To some people, a good cheap car is one that costs less than $10,000. To others, an inexpensive used car may be one that costs $2000 or less. We'll tell you how and where to find the car you need, at the price you want.
Cheap car tips
Usually, but not always, finding a cheap car means finding an older used car– a second hand car – possibly with high mileage. Unfortunately, the older a car, the greater the possibility for problems and expenses that were not anticipated. Exceptions can be found of course and with a little effort, good "oldies" can be found at bargain prices.
Most used cars are sold "as is" and come with no warranties or guarantees. Therefore, it is important to thoroughly inspect any car you intend to buy, and not take the word of the seller about the car's condition. Also get a CarFax or AutoCheck®
What is a cheap car?
People who want a cheap or inexpensive second hand car typically only think about price. However, other factors also contribute to the cost of owning a car. A cheap car to buy is not necessarily a cheap car to own and operate.
Insurance is one of the most significant costs of car ownership. Gas mileage is important, and so is repair cost. Luxury brands are more expensive to maintain and have higher insurance costs. Small cars usually have lower repair and maintenance costs than larger cars. However small 2-door sports coupes or convertibles with oversized engines are expensive to insure, especially for young drivers.
Choosing the right car can save hundreds of dollars in auto insurance premiums. See our article, Cheap Car Insurance, for tips on finding low cost auto insurance. Learn which cars have the lowest insurance rates.
Where to find cheap cars
Independent dealer lots are the most common place to find inexpensive used cars for low prices. Don't expect to always find the car you want on new-car dealers' used car lots. Most new-car dealers only sell relatively new, more expensive, used cars. One type of independent used-car dealer, "buy-here-pay-here", are a source of cars for people with bad credit but be aware that their vehicles are often overpriced and loan interest rates are very high.
Consignment lots offer cars for sale by individuals who pay the consignment lot owner to display their vehicles. It's like a used car dealer lot except the cars are still owned and priced by individuals. You can find the location of consignment lots in your area in your telephone book yellow pages.
Used car web sites such as UsedCars.com. are an excellent and easy way to search for used cars in your area. You simply plug in your ZIP code and specify the kind of car you want, and you get back a detailed list of local cars and prices. For more information about web sites with cars from private individual sellers, see our article, Best Used Car Web Sites.
eBay Motors sells more used cars online than any other site or car dealer. You can find cars from dealers
Newspaper classifieds often have a "less than $4000" section, or something similar. Used-car dealer ads frequently have a "low-price vehicles" section as well. Watch out for relatively new cars at "too-good-to-be-true" prices. Your local newspaper probably has a web site that contains online cars-for-sale classifieds. Read this article if you'll be buying a car from an individual private party seller.
Local "auto trader" magazines found free at supermarkets and auto parts stores are also a good source of cheap used cars being sold by individuals and dealers. In many cases, dealer advertisers have web sites listed with their ads.
Lease takeover - Get a late model car with the lowest monthly payments and no down payment by taking over someone else's lease. Online companies such as Swapalease.com
Public auto auctions are another place to find inexpensive used cars. There are public wholesale auctions, government auctions, police seized vehicle auctions, repossessed vehicle auctions, unclaimed vehicle auctions, theft-recovered car auctions, and salvage auctions. This is a great way to get good car deals. See the following article: Public Car Auctions.
Brand New Cars - Cheap - Yes, it is very possible to buy brand new cars cheaper than relatively new used cars. The reason? Because car manufacturers are extremely desperate to sell cars in this bad economy. They are offering big rebates and discounts so large that, in many cases, new cars are selling for less than used cars. See this web site for current deals: Best New Car Deals - Incentives and Rebates
Repossessed cars are sold by banks and loan companies at Repo Car Auctions when borrowers' cars are taken back when they can no longer make payments. When the economy is bad, these cars can make good buys because the banks only want to recover what is owed to them. The cars are sold at repo car auctions for wholesale prices, or less.
Government and police seized-car auctions are another kind of auction that is a potential source of good deals on used vehicles. Surplus, seized, or impounded vehicles of all types are auctioned. These may be conducted by a professional auction agency, local police department, a state agency, or a federal organization. This article, Government Seized and Surplus Car Auctions, provides more details. Salvage vehicles are often a good source for cheap cars. Insurance companies auction off cars that have been totaled in accidents or weather disasters. Many of these vehicles have repairable damage and can be inexpensively restored. See the article, Repairable Salvage Vehicles, for more details. eBay Motors is another source of salvage vehicles being auctioned by individuals.
