I have about $10k to spend on a car but I’m unsure about my best options. Should I save up for another couple of years and buy a new one? Should I buy a used car with what I have? Should I buy a new one and finance what I can’t afford right now?
My priorities on a car are:
Fuel efficient (miles would 65% city, 35% highway)
Reliable
4 door
Seats 5
Needs to last at least 10 years (120k miles)
I can afford 10k up front, and am very debt averse (I have no debt at all except for a mortgage).
Beyond that, I’m really not picky. Based on these requirements, I’m pretty focused on either a Corolla, Civic, Accent or Elantra. Unfortunately, all these cars new are pretty much out of reach for me. Even the Corolla used is a pretty expensive deal.
So where should I be looking for a good used car? I check classified ads and autotrader.com regularly. There are several Hyundai dealers in the area that still have 6 or 7 2005 cars on the lot, but they don’t seem willing to deal below $12k just yet. I’d take a new Elantra for $12k.
Why not finance the rest of the cost? With a $10k down payment, you should get a pretty good rate through your bank. If you buy a $15k car with a $10k down payment, and maybe $1k from a trade in, you will only have to finance $4k. You wouldn’t have to worry about gap insurace, and payments would be pretty low.
But for what car to get, I’d get a membership at ConsumerReports.org and compare the models you want. Decide what you think is important and pick the cars you want to look at. Take a few test drives of the cars you are considering and then go back the next day to buy the car.
I’d look for a used Honda Civic. They are incredibly reliable and routinely go hundreds of thousands of miles before needing major repairs. They also get great gas mileage. If you can’t find one for $10k or under, finance the difference. I know quite a few people who own Civics and they’ve all been very happy with them.
I think a used car a couple years old with 20,000 - 30,000 miles on it is the sweet spot. You’ll pay a lot less than a new car costs and still have the majority of the useful life of the car.
Don’t pay the asking price for a car. Undercut the asking price by at least $1,500 or so. I know some people hate to do this but believe me they’re not going to accept any offer that doesn’t make them enough money.
I’d suggest staying away from Hyundai, they haven’t been know for great long-term reliability. I’d go for a Honda Civic or Accord, or a Toyota Camary or Corolla. All of those cars are generally very reliable and efficient.
I definitely would prefer a Civic or Corolla, but the only problem is even used ones of those cars, 2 to 3 years old with 20,000 to 30,000 miles on them, still run $13k or more. And that is even if you can find one!
Mazda and Nissan make better cars than Honda and Toyota.
A QR25DE or SR20DE powered Sentra would certainly qualify (SE or SE-R models). So would a Mazda Protege or an early Mazda6 with a manual gearbox. Avoid automatic-transmission Mazdas as that’s a Ford gearbox that breaks regularly.
I love my 2000 Honda Civic. Beautiful little car, runs great, excellent mileage.
Don’t buy new. The depreciation is too fast. Buy a one-two year old car. Get it checked out by a trusted mechanic before you buy it. Beware of “deals” from cars from New Orleans…they may be dried out flooded cars that will give you nothing but problems.
Autotrader.com is usually a good place to look. I don’t know if you have a Carmax near you, but they tend to have good clean (but somewhat expensive) used cars. And a used car lot in your area that’s been in business a long time might be a good prospect. Or check the dealers for trade-ins, it’s not impossible to get a decent deal there.
I still say stay away from the Hyundais, if you want a car to last 10 years a Hyundai isn’t it. They’re getting better but the long-term reliability of the newer models still isn’t proven, and the old ones that are on the road are belching black smoke.
I have to admit I hadn’t looked at Mazda, though. I’ll check that out.
Does depreciation really matter if I plan to drive the thing until it drops?
The only issue I have with used cars is that you don’t know how well they were broken in, and I’m not sure a mechanic could discern that.
I keep looking for a good deal on a used car, but they just don’t seem to be out there. I almost had a dealer take a $9k offer on a 2003 Hyundai with 11k miles, but they balked on it.
Only insofar as it affects the overall cost of owning that car for its lifespan. As an example, if a car is likely to last 10 years and costs 15,000 new, plus another 5,000 in assorted repairs over its lifetime, that’s 2K/year to own it. If you buy it at 2 years old (8 year lifespan) for 10,000, and you’ll wind up spending 4,000 in repairs, that’s 14,000 for 8 years, or a little under 2K/year. Don’t cite me on any of those numbers, they’re totally made up to illustrate the point
There’s a financial columnist for the Washington Post, who says “buy used, and keep the car until your mechanic is on speed dial”.
My gut feeling: if you need transportation now, and your current car (assuming you have one) is really on its last legs, go for a good quality relatively recent used car. If you need to borrow a little to get you into a better used car (i.e., your cash on hand will only get you a 1988 Yugo), that may well be worth it. If your current car can limp along for a bit longer, hang onto it while you save up for a better replacement in a year or two.
When debating new/used, I just wonder how much it is worth knowing that the car was broken in properly and has been well cared for from the time it left the dealer’s lot. Certainly a 1 or 2 year old car is a better deal assuming everything else is equal.
