You’re in the market for a used car, but just not any vehicle. Specifically, you’re hemmed in by budget restrictions and can spend no more than $5,000, perhaps much less. The reality of the used car market is that even clunkers can cost a few thousand dollars and that’s exactly the type of vehicle you want to avoid. However, with patience, careful research and keen negotiation skills, you can find a used car for under $5,000. Here’s how to do it.
Manage Your Expectations
You might have a certain make and model in mind when shopping for a reliable, low-cost used car, but your expectations should align with market realities. And those realities will be confirmed when you shop for a car, study the online ads and research the car valuation sites.
First, you should know that car values fluctuate. Indeed, in times when gas prices are high, values of economical cars rise, while those for large sedans, SUVs and pickup trucks drop. Conversely, the opposite happens when fuel prices are low.
Second, the more particular you are about a brand, especially premium or luxury brands, the more costly a vehicle will be. You may have your eyes set on a BMW, but even a 15-year-old 5 Series will cost you. The reliability of an older vehicle becomes an issue, and acquiring parts for some foreign models can be costly.
Technology Is a State of Mind
Very few cars that are less than 10 years old can be had for $5,000. Some compact models or high-mileage vehicles that may have been used for livery purposes may fall within that range. The greater number of lower cost vehicles will be within the 11- to 15-year-old range.
That also means the technologies found in today’s cars may not be present. And not just navigation, a rearview camera or heated seats. Older vehicles typically lack what we consider the basics, including a USB port and Bluetooth.
What technologies a low-cost car does have will likely reflect the time it was built. If you want something more, you may be able to upgrade after the fact at an additional price.
Private Parties Offer Better Deals
Simply put, purchasing a used car for under $5,000 offers better choices when you buy directly from an owner. Private party deals don’t have the overhead that comes with purchasing a car found on a dealer’s lot. Moreover, you can obtain vehicle information directly from the owner.
Sure, much of that information can be found in a CARFAX Vehicle History Report, but not if the owner performed his own maintenance and repairs. Also, you may find that you have more room to negotiate with a private party. As for not getting a warranty, that’s a risk you may have to take to afford the car you want.
Visit Your Local Mechanic
If you use the services of a garage, pay your mechanic a visit. Chances are he knows of a customer ready to sell a car he has serviced. Furthermore, one or more vehicles may be sitting on his lot with a for sale sign on it.
The advantage of meeting with your mechanic is that you know him and he knows the car he has serviced. He can tell you what problems the car has had and what maintenance may be outstanding. You will want to have the vehicle professionally evaluated anyway, so rely on this mechanic to give you the inside story on a used car that interests you.
If You’re Handy, That’s Dandy
People with a flair for fixing cars certainly have an edge when it comes to buying vehicles for under $5,000. As long as the frame isn’t bent, the engine and transmission are in good shape, and the suspension and exhaust systems are in working order, then you have a car that you can work on and possibly keep for many years.
This also means that you may have more room to negotiate for a car that has some problems if the owner hasn’t discounted the vehicle accordingly. With about $1,000 in maintenance and repairs pending, that $4,500 asking price can be adjusted downward. Explain to the owner that the repairs will need to be made and ask him for a price reduction. At the very least you may be able to meet half way or better.
The Art of Negotiation
You don’t have to be Mr. Handyman to negotiate a deal on a used car. The handy person has the advantage of avoiding labor costs and procuring discount parts when fixing his own car. However, any deal can be negotiated as long as you operate from a position of strength. And that comes from providing a vehicle’s book value to a reluctant seller, especially if the car is overpriced.
What this means to you is that you may have some room to consider vehicles that are priced above $5,000. If you find one that is just outside of your budget, you can begin your negotiation by offering a lower, but still competitive price. Be careful not to insult the seller or you may lose your leverage. At the same time if you present documentation that the car should be priced less, then do so. You might point out a few of the flaws and explain that you’ll need to take care of them.
A Matter of Time
It may take some time to find a car that meets your budget. When you find one that interests you, carefully inspect the vehicle, ask insightful questions of the owner, obtain your CARFAX report and have the car inspected by a mechanic. Complete your negotiation and drive away in your vehicle.