevity is close to guaranteed.

2. Private Sellers

You can often get a better deal from private sellers on a used car. Even if the vehicle itself is a similar price and mileage, it will be worth it in the money you’re saving in dealership fees alone.

Both of my cars have been from private sellers found through neighbors or Facebook Marketplace.

3. Unpopular Colors

Unpopular color cars are typically cheaper. That’s just how it is. If your primary goal is to save money- you may be willing to sacrifice getting a car that is your dream color.

You need to weigh your priorities, and decide what is really valuable to you. Color, model, or price?

4. A Second Opinion

If you are buying a used car, you should always get a second opinion. Unless your seller has kept detailed records of every single service, you shouldn’t take their word on what condition the car is in. Truthfully, even if they HAVE detailed records, you should still get an inspection. You never know what might be uncovered.

Most dealerships will do an inspection for 100 dollars or less. Considering the purchase price of a vehicle, I think it’s well worth it.

Now, there’s a caveat here, the dealership wants your business too. Read the report with a critical eye and, if you can afford it, consider having two different mechanics check it out.

After doing this with my newest car, I was able to negotiate more than another grand off the price of the car due to the repairs it would need in the near future.

Negotiation is a critical skill, but it helps to have concrete evidence from a professional to back up your claims.

5. A Car you Can Pay Cash

Financing is always a more expensive route. Sometimes it’s necessary, but if you can find a car you can afford to pay cash you’ll be saving a good amount of money.

It’s something to consider.

6. A Car That Will Hold its Value

This goes back to buying a reliable model. The thing about reliable models is, they have a widespread reputation for being reliable. This is how I was able to sell my 2004 Honda Accord for 4k after driving it for 5 years.

That means I spent 200 dollars a year for my car.

Not a bad deal if you ask me.

7. Mileage

There’s a widespread debate about whether low mileage or a younger car matter more. I would argue that they matter equally.

I typically try to find a car that is around 7–8 years old and has fewer than 100k miles. Mileage matters less for more reliable models which are known for longevity. Therefore I was comfortable buying my Honda CRV at 97k miles. It was only a 2013 and I knew it still had a good amount of life in it if I took care of it.

8. A Car Which Hasn’t Been in an Accident

This almost inherently reduces the length of a cars life. If it wasn’t a minor fender bender, there could be serious issues that are covered up by a beautifully painted exterior.

This is one of the reasons it’s so important to get a car inspected before you purchase it. But additionally, it’s worth it to pay for the Carfax report which can tell you this information before making a purchase. You never know what an owner may be trying to not disclose. Do your research.

The Takeaway

If saving money is your priority, I strongly recommend looking into buying a used vehicle from a private seller. Reliable models are key. If you can buy something that will hold it’s value, you can sell back your vehicle for a price similar to what you purchased it for. Not to mention, you avoid terrible repair costs, and the headache that comes with constant breakdowns.

Do your research, get an inspection, and don’t be afraid to negotiate for your next vehicle. However, even if you have to spend a little more up front for a car in better condition, it will be well worth the payoff.

Writer. PhD Student. Frugal Traveler. Passionate about health, personal growth, and saving money.

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