What to Look for When You Only Have Enough Cash to Buy a Clunker


You have 5K, now what?

used car rusted

Here at Quoted, we think a lot about car buying and selling—how to pay for them, how to make sure you’re getting the best deal, and even what paperwork you need, but sometimes when you’re in the market for a new (or new-to-you) vehicle, your situation or budget narrows your options to what a less generous person might label a clunker. But don’t fear—great cars can still be had for bargain prices. Below, we’ve asked the experts how best to navigate shopping for a vehicle on a tight budget, without sacrificing safety and reliability.

Can a Safe, Reliable Vehicle Really be had for Under 5K?

Short answer: yes, with the big attached asterisk that you must be a careful and thorough shopper. Details below, but first, some cautionary tales:

Sally Elizabeth from PeopleClaim.com told Quoted about two clients who bought used cars on a budget that turned out to be salvaged cars—unbeknownst to them until after the purchase.

Case One:
The car buyer, we’ll call her Mary, unwittingly purchased a car whose frame was split, and therefore uninsurable. Mary’s mechanic (who she had look at the car after she bought it) showed her the broken frame, crumpled and split rails, the unsupported bumper, and the filler in the body of the car (essentially, Bondo). Even more disconcerting? Mary actually had another car dealership inspect the car two weeks before she bought it. That dealership caught none of the glaring damage, which also included rust. The moral of Mary’s story? If you lack the expertise to inspect a used car yourself before purchase, find a mechanic you can trust and always—always—have them thoroughly examine the car before you buy.

Finding a good, cheap car is possible but it requires thorough research.

Case Two:
Our second victim, we’ll call him Jim, bought a used vehicle through his credit union. When Jim got the car home and had it inspected, the mechanic told him the VIN on the body and the motor didn’t match. The lot where Jim purchased his lemon presented him with a clean CARFAX report (obviously forged) and “promised there were no problems with the car,” (here—though we do feel terribly for Jim—we are thinking, Jim probably should’ve known better than this). Jim actually contacted the Federal Trade Commission because his salvaged car was sold as clean, which of course is highly illegal.

Elizabeth told us, “We’d strongly advise that consumers are particularly cautious about Buy Here, Pay Here dealers and that they read all complaints about any dealers they’re considering buying from—and any published responses. There are always two sides to a story; it’s intelligent to read both and make up your own mind.”

Senior Woman opens the trunk of the car

How to Actually Find a Good Vehicle on a Tight Budget

Now that we’ve—through vivid, frightening description—reiterated the importance of hiring an outside mechanic, running your own checks, and thoroughly researching all vehicles yourself, we can get into the details about how, exactly, to accomplish this task.

Where to Shop

Despite the wariness some people feel about Ebay and Craigslist, both can actually be good choices for shoppers looking for a vehicle on a budget. Maurice Davis, a criminal defense lawyer, told us, “Between the two, it’s easy to search by price range and model depending on your criteria, and it’s likely you can strike a deal with the seller. However, exercise caution and be wary of scams.” Ali Ahmed, of NowCar also cautioned, “You’re buying from a person, not a dealership, so the vehicle hasn’t necessarily been inspected by the seller—so the buyer may not be aware of some important past information that dealers are required to provide. Dealerships are required to inform the customer if the vehicle has a bad title, has been a rental car, or doesn’t meet emission control standards.”

Kelley Blue Book and Edmunds.com are also great resources. Davis says “Oftentimes these used cars come with expert reviews, pictures and ratings. With information like this, you will likely get a reliable car well worth the price. In addition, you may save money on costly repairs down the road by researching the car.” Both sites can also be used to verify True Market Values as a check to see if the seller is pricing the car fairly.

Auctions, rather than dealership lots, are a great way to get a good deal on a used car.

Ken Bodnar, of Selectbidder, told us something that the average person might not know: “There are used car auctions which are open to the public.” Bodnar says the cars at auction are bank repossessions or trade-ins that dealerships don’t want. The best part: Bodnar says auctions sell cars at wholesale prices, not retail. Bodnar’s auction-buying tips: “Go to the lot a few days before, pick out a car or two, and have a mechanic look them over. Auctions will generally let you do that. It is a great way to get a lot of car for less money than if you bought off a dealership lot or a used car dealer.”

Ken Beckstead seconds Bodnar’s tip about auctions, and says tow yards can be another great resource. Beckstead adds that smaller towns often have more cars than bidders (unlike in big cities where there are usually many people bidding. All you have to do is call tow yards and ask when their next auction takes place.

Finally, Mindy Jensen says, “Tell every single person you know that you are looking for a good, reliable car. You never know who has a friend who is selling theirs.”

old volkswagen

What to Look For

Jensen says, “If your budget is under $5,000, your best bet will be an older, sort of
general model. You won’t get a reliable high-end car for that price, and
you won’t get a newer car for that price.” Jensen says look for cars from the late 1990s and early 2000s.

Dents, dings, and rust are to be expected for a truly inexpensive car.

“When you’re looking for an inexpensive car,” Jensen adds, “the exterior doesn’t really matter. Dents, dings, and rust will be there—that’s part of what makes it so inexpensive. The interior doesn’t really matter, either. In fact,” Jensen says, “you only need to concentrate on the engine. If you aren’t well-versed in car engines, have a good mechanic take a look at it before you buy.”

More specifically, Bodnar lists the following makes as top picks: Subarus, Honda Civics, Dodges with bigger engines, Silverado pickup trucks, and Mazdas.

Why? “These have a fairly large market share, and hence are inexpensive to fix with readily available parts.” As a counter to Jensen, Bodnar says a low mileage older (ten years) luxury car can be a good bet. If they’re still in good shape at this point, you can bet they’ve been treated well, he says. But, narrow your search: Bodnar says either a domestic or European make will be the best bet here.

A few other things to be sure to check: Ahmed advises: “Before purchasing, inspect the car’s tires and test the brakes. These are two of the most costly maintenance items to replace on any car.” Also, says Ahmed, check out fueleconomy.gov to compare annual gas prices across all types of vehicles.

Last, online forums can also be good resources for details about how to choose the best vehicle for your money—like this one at Reddit.

Important Tips When Buying Used

  • Be sure to get your car registered as soon as possible.

Davis cautions: “If not, you could suffer from an array of costly citations and even grand theft as a consequence.”

  • Don’t forget about additional expenses.

Ahmed notes: “When you are buying a car off Craigslist [or Ebay] consider the cost of sales tax, cost of transferring or buying a new tag, and the cost to register the vehicle, not just the price you are paying the buyer. All of these fees and taxes vary by county or state so be sure to check the rates and fees in your area for accurate pricing.”

Financing a Used Car

Even when buying on a tight budget, you don’t need to have a trade-in or to pay for the vehicle outright. Financing is usually available to used car buyers, either from a dealership (if that’s where you purchase) or through private credit unions. Just be aware of all interest rates and fine print (more on that here and, as we’ve previously noted, a good rule of thumb: “Finance used cars for 3 years with about 10 percent down.”