Cheap Used Cars: How to Get the Best Price

March 1, 2013

Cheap used cars don't necessarily require compromise if you research prices properly and have the right checklist of questions to ask the seller.

Finding cheap used cars for sale can be a tricky endeavor, especially if you don't have a lot of experience. But if you have a good game plan and approach the process in an intelligent manner, it can become an excellent opportunity to get a great deal on a quality vehicle. Don't let the used car horror stories frighten you away from getting a previously owned car - with the right tools, anyone can find one within their budget. Here are a few tips on how to get a good deal when you are buying a used car.

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Research Cheap Used Cars

Any time a driver wants to get a decent deal on a used vehicle, they need to be prepared to ask some tough questions, especially if they are looking at relatively cheap used cars. Cheap used cars are not always a bargain, and some potential deal-breakers often lurk in the background. Here are some good starting points for interviewing about vehicle history that will safeguard your investment in a used car or truck.

  1. Why are you selling this car? In a private party sale, this will sometimes give clues as to what the seller would be willing to settle for.
  2. How many owners has this vehicle had? The best case scenario is a single owner vehicle, since these cars have the best chance of being properly maintained.
  3. Do you have the service records? Either a dealer or a seller should be able to provide some service records for the vehicle, at least for major repairs.
  4. What kind of oil and gas does this vehicle use? Asking about the oil helps get information on how the car has been maintained. The same is true for asking about the type of gasoline used. Most car owners will use the simple unleaded gasoline, unless they are driving specialty or luxury cars.
  5. What is this vehicle's MPG? Asking about miles per gallon is one way to gauge how much the seller knows about the car. The figure can also come in handy in evaluating the car for any potential business or personal use.
  6. Does this vehicle have a salvage title? This question addresses the history of a vehicle, where some cars and trucks are marked with a "salvage" status on the paper title. If they have previously been involved in an accident and written off by an insurance company prior to repair. Asking about the salvage title is one way to verify that the car has a clean history. Buyers will also want to make sure the seller has access to the title, and that the document is in good shape to avoid problems later at the state DMV.
  7. Can I get this car inspected by my mechanic? Buyers often ask to be able to have the cars inspected professionally before purchase. If a seller denies this request, it's usually not a good sign

In addition to these basic questions, buyers should also ask about any funny sounds or conditions they noticed during a test drive of the vehicle. A thorough, visual inspection can reveal some hidden damage. Buyers will also want to check out all the features of a vehicle (sound system, air conditioning, power locks and windows, power seat recliners, etc.) to make sure they are in working condition. This is extremely important. Once the deal is signed, all of the conditions of a car are the responsibility of the new owner.

3 Tips to Buy Cheap Used Cars Online

The Internet is an excellent way to find some good deals. It's great for selling items because there is no overhead involved. When you go to a car dealership, they need to markup their cars to pay for their location, rent, their employees, utilities, the list goes on. When you are dealing online, there is really no overhead involved. This leads to cheaper prices on used cars and more savings for you, the buyer. Here are some tips when buying online, as well as a site to actually purchase from.

  1. Research is important when buying used cars. You don't want to buy a car that is known to break down after a certain amount of years, or those that will be expensive to maintain. One website that you can use to obtain information on used cars is CarsDirect. CarsDirect has a vast amount of articles on all topics pertaining to used cars. There are tons of tips about certain cars that can help sway decisions.
  2. Not only does CarsDirect offer information for research, it can also let you know of some places to buy used cars. Directly on the site, you can enter your zip code and listings for used cars in your area will show up. You can make it more specific and enter details you want such as year, price, make, model, and other variables. Sorting by price for a certain model can show you the cheapest sale out there for that given car. This will enable you to get the best price. See what cheap cars you can get near you here.
  3. Another cheap used car website is eBay Motors. eBay Motors is an excellent source to find used cars at great deals. eBay has two types of sellers and those are private sellers looking to sell their cars, as well as dealerships who put their inventory online. The absolute best way to get a great deal on eBay motors is to find an auction listing. Many people choose buy it now listings so they can get their price, but auction listings typically sell lower than buy it now listings. Some keys to look for in auctions are the ending date, as well as the time. Poor ending dates such as the mid-week, during the middle of the day or the morning are telltale signs that an auction will sell for cheap. Finding these listings can get you a great deal on an used car online.

Since there are a lot of private sellers who are looking to unload their cars for different reasons, this means there are deals to be had. Dealers will still try to get what they normally earn, so you may not get the best price there. An added benefit of dealing on eBay Motors is that they offer free history checks on the car. Also, they offer $50,000 worth of protection in the event of a bad transaction. Overall, eBay Motors is one of the best spots to buy cheap used cars online.

Cheap Can Have Different Meanings
When shopping for cheap used cars, it is essential to maintain realistic expectations about what you may find and eventually purchase. While some used cars might offer a low acquisition cost (the purchase price), you must also consider total ownership costs (the price of towing, repairs, proper maintenance, insurance, etc.). What follows is a general guide to help you avoid getting burned in the search for cheap used cars.

There are two general varieties of cheap used cars: 1) a car that is priced relatively cheaper than others of the exact same model/year; 2) a car that is cheaper in comparison to all used cars in general.

In example #1, a buyer considers 2 used 1999 BMW 328s with the same equipment level and mileage--but one is priced at $7000 and the other is listed at $4500. At first glance, the second BMW appears cheaper, because it costs $2500 less to purchase.

In example #2, a buyer discovers a discount used car lot where all cars sell for $1500 or less, regardless of the model or year. In this case, the acquisition cost would be relatively cheap, but it may not represent a good overall value.

