How to Get a Sweet Deal on a Used Car

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Dear Frugalites, do you want to know how to get a sweet deal on a used car? Meet “Lucky,” my new, used car. Today, I will share my secret recipe for how I saved thousands of dollars on the purchase of this car. I hope you will find a gem in these tips should you find yourself in need of a used car sometime in the future.

Identify a Target Car

As I described in my article about When to Say Goodbye to an Old Car, I rely heavily on my trusted mechanic. About two years ago, I asked him what car would be best for me to buy next, as I knew my previous car, Rosie, wouldn’t last forever. 

We discussed various options that he felt might work for me. I told him I wanted to stay within the compact class, as I liked getting good mileage and saving at the gas pump. In the end, he recommended a Toyota Corolla, which has one of the lowest ownership costs around and is quite reliable. 

I took his advice to heart and decided right then and there that my next car would be a Corolla. It didn’t hurt that I had an elderly cousin who had driven hers, like, forEVER. She told me, “It never needs anything, just an oil change!” Yes, I’d like to have a car like that!

Play to your Strengths to Minimize Risk

Although I am a bit handy around a car, I am not a mechanic. Confidence to assess a vehicle on the spot is not a skill I possess. Therefore I chose not to go to auctions as it is too much of a risk for me. If I had a mechanic friend who would be willing to accompany me, I might try it, but I don’t. 

Similarly, I decided to emphasize cars in my search that already came with the “Safety Certificate” required for registration, limiting any significant repair expenses after purchasing the car. I am an excellent online researcher, so it was a no-brainer to start my car shopping online. I found that using a combination of AutoTrader and Kijiji Autos worked best for me. 

Know Your Market (and other markets, too)

So, even though I still had a working car, I began to research the local market for the Toyota Corolla. I live within an hour’s drive of a city of about 175,000. I started there, as it is close and easy to drive to if need be. Right away, I was disappointed. The prices were high! Three hours from me is a much larger city of almost a million people. The prices were much better! It seemed like everyone who lived in this city wanted to sell their Toyota Corolla. It is a very common car in this city which was good news for me. 

I researched the Toyota Corolla prices in this big city until I knew them inside and out. If you gave me year and mileage, and condition, I could give you a solid guess on the price. A 10-year-old car would be a reasonable goal based on my current finances. There were so many in this market that I felt confident I could find one with low mileage.

I added one further price saver to the mix: a manual transmission. The Corollas with stick shift were $1,000 cheaper than the ones with an automatic transmission. I decided to go with the manual, which I enjoy driving. 

Find the Best Price to Match Your Budget

So, my ideal Toyota Corolla would be ten years old with a manual transmission with a mileage of around 100,000 miles. I have good reason to expect to get quite a bit more out of a car like this: “Auto owners and experts alike peg the Corolla’s life expectancy at between 200,000 and 300,000 miles. For comparison, the moon is 238,855 miles from Earth!” 

Woo Hoo! Although I’m not planning to drive Lucky to the moon, it would be nice to have many miles together. 

In the large city market, my target car was priced around US$5,000 and at dealerships, often as high as US$6,500. Really above my budget, as I wanted to closer to US$3,000. Somehow, I needed to find a bargain!

Compare Your Options

I poured over the ads for my target car within a driving radius of 3 hours in every direction and came up with three options. Here they are for your review:

#1: US$2,400-2005 Corolla, Automatic Transmission, 100,000 miles.

  • Body Condition: Poor – Rocker Panels and rear wheel wells rusted through
  • Maintenance: New Exhaust, patched exhaust leak, new brakes, two sets of rims
  • Required for Safety certificate: UNKNOWN

#2: US$3,000-2008 Corolla, Manual Transmission, 155,000 miles

  • Body Condition: Decent – Substantial “ding” in the back right that didn’t affect safety certificate
  • Maintenance: New all-season tires, winter tires used for two seasons
  • Required for Safety certificate: At least new brake drums (approx. US$250) 

#3: US$4000-2011 Corolla, Manual Transmission, 100,000 miles

  • Body Condition: Almost perfect
  • Maintenance: Brand new Michelin Tires, brakes redone last year (pads, drums, rotors), recent oil change, no winter tires or rims
  • Required for Safety Certificate: The owner said “very little.”

Assess Your Seller to Limit your Risk

Lengthy conversations with each of these owners on the phone included basic questions about the car. I assessed how conscientious the seller was with the car and how much they knew about cars with questions like:

  • Did it get regular oil changes?
  • Has it been oil sprayed?
  • Were there any accidents?
  • How many owners?

I was also quite interested in why these sellers were selling the car, and I would ask if there was any major problem with the car and then gauge their response.

Negotiate to Get That Sweet Deal on a Used Car

Several factors arose: My friend who was helping me was unwilling to drive to the location of car #1, which was over 3 hours away. I don’t blame him! As well, the body condition alone made this a poor choice. Car #2 was the closest, within an hour’s drive. However, I wanted to keep the mileage low, so car #2 was not appealing. I also wanted to keep the age of the car within ten years, if possible.

Car #3 was looking like the best. But the price was too high for my budget. I called the owner and stated I would be willing to come tomorrow with cash to buy his car. I knew he had already purchased a new car, and the old one was sitting in the driveway. Would he take US$3,200 for his car After a brief pause, he confirmed if I would, indeed, come tomorrow? Yes, I would! He accepted my offer.

