best used car budget, to save the most in the long term?
November 29, 2011 8:08 PM   Subscribe

What is the best used car budget, if I want to save the most in the long term?

I understand that I could spend $2500 on a cheap car, but spend more each year to maintain it, and need to buy another car sooner. Or I could spend $10,000 on a newer used car, and not have to worry about repairs for a few years.

The question is, which would cost the least in the long term? Over 5 years? Over 10 years? I've set my budget at $10,000 max. (Any car I get I will most likely drive until it dies.)

I'm looking at the overall cost of:

- upfront price
- frequency of maintanance
- cost per repair/servicing
- fuel economy
- cost of insurance

Other details:

I have a family friend who shops the auctions and can get me a good deal on any make/model I ask for, or will find me a good car based on my budget. He'll be honest with me and he'll make sure any major elements of the machinery are in good condition.

I'm very well connected in the small business community so I know I can ask around to find a trust-worthy mechanic. I'm a 22 year old girl but I think my connections will make up for that. Also, I live in Guelph, ON.

This is what I need in a car:

-Overall afforability
-Small but spacious (I'd like to lug a 4 foot table and equipment for the occasional craft show, go skiing, etc.)
-Good safety ratings
-I will be using it for both city and highway driving

Any suggestions of makes/models/years to look at?

In terms of financing - I have $15,000 saved, so I could pay cash, but I want to buy a house in the next 2 - 3 years if I can afford it. So that's why I'd like to spend as little as possible on the car.

Thanks everyone!
posted by Jade_bug to Shopping (9 answers total) 5 users marked this as a favorite
I would recommend the small hatchbacks, such as Honda Fit, Kia, etc. Avoid Chevy. Large storage capacity, reliable.

The CAA will do a review of any car and give you a complete report. CAA Member Price: $129.95
Non-Member Price: $149.95. That will be a thorough overview. A mechanic/friend might do so as well.
posted by blob at 8:26 PM on November 29, 2011

Consumer Reports says these are the most popular models:
Hyundai Elantra, Subaru Forester 2.5XT Limited, Honda CR-V, Hyundai Sonata GLS (2.4), Toyota RAV4 V6, Toyota Highlander V6, Subaru Outback 2.5i, Ford Fusion Hybrid, Toyota Prius, Honda Civic LX.

Best and Worst Used Cars

You have to have a subscription to get details, but your library may have it.

Used car prices are pretty high. Cash-for-clunkers got a lot of old cars off the road, and a lot of people can't afford new cars, so demand is quite high. I have a 1997 RAV4, and it's been a really good car. I'm looking at cars, too, because mine needs someone who can fix the little things that are breaking.
posted by theora55 at 8:56 PM on November 29, 2011

A $10K Honda Fit is going to be like an '07 or '08 with 80-100K miles, which isn't awesome (as awesome as Honda cars are). It sounds like the limiting factor here is going to be the table you have to carry. Would a luggage rack work for all that stuff? Certainly for skiing it would, and it would open up your options quite a bit, i.e. sedans, i.e. whatever year Honda Civic you want to afford. Any of these cars can fit everything else you carry besides skis and tables.
posted by rhizome at 9:05 PM on November 29, 2011

While the Fit is a great car, you could have a substantially larger Civic for not a lot more money. And in the used spectrum, there's a lot more of them to choose from, which helps keep the prices more reasonable. I got nearly 300k miles out of my 2000 Civic, that I paid $6500 for (with 90k miles at the time) and only put about $500 of repairs into over nearly 6 years of ownership . I have since graduated to a 2011 Civic.

I have heard similarly pleased owners of most Toyotas.

One thing you certainly want to consider is that most cars will need timing belts replaced around the 100k range, which can cost up to a couple hundred depending on the model. And there's always the one-off catastrophic repairs, usually stuff having to do with the electronic components in the engine. I had a larger bill to replace a distributor once. Make sure you ask about these types of repairs (especially the belts) when you're looking at cars in this mileage range. Nothing stinks more than buying a used car and then sinking money into repairs right away (as long as you weren't expecting them).
posted by erstwhile at 9:22 PM on November 29, 2011

I personally think that $6-11K is the sweet spot for a used car. Don't buy a honda or toyota at that price point unless you get an amazing deal, they are very overpriced used. Look for a Ford Escape or Focus or a Mitsubishi/ Nissan/ Mazda you'll get a lot more car for your money. Narrow it down to 5 or 6 models, research any known issues (ex: Subaru headgasket failure) and decide what model year you want or don't want. consumer reports is the bible for this but google the model and year you're interested in and see what the owners have to say. Decide what options you want. And plan on buying some accessories for it too- good floor mats, new tires, a roof rack etc should run your around $1000 but are well worth it in terms of tricking out a small car for outdoor activities.