My present car might last another year or two. The transmission is slipping and little (and not so little) things are starting to go on it. I just thought $10k would get me a better car than one with 60,000 miles on it that is 4 years old.
You want extensive recorded history of the used Civic or Corolla? Then consider buying from a car rental company. They’ll supply the mechanical history of the car from the moment it rolled into their lot.
I purchased my Camrey @ 33,000 miles from Enterprise Rentals. It’s been over a year and no problems. You WILL probably want to change the transmission oil and filter right off the bat.
You’ll save a lot if you buy from a private party v a dealer. Thanks to the awesome deals that auto companies have been promoting in the last few years (e.g. employee pricing, 0% interest for x years), there is a glut of used cars in the market.
Look in the Sunday section of your local newspaper. Or if you live in a metropolitan area such as NYC, be willing to travel a few hundred miles south or east to pick up better deals. E-bay has cars from all over the U.S. if you’re willing to drive. Look for an older car with low mileage. Age doesn’t mean nearly as much as mileage.
If you’re not a good negotiator, then find someone who is and ask them to negotiate on your behalf. You should be able to find a good car for $10k.
I had great luck with my Mazda 626. I sold my 10 year old 626 with 70k miles for $4500. I know that that car was good for another five to ten years.
Everyone else has given sound advice.
I’m going to chime in with something a little bit contrarian.
The cheapest way to own cars has nothing to do with buying new.
Buying cars with 2-3 years on them is, as previously mentioned, the sweet spot for getting a semi-new car.
The cheapest way to own cars also has nothing to do with buying any nationality of vehicle except for American or Korean.
Why?
American cars depreciate like mad. So do Korean cars.
Japanese cars hold their value ridiculously well.
European cars also hold their value remarkably well, additionally they’re simply not available new at low prices.
A typical domestic mid-sized like a Ford Taurus that’s 3 years old and from the cheapest trime line of Taurus goes for $6556 in a person to person sale. [1]
A typical Japanese mid-sized like a Toyota Camry that’s 3 years old and from the cheapest trime line of Camry goes for $12106 in a person to person sale. [2]
The only mid-sized Korean car I could find for comparison was the Hyundai XG350. 3 years old its cheapest trim line goes for $8298, but due to its luxury marketing, its options place it uplevel from either a base Camry or Taurus. [3]
It is true that the Camry in the above comparison is likely to break down less than either of the other two cars, but the up-front savings factor with US or Korean vehicles will pay for quite a few trips to the mechanic, and likely leave you with some money left over even after repairs to begin saving towards retirement or your next car.
I feel that the only way to get a deal on a Japanese vehicle as good as you could get on a domestic or Korean vehicle would be to compare the new ones. When you compare new vehicles, then the depreciation factor doesn’t hurt the buyer of the more allegedly reliable vehicle.
just my personal opinion, so take it with a grain of salt…
AVOID ford motor company products like the plague, ford/lincoln/mercury definitely avoid, Mazda and Volvo are on my probationary list, as they are owned by ford, and the ford leprosy virus could affect them…
yes, i’ve been burned by ford products in the past, and i’m hesitant to trust them
on the flipside all my chrysler vehicles have been bulletproof, extremely reliable, they’ve never let me down…
i’ve had good luck with the major Japanese makes (Toyota/Honda/Nissan)
I’d definitely prefer to buy private vs. dealer as I realize that could save me hundreds if not thousands. Unfortunately, I don’t know where private sellars are likely to advertise. I use the classifieds and sites such as autotrader and craigslist. And yes, I even checked e-bay. There just aren’t a lot of used civics/corollas on the market.
Within 2 hours of me are 3 cities of decent size (> 100k people), but beyond that I’d need to drive 5 hours to get to the next one or 9 hours to the one after that.
I considered a rental company car, but I figured those were so beatup in the first year that they were hardly worth it. Anyone have any other experiences with rental cars purchases?
My experience would be the opposite; I’ve had a 91 Mustang GT that I sold with 150,000+ on it and it still looked like a new car, a 98 Explorer that I sold simply because it was too big and inefficent for me, and I currently own a 98 V6 Contour with 155,000 miles, 91 Mustang GT with 80,000 miles, and 95 F-150 with 110,000 miles. All have been excellent vehicles and I got all 3 of my current 3 vehicles for about the price of a decent new car.
I take care of my vehicles with regular oil changes and I drive them smoothly. The worst problem I’ve had is my Contour needed a fuel pump and alternator this year, but with 155,000 miles they’re about due. The F-150 had a dirty battery cable and that’s about it. The Mustang GT has been perfect.
But regardless, I will say that the Japanese vehicles seem to be the most consistently reliable for the most people.
In Cincinnati, we have used car books next to the newspaper stands outside of grocery stores. We also have thousands of cars listed in the Saturday paper. I have no idea why but Saturday gets a lot more hits than Sunday.
Our major newspapers also have classified ads avail online, complete with a search engine.
