Question of the Day: Is It A Good Idea To Buy A Used Car That Is Only Worth $5,000?
Question: Is it a good idea to buy a used car that is only worth at least $5,000?
It depends on what type of car you’re looking for—as an old adage says, “there’s nothing more expensive than a cheap German car.” (Or British. Or Italian.)
So an equally important question to ask is, how much of a repair budget do you have for a used car? If the answer is little more than an oil change or tune-up, that’d rule out an old Maserati Quattroporte fitting for an ‘80s action hero villain, or some other thoroughly depreciated maintenance deathtrap. What needs do you have with the car? Will you have a long commute, or need to haul a lot of passengers/cargo?
If you just want a reliable, reasonably efficient beater, then there are plenty of reasonable options even in the $2000-$3000 range, like late ‘90s Corollas or Camrys, or a sixth-generation Honda Civic. Reliable works trucks can be had for $5000, like a Chevrolet Silverado/GMC Sierra or a Toyota Tundra from the 2000s. But whatever your preference, here are some general used-car shopping tips:
Shop not by brand, but by specific model and powertrain. Don’t fall into the trap believing that anything by a certain automaker will be reliable. Honda Accord’s for example ran into a spat of faulty automatic transmissions in the mid 2000s. Subarus with a 2.5-liter engine from around 1996-98 had head gaskets prone to failure after 150,000 miles, a fix that potentially costs thousands to fix if it wasn’t done properly before. A late ‘90s BMW 3 Series may be tempting at around $5000, but the cooling system tends to be a weak spot for most Bimmers during that decade, so be prepared to open the wallet for deferred maintenance.
Research for possible weak links. Most cars will run like a top when properly maintained, but what is “proper” varies significantly especially when dealing with a used luxury or performance car. And then some cars just can’t work reliably by design, like ‘90s Range Rovers and their notoriously fickle Lucas electrical systems. Car forums have a wealth of information, but it takes some digging and potentially putting up with snarky posters. Consumer Reports and its ratings are a great starting point, but there are other useful resources, such as tradeinqualityindex.com, which has analysis charts of defects, categorized by model and body style.
An example of a reliability chart from tradeinqualityindex.com
Get a pre-purchase inspection. Somehow even upstanding citizens can transform into shifty salesmen when off-loading their car, and “runs strong” in a Craigslist ad could still mean the engine’s about to throw a rod. Don’t take anyone’s word of the AC just “needing a recharge” either—take the car you’re interested in to the mechanic for a pre-purchase inspection. Sure it’ll cost $100-150, but finding out about a broken compressor or an engine weeping oil can save you a lot of heartache in the long run. Plus, you can leverage that information to negotiate a lower price. Also, find a well-reputed mechanic for the inspection–not the buyer’s mechanic buddy who conveniently finds no fault with the machine.
Low mileage doesn’t always mean low drama. Just as important as the mileage is the car’s maintenance history. Are there detailed maintenance records, and how meticulous was the owner in addressing issues? If there have been more Olympic games than oil changes for years on end, even a 120,000-mile car could be overdue for an expensive tune-up. Look for owners with an attention for detail, who address secondary issues like worn suspension bushings.
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