Once you have a short list just look for any of those cars in your price range. If you're confident that the major mechanical items are going to be reviewed well for you then, personally I'd try to get very low miles over most anything else.

If you're going to buy a house you might look for a well priced loan as it will improve your credit dramatically. If you get a low enough interest rate on, say, half the purchase price that will likely pay for itself. If you decide not to buy a place you can always just pay the car off.
posted by fshgrl at 10:34 PM on November 29, 2011

Buy at the higher end of your range, but don't imagine that spending a lot of money will automatically get you a great used car. Research, care in selection, careful negotiation and a professional inspection are each more important than the price point.

I've driven old, cheap cars for the last 22 years, and would not do it again the same way. Low-end cars exert significant constraints on one's quality of life, especially if one doesn't know enough about cars to perceive developing problems before they become serious. Cars nearer to the end of their service life have problems more often. Some problems can be catastrophic if not dealt with promptly, and you can only deal with them promptly if you recognize the signs that they exist; people who are mechanically inclined and/or experienced at working on cars can squeeze a lot more value out of an older car than can someone who's a relative noob. Even so, fixing a car is usually a drag, and the awareness that a car might need to be fixed soon will make you hesitate to take long road trips that you might otherwise enjoy. I started to experience the joy that is a reliable car when I got married, because my wife chooses newer cars. Overall, her way is better.

FWIW, I actually kept pretty solid records of all cash expenses on my wife's last car, a 2001 VW Jetta bought at three years old with 30K miles on the clock. I did some analysis of those expenses around the time we decided to replace it, and learned some interesting things. Turns out that my biggest mistake (besides buying a VW) was negotiating poorly at the time of purchase; we paid too much, and threw away at least a couple thousand dollars on the first day. I also observed that the average cost per month, including payments, maintenance and depreciation, went steadily down until the car was about 8-9 years old, leveled off and then started to climb. In cash terms, I'd have been better off selling the car at 8 years and letting someone with less liquid cash deal with the problems. If I hadn't done some of the repairs myself, or if I'd accounted for my opportunity costs inherent in the increasingly frequent repairs, I'm sure it would be clear that we should've dumped the car even sooner.
posted by jon1270 at 2:19 AM on November 30, 2011 [1 favorite]

Yeah, buying a used car is a gamble. My brother has driven a string of $500-$2000 cars his whole life, and it seems to have paid off. But the only thing that stopped him from having to buy twice as many cars over that time period was luck and his lack of caring if a car sucks.

I drive a lot, and went through a cheap car spell. The only thing that made it workable for me was actually having two cars. I'd just keep my ear to the ground for good deals, and then snap them up and dump the worser of the two cars.

jon1270 makes a good point with opportunity costs- both with the sunk money, and with being able to have reliable transportation. I've spent far too much of my life fixing old cars.

My impression is that if you are going to go the used route, buying cheap, practically disposable cars is going to be the best option.
posted by gjc at 4:58 AM on November 30, 2011

For 10k, you should be able to buy a new car. Check out 2010 or 2011 holdovers for the Hyundai Accent, Kia Rio and Nissan Versa. Holdovers are brand new cars, but steeply discounted, as they're last-year's model that didn't sell. They're usually better-optioned than most, as many were used as showroom display models. They come with a full manufacturer's warranty (100k miles/10 years for the Hyundai and Kia).

Just let the salesman know up front you only have $10k, and that has to include the tax, title, and other fees. My wife has a Hyundai Accent - it's been very reliable for her, and it's a good looking and comfortable car.

None of these will accommodate a 4' table or full-length skis, but a quality roof-rack (like from Yakima) would take care of that... or buy a folding table where it folds in two as well as collapsing the legs (Coleman makes a nice one.)
posted by Slap*Happy at 7:50 AM on November 30, 2011

While the Fit is a great car, you could have a substantially larger Civic for not a lot more money.

When we bought my wife's '07 Fit, we cross-shopped with the Civic. We drove both, parked them side-by-side, and climbed in and out of both of them. The Civic's interior space isn't substantially larger, and the Fit has a hatchback and seats that fold down and give you a flat cargo area, or fold up, giving you a tall back seat cargo area.

However, the Civic will feel smoother and more substantial while driving. My wife preferred the Fit's sporty, taut handling.

In either case, going with a Honda is a good choice for longevity and reliability.
posted by Fleebnork at 11:05 AM on November 30, 2011

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