Why Buying a Used Car Might Be an Excellent Idea

Posted on 17. Nov, 2006 by in Saving & Investing

I’ve been trying to purchase a “new” car for a few weeks now. My wife and I have been sharing a single car for a few months now, but our conflicting schedules are beginning to cause problems – prompting the need for a second car. However, I’ve been having a very tough time shopping for a car.

My biggest problem is letting go of so much money. I I’ve been trying to pay off my student loan fairly aggressively lately and can’t really afford the monthly car payment – even on a decent used car – but I do need a car. So after a few weeks of debating with myself on what type of car to buy, I’ve decided on a route that many people may not think of, but may be a perfect choice for others in my situation. So what have I decided to do? Well, the picture below should give you an idea…

Cheap Car

That’s right… I’ve decided to get the best car that I can for under $1,500. Some of you might be laughing, some of you may think I’m a complete idiot, but here’s some of the reasoning behind my decision.

  1. It’s Just Plain Cheap – The first reason is obvious. Instead of making car payments of $200 each month for 3-6 years – of which a significant portion is interest – I will be paying cash that I have saved for the past two months. Yes, I realize that the car won’t last me more than two years or so, but the car only needs to get me to and from work… that’s it. And, just to make some of you feel better, I’m making sure that the car I’m buying is recently registered and has passed a smog test within the last 90 days. I’m also having my mechanic friend take a look at the car before I hand over the cash.
  2. Insurance Savings – If you thought that the car I’m looking to buy is cheap, you should see the insurance payments on a car that’s 15 years old. I mean, who’s going to worry about a 1990 Civic being stolen?
  3. Do-it-Yourself Maintenance – Although I’m no brilliant mechanic, I can do most small jobs with the help of a car guide. By buying a 15 year old car I won’t need to worry about computer systems and most replacement parts are significantly cheaper than newer cars.
  4. Great Resale Value – There are two options when I’m finally in a position to buy a newer car. I can either resell the car for about the same price (there’s not a huge resale difference between 100k and 150k miles) or give away the car to charity and take the tax deduction.

So there you have it… my brilliant idea for saving myself approximately $3,300 over the next two years. Any other suggestions for buying a dirt-cheap used car? Or maybe stories of your own involving used cars off Criagslist? Let us know…

6 Responses to “Why Buying a Used Car Might Be an Excellent Idea”

  1. Harrison

    19. Nov, 2006

    I also a used car buyer! I usually buy car within 1-2 years older than the current model. Because I know that the value of a new car will drop around 30% once you drive back to your home. So I prefer to let someone else cover this losses for me. Am I sound bloddy-minded? Hehe.

    This is because of the difference of financial literacy level. Don’t you think so, Jason?

  2. Jason Guthrie

    19. Nov, 2006

    This is a comment.

  3. jansenkoe

    20. Nov, 2006

    Dear sir i want to say some words of your blogs
    your blogs is very nice-
    http://www.cityfly.net

  4. Rich

    01. Dec, 2006

    Buying used vehicle vs. new makes a lot of sense for those on a tight budget.
    You will not lose a lot of money in depreciation, you may be able to come up with cash and not lose money on intrest, or on newer used cars there may still be some factory warranty remaining.
    In any case, it is very wise to have a mechanic look the vechicle over, it can save you a lot of money and misery in the future.
    If you don’t know a “good/trusted” mechanic, you might want to check out my website, http://www.mymechanicfriend.com, it is just about ready to go online. Just a couple of bugs to work out as of this morning.
    I’m offering a workbook/inspection guide to assist you (the layman) in inspecting a used vechicle yourself and identify a lemmon before you take it home.
    If you purchase my book or not, be careful when buying that used car and good luck.

    Rich

  5. Rich

    01. Dec, 2006

    Buying a used vehicle vs a new one makes sense in many ways. You don’t lose money on deprecation, or if you are able to pay cash you don’t lose on intrest.If it’s a newer used car, there might be some factory warranty remaining. It is a very good idea to have the car inspected by a TRUSTED mechanic, the money he might charge you will be very well spent. Buying a used car can be very risky and expensive in the long run. Beware of some people trying to sell you there headaches. If you don’t know a GOOD mechanic, check out my website, http://www.mymechanicfriend.com, I’m offering a workbook/inspection guide to help the average person systematically inspect a used vehicle and avoid taking home a lemon. It’s a new site and I have a bug or two to work out but it should be up today. Buy my book or not, please visit my site and make comments or suggestions. In any case, good luck with your used car purchase.

  6. Nathan

    28. Jan, 2007

    Well, here’s my experience. I bought a 1994 Mitsubishi Eclipse with 118k miles on it about 4 years ago. It now has 157k miles on it. My friend sold it to me for $500, so I didn’t have much trouble paying it off. Aside from basic maintenance, it hasn’t given me much trouble except for looking bad. (the paint is in a similar condition as the car in the picture) It even still gets great mileage (30 mpg city, 40 mpg hwy)

    PS – I got a noticable boost in performance and mileage after I replaced the spark plugs. Your car guide should give you a good indication of what a burned-up plug looks like when it needs replacing.

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