How to Keep Realistic Expectations
If you find a car that is priced much lower than others of the exact same model/year, then you should investigate why the acquisition cost is so low. If signs of abuse or neglect (or evidence of prior structural damage) are discovered upon inspection, then you should expect the overall ownership costs to be much higher than those for the same model that is in good/excellent condition. For example, if the $4500 BMW needs a new clutch, then those repair costs could negate the $2500 price discount shown in the above example.

If you shop in the bottom end of the used-car market, where models are often priced at $1500 or less, then you should reasonably expect repair costs to quickly match or exceed the low acquisition cost. Most of these cars are sold without any warranty protection whatsoever, making it VERY easy to get burned. In fact, most reputable car dealers don't sell cars this "cheap," because they usually aren't worth the headaches.

How to Select a Good, Cheap Used Car

  • Understand the true market value of a particular model/year of used car (visit Kelly Blue Book or, to identify those that might be priced "too good to be true."
  • Before making an offer to purchase, obtain the 17-digit VIN number from the car being considered and then order a vehicle history report).
  • Always have the car inspected by an independent, licensed mechanic (away from the dealer/owner premises), before making an offer to purchase. This inspection should uncover lurking repair and maintenance costs, as well as signs of prior damage or abuse.
  • Add the acquisition cost together with the expected ownership costs, to determine beforehand if you can really afford a "cheap" used car.
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Should You Even Consider Very Cheap Used Cars?

Buying very cheap used cars can be a good idea, but only if you know what you're getting into. There are tons of really cheap vehicles for sale, online, by private owners and even at dealer lots. Buying one of these vehicles carries a fair amount of risk so it is important to make sure you understand all the ramifications and possible problems you could run into. Here are a few quick tips.

  • Problem cars. A really cheap car, one that cost less than $1,000, may seem like a good deal but more than likely you will be buying a car that has its fair share of problems. If you are handy with cars and don't mind fixing problems, these cars can be a great value. Project cars often end up in this category as well. If the idea of taking a cheap junker and restoring it to its former glory appeals to you, then a cheap car is just right for you. If on the other hand you have to have a mechanic refill your windshield wiper fluid, you are probably better off in a new car.
  • Cheap transportation. If you're just using the vehicle for a short commute to work, these cars can be a bit of a bargain. Cheap vehicles will be inexpensive to insure due to their age and condition. It is only necessary to carry liability insurance. There is no need to carry collision or comprehensive, as the vehicle is probably worth less than the premiums would cost. Cheap cars tend to be cheap to title and license as well. If you're only putting a few miles on it per day, there is a good chance that the car will continue running for a long time.
  • Car safety. Keep in mind that a cheap car is more than likely going to be less safe. It is probably fairly old, and may lack air bags or other common safety features. There is also a good possibility there will be breakdowns. Its probably a good idea to keep kids and young drivers away from these vehicles.
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Negotiating for a Cheap Used Car
If everything is going well after your test drive, it's time to negotiate. The values of used cars vary wildly, but you can get a good idea of market conditions based on the trade-in and retail values of used vehicles. You should expect to pay somewhere between these two figures. If you find that a cheap used car you are considering has a salvage or rebuilt title, you should negotiate to pay even less than you were expecting to. A salvage title has a negative impact on the value of a used vehicle.

In the end, once you find a reliable and cheap used car and complete the transaction, you can begin to save money to make any necessary repairs or upgrade your vehicle. If you pay cash for your cheap used car you can begin to save a small amount each month to take the place of your car payment. You can use this small amount to provide a rainy day fund in the event that your vehicle requires repairs.

Search for Older Vehicles
Generally speaking, the value of a car decreases with each year that passes. Unless a classic car is being considered, shopping for older used vehicles will allow consumers to spend less on the car. It is true that the general recommendation is to search for a used vehicle that is only two or three years old. However, expanding the search criteria to include cars up to 10 years old will greatly increase the available options and will greatly decrease the sales prices of those options.

Search for Higher Mileage Vehicles
Quite often, higher mileage vehicles tend to be older vehicles. However, many people drive a significantly greater amount than the average 15,000 miles per year. Whether for work or play, these drivers tend to accumulate many miles on a relatively new vehicle, only to trade it in after a couple of years and buy another new car. When these high-mileage vehicles are resold, they are priced much less than their lower-mileage counterparts. Additionally, it is a good bet that a newer vehicle with high mileage accumulated the majority of those miles on the freeway, which is much easier on the vehicle's mechanical components than city stop-and-go traffic.

Search for Vehicles with a Questionable Vehicle History Report
A key component of any used vehicle purchase is the vehicle history report. This report includes key happenings in a specific vehicle's history, including the number of previous owners, any past accidents and most major repair work. The majority of used cars have a clean vehicle history report. However, any number of events in a car's past can alter its title so it's no longer considered "clear." Cars that have salvaged or rebuilt titles typically cost less than similar vehicles with a clear title. Additionally, occurrences such as accidents, hail damage, storm damage or anything that would make the vehicle "less than perfect" also contribute to a lower asking price.

Search for Unpopular or Out of Favor Vehicles
Many times, a vehicle's sales price reflects the current viewpoints of both the auto market and the buying public. For example, vehicles that are currently popular in the industry (such as hybrid cars) have less room for price negotiation than ones that are out of favor (such as large SUVs). Additionally, many vehicles have been introduced throughout history that simply don't strike a chord with consumers (such as the Pontiac Aztek). Sellers often sit on these types of vehicles for much longer than those that are in favor. As such, consumers can make low-ball offers that sellers are more likely to accept simply to get rid of the vehicle.