Buying a Used Car for Under $2,500
How to Shop the Automotive Bargain Basement
Sometimes life isn't fair. Your heart says 2011 Maserati GranTurismo, but your budget says 1999 Mazda 626. Rather than rail against the injustice of only having about $2,500 to work with, refocus yourself and enjoy the thrill of the hunt.
Here in the bottom of the car-buying market, you'll encounter unique questions and problems. This article will help you navigate this territory, anticipate challenges that may come your way and ultimately help you find a used car that will fit your price and needs.
Set Your Expectations
In this price range, you can't expect the car to be perfect. The vehicles you come across will most likely be 10 to 15 years old and have high mileage, some mechanical issues, some cosmetic scratches and even some bodywork dents. It's common to see vehicles with more than 100,000 miles on the odometer. But as long as the vehicle has been reasonably maintained, all this shouldn't be too much of an issue.
Locate the Vehicle
You can look for vehicles in this price range at public auctions, independent used-car lots and private-party sellers. There are some hidden gems to be found at auctions, but the process requires quick decision-making and buyers are not usually allowed to test-drive the cars. An independent dealership might be more convenient, but it also might not be as willing to come down in price. That's why private sellers are your best bet.
Private party vehicles can be found online on a number of Web sites. Searching online allows you to cover the most ground and narrow down your search by price. A few good sites to look at are Autotrader, Craigslist and the classified car ads on eBay Motors.
Check the Car's Condition
Condition is the most important factor to consider when you're shopping for an inexpensive car. You can learn about the car's condition through an inspection and a vehicle history report. Both of these things will tap your already tight budget, but investing in these checks will greatly increase your chances of finding a vehicle in good condition.
First, bring a mechanic with you when you're looking seriously at a used car. You can either pay your local mechanic to go on the visit, or hire a vehicle inspection service. If the mechanic or inspector identifies problems with the car, ask for an estimate of how much it would cost to get it in working order. Also ask your mechanic or inspector to point out other problems that you might need to fix in the immediate future. Sometimes that less expensive car can end up being costly if it needs substantial repairs.
You should also get a vehicle history report for any car that interests you. The report will help you spot trouble, maybe an odometer that's been tampered with or a car that's been in an accident, for example. Vehicle history reports can range from $30 to $60, depending on how many reports you need to run. If you shop for cars on the eBay classifieds site, you can get vehicle history reports for free.
Beware of Red Flags
As you shop, you will occasionally run into some problem areas. Here are the big ones:
Suspiciously low mileage: If the mileage seems too low for the age of the car, it could mean that someone has rolled back the odometer. A less malicious explanation might be that the car's owner hardly drove it. A good rule of thumb is to assume that a car has been driven about 15,000 miles per year. If an older car's mileage comes in lower than that, ask more questions about its use.
Salvage titles: If the vehicle history report or the car's description on the title documents says "salvage title," you need to be prepared to probe the vehicle's roadworthiness some more. A salvage title means that an insurance company has declared the car a total loss and a body shop has since repaired it. This doesn't mean that you should automatically strike the car off your list. If it has been driven for a number of miles since the salvage title was issued, you may still want to consider it. However, you must be aware that the salvage title affects the resale value. Of course, if you intend to drive the car until the wheels fall off, resale value might not be an issue for you.
Environmental damage: Keep an eye out for signs of snow and water damage. A flood damaged car may have electrical problems down the line. In addition to looking for obvious signs of water damage, a vehicle history report will probably tell you if the car has been damaged in a flood.
Similarly, a car that's been driven in a snowy area where road salt was used could have suffered rust damage. Take a look under the car for are any signs of that. A vehicle history report helps here, too. It can tell you whether the car spent a significant part of its time in a snowy state.
Don't be afraid to ask the seller plenty of questions. Ask how long the owner has had the car. Has it been in an accident? Does it need any repairs? Why is he selling it? Does he have the title? Is the car currently registered? Coupled with an inspection and history check, the seller's answers will give you a better idea about how well he took care of the car.
Just because you are getting a car on the cheap doesn't mean you can't negotiate. In this price range, assume that the seller has priced the vehicle a couple of hundred dollars above what he really wants for it. With that in mind, it doesn't hurt to look at cars that are $1,500 or so above your price range. You might be able to bring the price down if the seller is willing to negotiate. And if the car needs repairs, you can use this fact to negotiate a lower price. You can probe a seller's willingness to negotiate on the phone by asking if he's flexible on price. But don't commit to anything without having first looked at the car.
Winding up the Sale
When you close the deal on a used car, make sure the seller signs over the title when you hand over the money. Make sure the seller's name, the car's year, make, model and VIN number match the information on the title. Take the title to your state's department of motor vehicles as soon as possible. The car isn't officially yours until the paperwork has been filed.
Now take a minute to congratulate yourself. Even if it's not the car you've always wanted, it will get you where you need to go. And you didn't blow your budget to get it. Now you can start saving up for your dream machine.