This is the kind of question we see posted on question-and-answer web sites every day. The details might vary but the basic question is always the same.
The askers of the question seem to understand that $3000 (or $1000, or $2500) is not a lot of money for a car and they are asking how to best spend it.
For a car to be priced in the $3000 range, there are a number of potential issues that buyers should be aware of:
1) The car would ordinarily be a $5000 car, but it has problems that will require at least $2000 to fix.
2) The car is fairly priced at $3000 because it is old and has high mileage, which doesn’t mean it’s a bad car, but it has a high potential for having problems.
3) The car is only worth $2000 because it definitely has problems, but the seller is hoping potential buyers won’t notice until after the sale when it’s too late.
The easy answer to the question would be: Don’t buy a car that has problems you can’t live with and can’t afford to fix.
The problem with this answer is that it’s not that easy to know when a car has problems and the nature of those problems.
It’s Not Easy
Some people think if they buy a reliable brand such as Honda or Toyota that they will be safe. Unfortunately, that’s not true because any car, especially those with high mileage, can have problems, regardless of the brand’s reliability reputation. The condition of any used vehicle is dependent on how it has been driven, how it’s been maintained and cared for, and whether it’s been wrecked.
Buyers often rely on a seller’s statement that the car “runs great” and “has no problems” when making a buying decision. This is not smart, especially when used-car sales are usually “as-is” which means the buyer has no recourse if problems are found after the sale, even if the seller lies about the car. Most sellers are honest but may not be aware of hidden problems or parts that on the verge of breaking. Also be aware that most used-car dealers don’t actually inspect the cars they sell. And they don’t guarantee them (Carmax is an exception), although new-car dealers often sell newer “certified” used cars that have been inspected and come with a short warranty.
Discovering a Car’s Problems
You should always test-drive any car you are considering to buy. Drive it on city streets and at higher speeds on highways. Listen for unusual noises and make sure it “feels” right. This will give you a bit of an idea about a car’s condition, but it certainly doesn’t tell you everything you need to know.
The only sure way to know a car’s actual condition is to have it inspected by a professional mechanic before the purchase.
You can get the seller or dealer to allow to you to take the car to a mechanic, or you can use a “mobile” inspection service. Most larger cities have mobile inspection companies which can be found with a Google search or Yellow Pages lookup. eBay Motors recommends a national service called Inspect My Ride (www.inspectmyride.com) for its car buying customers. The inspection will cost about $75-$150, which is a good investment if it prevents you from making a huge expensive mistake.
If you already know about cars and mechanics, you might be able to successfully inspect a car yourself. Here’s a good 50-point inspection checklist. But on older cars with high mileage, this list won’t be sufficient because some of the most serious problems can only be detected by an experienced mechanic’s eyse, ears, and diagnostic instruments.
How Much to Pay?
It is also important to know how much to pay for a used car. Ordinarily, using a car value web site such as Kelley Blue Book (kbb.com) or NADAGuides (nadaguides.com) is a good source of price information. But for older cars with high mileage, the values found in these guides must be taken with a proverbial grain of salt.
Be aware that dealers and sellers always set an “asking” price that is 10%-20% higher than they are willing to sell for. For example, you might be able to get a $4000 (asking price) car for $3500 (selling price). But if a car has serious problems, even a reduced asking price may be too much. It’s no bargain if you buy a car for $3500 and find that you’ll have to pay another $3500 to fix all its problems.
Generally, the more you can afford to pay for a car, the better the car you can get. For more money, you’ll get a newer car with fewer miles and, hopefully, fewer problems. If you only have $3000 now, and you can wait a while longer to save more money, you’ll be rewarded with a better car.
What Car is Best to Buy?
That’s not an easy question to answer if you only have about $3000 to spend. Although Honda and Toyota would be good as first choices, you should be prepared to spend a lot of time looking at car dealers in your area and online at web sites such as Craigslist.com, Autotrader.com, and UsedCars.com. Our article, What Car Should I Buy may give you some better ideas on how to choose the right car.