How to buy a cheap used car
When you don’t really need to drive all that much
As a designated Car Friend, people often ask me: Hey, James. Should I pick up a reasonably-priced used car and drive to the beach and sometimes suburban grocery stores? The answer to this question, of course, is yes, but that answer invites a much lengthier interrogation: What cars should I look at? What’s a good budget? Are private sellers trustworthy? In the spirit of that discussion, what follows is a comprehensive guide to buying cars for people who live somewhere that ensures they don’t really need a car, but maybe it’s nice to have.
It’s a good era to be shopping for used cars. Assuming you don’t rely on your car for daily transportation, it’s possible to get a perfectly decent vehicle for a small investment. Modern autos last far longer than whips of previous generations, and even a car fifteen years old in 2016 ought to feature a solid slate of creature comforts and safety features: power windows, AC, airbags, ABS, etc. The slings and arrows of depreciation ensure that used cars of a certain era trade hands at perhaps 10 or 20 percent of their cost new. What’s more, a savvy motorist can drive one of these used cars for several years, maintain it a bit, then sell it at nearly the same price. There’s a baseline where depreciation slows to a crawl.
You ought to plan on laying out at least $2,500 for a reliable set of wheels. It’s unlikely an example much under that price point will have many years of life left in it. Outliers exist, of course, but the risk somewhat overshadows the reward. On the other end of the spectrum, the once-a-week driver probably doesn’t need to spend more than $5,000. Between those points is the sweet spot for value and reliability.
What types of car am I looking for?
Japanese manufacturers tend to produce the most reliable cars. In the used-car bargain bin, Hondas and Toyotas are the longest lived, and also hold their value a bit better than the competition. Lexuses and Acuras are often perfectly affordable — these are just Toyotas and Hondas by another name. Nissans and Subarus are safe bets, too. Older cars from European makes are hit or miss. Plenty of folks drive their BMWs and Mercedes into the ground without experiencing a major repair bill, but frequent maintenance is critical for more complex, luxurious cars. An aging sports sedan with power seats, air-adjusted suspension and dual climate zones has a lot more components capable of breaking down. Low-end Euros aren’t safe either: elderly VWs in particular should be banished from your search.
American cars tend to be the least expensive on the lot, for good reason. There are certain models from Ford, Chevrolet, Dodge, and their sibling brands that are screwed together well (particularly trucks) but many of these products are real duds. Avoid anything that looks like it belongs at a rental counter in LAX circa 2005.
For a consumer in the market for a “regular” car, boring old sedans and compact cars deliver the best value. Trucks, sports cars, Jeeps, etc., are valued by enthusiast communities and command a premium compared to more sedate transportation.
What to look for in a used car ad?
Cliché, but true: the best marketplace to seek a used car is the same venue you used to sell your couch and find a Pokemon trainer: Craigslist. Certain regions have good local-paper classifieds, too, but Craigslist — temple of retro web design — always delivers.
Lots of people fear buying a used car from a private seller, but I prefer to do business with an individual. Dealers don’t know much about the history of their inventory, while a private seller can share the life story of their car. Private sellers are by and large honest, if occasionally less informed than automotive experts. Used car dealers specializing in the cheapest cars, by contrast, are often true bottom-feeders — the fount from which car sales stereotypes emerged. There are reputable used car outlets, but be on guard for a fly-by-night operation.
In evaluating ads, you’re looking for two things: maintenance history and plenty of clear photos. The more photos, the more likely the car is in good condition. Cars that invite close inspection should be advertised with shots taken from a variety of angles, showing the inside and under the hood. Check that doors all sit level, and that the color of each panel matches exactly — uneven body fit or paint can indicate a prior wreck. Look closely for signs of rust. Rust is the worst, usually a terminal condition, and especially a concern when shopping in the snowy, salty states of the northeast or Midwest.
The more maintenance an owner can demonstrate they’ve performed, the longer their car is likely to last, and the less money you’ll have to put into it. Ask about wear items that need to be regularly replaced: tires, brakes, battery. The longer a car has been with a seller, the more likely it’s been well looked-after. Mileage isn’t an urgent concern — it’s better to buy a thoroughly maintained car with higher miles than a low-mile example suffering from neglect.