Buying a cheap car
Second hand cars are sold "as-is" which means there are no guarantees, no warranties, and no right to return the car after the sale, even if you find out the seller lied to you about the car's condition. There is no 3-day return right, as is commonly thought, and Lemon Laws don't apply to used cars.
Do not rely on a seller's assurance that his car is in good condition. It might not be. A seller might not be aware of hidden problems or he might "forget" to mention them.
A pre-purchase inspection is very important when buying a used car. A professional inspection might cost $75-$150 but can prevent costly mistakes.
While you wouldn't need to check a relatively new car's engine compression or timing belt, for example, these should be on the "must check" list for an older car. Otherwise, you could be replacing the engine in a short time — at great expense.
Other important items on your inspection checklist should be tires, bearings, brakes, seals, hoses, belts, timing chain, transmission, differential, shocks, radiator, alternator, and fuel injectors (or carburetor). Has the car ever been wrecked and repaired? Are the air bags intact? Has the car been properly maintained and serviced?
Check for oil leaks, oil sludge, rust under the wheel wells, uneven tire wear, windshield chips or cracks, missing parts, signs of having been repainted, and dent repairs. Will the car pass emission and safety inspection required in your state and county?
Test-drive before you buy
You should test-drive any car you are considering buying. Some potentially serious problems will not reveal themselves until the car has been warmed up and driven for a few miles. Listen for unusual sounds. Try to feel for any vibrations, shaking, or steering difficulty. Drive at highway speeds as well as low speeds. Work the brakes.
Just be aware that, when you buy a used car, especially an older one, you may be buying someone else's problems. It's your job to find out what those problems are, and to decide if you want to fix them or live with them — or turn down the deal. Don't accept a seller's offer to fix problems after the sale — it probably won't happen.
Cash or finance?
Most people use a used-car pricing guide to help them determine a fair price to pay. Then it's a matter of the form of payment, which is usually cash or a used-car loan. Even if you buy from an individual private party, you can get a loan from a bank, credit union, or get a person-to-person loan from an online loan company such as Auto Credit Express.
Bad credit?
If you have bad credit, your options are more limited. To get a loan, you'll have to have a co-signer or buy from a dealer who does his own financing.
If you need a used car loan and have no credit, or poor credit, we recommend CarsDirect
For more information about buying a car with bad credit, see the following article: Can I get a auto loan with bad credit?
Another cheap car option - take over a lease
Another way to drive a car inexpensively is to take over (assume) someone else's car lease. This is a way to drive a good reliable used car that is almost new, for a low monthly payment and no down payment – and get cash back in some cases.
You can take advantage of the fact that someone wants out of their lease and is willing to give up their deal to another party who can pick up the payments. Some of the deals are outstanding because the original lessee made a large down payment at the beginning of the lease, which resulted in a low monthly payment. You get the benefit of that low payment, with no down payment. The best place to look for these lease transfer deals is online at Swapalease
Yet another option - drive a free car
You may be able to get paid to drive your own car or receive a free car to drive if you qualify with one of the many companies who "wrap" vehicles as a kind of rolling advertisement billboard. This is the ultimate "cheap" car. See this article for more details - Free Car - Scam or Real Deal?
Do you need car repair insurance?
If you buy a used car with no remaining factory warranty, you should consider buying car repair insurance, otherwise known as extended warranty coveage, which protects you from the high cost of breakdowns, repairs, and parts replacements. See our article, Car Repair Insurance for more details.
How about accident and liability insurance?
Regardless of the cost of your car, you must have auto insurance. It's the law. The absolute best and easiest way to find low car insurance rates is to go to an online insurance broker site such as NetQuote.com. Fill out one form and immediately get multiple rate quotes from insurers who have been matched to your qualifications and requirements for the lowest cost. Their service is free.
Used car questions and answers
We've compiled a set of frequently-asked questions and answers about buying used cars that you might find helpful. Here is the list of questions: Used Car FAQs.
One final word
Be very careful with buying an older used car — a cheap car. Even though there are many good inexpensive second hand cars out there, they are not always easy to find. Furthermore, there are risks that you'll be cheated or buy hidden problems. So take care, please, and spend extra time to make sure you're getting a car and a deal that you'll be happy with.
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