by Lyle Daly | July 23, 2019
The Ascent is reader-supported: we may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.
If you’re in the market for a used car, then you’ve probably run into some advice that the personal finance crowd throws around regardless of how much you can afford to spend on a car. Buy a beater. Find a used car for about $1,000 to $4,000. You’ll save so much money.
On the surface, this seems like sound advice. Plenty of car shoppers are on tight budgets, and even those who aren’t may still want to limit how much they spend. But going the cheap route on a used car can end up costing you far more later, and you could be happier if you spend more to get a better car.
Get free access to the select products we use to help us conquer our money goals. These fully-vetted picks could be the solution to help increase your credit score, to invest more profitably, to build an emergency fund, and much more.
By submitting your email address, you consent to us sending you money tips along with products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Statement and Terms & Conditions.
The problem with the recommendation to buy a cheap, reliable used car is that it leaves out the most important part -- where you can find these cars in the first place.
While there are cheap used cars that run well, there are many more with potentially serious problems, such as transmission issues, heavy rust, a worn-out suspension, or body damage. If nothing else, most will have quite a bit of mileage already, and as mileage increases, so do maintenance costs.
You’ll be looking for a hidden gem, which usually means sorting through a lot of junk first. There’s no guarantee you’ll find a car that meets your standards, and even if you do, it could take quite a bit of time to find it.
Looking for a personal loan but don't know where to start? The Ascent's picks of the best personal loans help you demystify the offers out there so you can pick the best one for your needs.
You’ll also need to take any cars you’re seriously considering to a mechanic to get them checked out, and an inspection like that typically costs about $100 to $200. Those inspection costs can add up quickly.
If you want to find a reliable used car without feeling like you’re searching for a needle in a haystack, then $5,000 to $8,000 is a good price range.
At that range, you should have a solid selection of cars without any major issues. Here are a few things to look for that will help you figure out which cars are worth seeing in person:
Unless you’re knowledgeable enough about cars to inspect a used car on your own, you should also take any car you’re seriously considering to a mechanic for a thorough inspection.
Another good option, if you can afford to spend more, is a certified pre-owned (CPO) car. These cars go through a multipoint inspection, include a vehicle history report, and often have a warranty. CPO cars are often available in the $8,000 to $12,000 range, and while they’re more expensive, you can shop with more confidence knowing you’ll be getting a reliable car.
While it’s great if you can pay for a used car in full up front, that doesn’t mean it’s the only option you should consider. If you don’t have much money saved and you need a car immediately, then you may be better off financing a more reliable car instead of buying a cheap car that barely runs.
Here are a few different ways you could finance your used car purchase:
Want to pay off debt faster? Check out our shortlist of the best personal loans for debt consolidation and cut your monthly payment with a lower rate.
No matter which option you choose, you should still put down as much money as you can up front. This will keep your debt to a minimum and allow you to pay off your car more quickly.
There are certainly some diamonds in the rough out there on the used car marketplace, and if you luck out, you might find that elusive car that’s both cheap and reliable.
Just remain open to spending more, even if you need to secure financing for it. You’ll be able to find a car you like without spending weeks or more on a protracted search, it will likely have more advanced safety features, and you could save on maintenance costs in the years to come.
The Ascent team vetted the market to bring you a shortlist of the best personal loan providers. Whether you're looking to pay off debt faster by slashing your interest rate or needing some extra money to tackle a big purchase, these best-in-class picks can help you reach your financial goals. Click here to get the full rundown on The Ascent's top picks.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2021 The Ascent. All rights reserved.