Be aware there are certain big-ticket services all cars require as they age. Every 90k miles or so, most cars need to their timing belt and water pump replaced. This can be a costly pit stop, and skipping it is not wise. Cars over 100,000 miles often, but not always, require new exhausts, shocks, wheel bearing or axles — it’s a good sign if these repairs were repaired by the previous owner. If you happen to be shopping for a car with a manual transmission, the typical lifespan of a clutch is 100–150k, so the cost of a replacement should be factored into the purchase of a car that has traveled that range on its original equipment.
I’m going out to see a used car — how do I inspect it?
So, you found a promising lead and it’s time for an-person inspection. Ask the seller if they can avoid starting the car before your visit. Certain ailments are more noticeable on a cold start, so unscrupulous car dealers sometimes take the liberty of warming their goods up. When you get out to see the car, before you turn it on, conduct a walk-around. Do the panels fit tight?
Is the paint color consistent all around? Is there any rust in the lower edges of the body. The tires should all match and show good depth. Make sure all the lights and signals work, then check that the engine is full of fluids: oil, coolant, power steering and transmission fluid. [note: definitely do NOT check coolant level on a hot engine!] While you’re under the hood, peep the sheet metal around the engine: does it look straight and original? Poke your head under the car and see if it appears to be leaving any puddles of oil or coolant from a fresh leak. If there’s water under the car and the AC was just running, don’t fret! That’s normal.
Assuming you made it this far, it’s time for a drive. Start the car up, listening for untoward noises like squealing belts or a rattling exhaust. Did the check engine light illuminate when the key was in “on” and go away after the engine was started? Test all the accessories: windows, AC, wipers, etc, and hit the open road. Leave the windows down to better hear any potential mechanical issues.
Once you’re on the open road, see how the car responds to changes in speed and RPMs. Does the engine sound smooth or does it stumble? Are gear shifts firm and quick? Are bumps absorbed with aplomb, or does the car feel like it’s too low or too bouncy? On a straight, flat, safe section of road, release the wheel and check that the car drives straight. Push the brakes: do they cause the car to pull to one side?
Once you’re satisfied your potential purchase drives the way it should, it’s time to make an offer and do some paperwork.
How much should I pay for this car?
Uncomfortable as it may be to haggle, negotiations are a fact of life in the used car game. Dealers and private sellers both set their asking price in anticipation of being knocked around a little bit. The typical wiggle room in a used car price is around 10 percent, but don’t let that stop you from bargaining your way to an even better price reduction.
Before you seal the deal, tell the seller that you’re ready to buy, but you’re concerned the asking price is just too high. Often, a seller will do some negotiating on your behalf, and throw out a slightly lower number. Whatever the response to your initial entreaty, don’t accept the quoted figure immediately. Instead, suggest a price twenty-five percent under the most recent offer. That’s an amount close enough to ask to demonstrate you’re serious, and it’s further than halfway under the typical negotiations (ten percent), stacking the deck slightly in your favor. There may be a little back and forth from here out, but stick to your guns. It’s very, very rare to meet a seller with no willingness to deal.
The voyage home
I prefer to bring my used car purchases home immediately after negotiations. I head to the bank and withdraw the full amount (this probably means a visit to a live teller, not the ATM) and fill out the paperwork with the seller on the spot. The seller needs to sign over the title (check that it is “clean,” i.e., not salvage or repair branded), and provide a signature on a bill of sale. The BOS is not a complicated document. In nearly any state, the DMV will accept a handwritten agreement that lists the car’s selling price, Vehicle Identification Number and the names and addresses of the buyer and seller. A couple oddball states like Pennsylvania require this documentation to be notarized—a quick visit to Google should clear up the rules in your state.
If you don’t plan to bring the car home the day you viewed it, leave a deposit (10 percent of the sale price, or $500, whichever is less) and write up an agreement to provide the remainder.
One final hurdle in the transaction process: physically getting the car home. Odds are that on the day of your purchase, you are not equipped with valid registration and license plates for the new car. The easiest solution: drive it home with the old license plates still on the car (they’re valid until the previous owner cancels the registration) and mail the plates back to the seller. If the previous owner balks at this plan, you could ask her to drive the car herself to your home, and then offer to ferry her back. If these options are both off the table, you’ll need to leave the car with the seller and head to the DMV to secure registration. After getting license plates at the DMV, you can return to the seller and drive off into the sunset 100 percent legit.
For most people, buying a used car is a rare occasion indeed, and it’s easy to feel intimidated by the process. Don’t sweat it. There are lots of great used cars out there, and a little bit of research and preparation will go a long way toward a successful purchase. You’re going to do great!