So, I had the car of my dreams for US$3,200.

The Bottom Line

The next day, my friend and I drove to the big city and picked up my new car. That week, my mechanic did the safety inspection, and my new car Lucky didn’t need ANYTHING for the pass! How Lucky!!!

While I had initially wanted to buy a car with a safety certificate, nothing in my price range came with one. Dealerships were selling my target car with safety certificates for around US$6,500, sometimes with a short-term warranty, too. So, there was a cost associated with that lower risk. To meet my budget, I had to assume the risk of getting the car safetied myself.

One of the tipping points in my purchase was that I liked the seller of Car#3 and trusted him. It was a single-owner car, and he maintained it well. He accepted my lower offer, so I felt the risk was worth it. 

Even if Lucky had needed something for the safety, it still would have been worth it. As a matter of fact, she still needs a panel in her front end to protect the electrical from the elements. My mechanic is ordering this, and I’ll have him install it when the part comes in. It’s an investment in Lucky’s longevity and will likely cost me only $US160. 

From Zero to a Hundred in the Comments Section!

Do you have a target car for your next purchase? What are your strengths and weaknesses when shopping for a used car? Have you ever gotten a SWEET deal on your dream car? Tell us about it in the comments!

How to Get a Sweet Deal on a Used Car
Colette

Colette

Colette is passionate about sharing her knowledge of thrifty living and self-sufficiency. She has developed her skills in self-reliance living in the suburbs, the city, and more recently, on her own Half-Acre Homestead. Colette lived five years completely off-grid and without running water in an eight by 24 foot tiny home while designing and building her own 18 by 24-foot eco-cabin. She has just launched her website, Half Acre Homestead. (www.halfacrehomestead.ca) Colette invites you to stop by and visit this work in progress! Coming soon in February 2022 is her exciting new online program. Interested in Resiliency, Preventative Health, and Self-Sufficient/Off-Grid Housing (to name a few!)? Stay tuned for more details!

6 thoughts on “How to Get a Sweet Deal on a Used Car”

  1. I like your searching via Auto Trader and Kijiji (the US equivalent would be craigslist.org) that usually cuts out the used dealer’s markup. In the US there are several websites that allow searching craigslist inside a radius that you get to choose, from very local all the way to nationwide. You want a radius that’s reasonable for how far you’re willing to drive to check out a deal. I used to use searchtempest.org but I see a few minutes ago that domain name is posted for sale even though they were still included last November on this website

    https://www.wikihow.com/Search-All-of-Craigslist-Nationwide

    I’ve also found deals across the US on eBay (that didn’t need a mechanic’s lookover), but if you find a promising eBay vehicle deal, it’s easy to confirm if the location is close enough to you to be practical for a thorough examination.

    Next, I never assume that the vehicle owner is any kind of expert on his/her wheels. I always ask in addition to basics like mileage, date of last oil change, date of any major repairs, etc., if a complete set of maintenance records was kept — so you can review them. Government required safety inspections are a pitifully inadequate minimum. If your initial lookover (including maintenance records if available) looks promising, you want to have a mechanic’s shop lined up so you know in advance what will be charged for a thorough checkout of the vehicle. There may well be condition issues that the current owner can’t possibly be aware of.

    Before risking that thorough mechanic’s checkout (with a known labor price in advance), you want a signed contract (called an option) with the vehicle owner that s/he is obligated to sell to you at whatever price is being asked initially, and that s/he is only free to re-market to anyone else in the event that you choose to back out on the deal (if for example you learn of issues uncovered in that thorough examination that are deal breakers for you). The reason for that option contract is, in the event of some surprisingly good discoveries the condition examination that the owner didn’t know about, to keep him/her from backing out on you and jacking up the price (to you or anybody else) way beyond what you had agreed to. The short version of that is that you can walk away from the deal agreed upon, but s/he cannot.

    In the US, each state has some minimum dollar amount (called an option consideration) that makes an option contract enforceable in that state’s court system. It might range anywhere from $10 to $100 dollars, but it’s simple to lookup the minimum for one’s state. I know nothing about Canadian laws. However in one’s deal with a likely vehicle, I propose that you volunteer to pay the cost of the mechanic’s thorough examination (and let that payment serve as the option consideration to make it enforceable — since if you walk away from the deal, the owner still gets to keep the informational benefit of that examination), and furthermore, if you then choose to buy the vehicle, the owner agrees that you can roll that option consideration amount into the vehicle price agreed on — so you’re only out the thorough examination cost if it turns up some deal breakers. I think that’s a fair risk whether you eventually do the deal or walk away from it.

    The use of an option contract is most common in real estate transactions, but is much lesser known for all kinds of other assets, whether aircraft, RVs, machinery, household appliances, a pet buffalo, or whatever.

    A final issue is that any person’s criteria for a vehicle can vary wildly. For some, a tiny VW bug might be perfect. For others if an RV has some scratches on the paint the deal is dead. For some if the vehicle is capable of being lived in … in case of being forced into nomadic living (given the millions of evictions likely in the near future in the US), something that can carry or tow a camper may be the minimum acceptable. I read where in Cuba they are still maintaining and driving cars from the 1950s — because parts and still available from that pre-electronics era. So I wouldn’t dream of trying to guess what anyone else’s vehicle specs and minimums might be.

    –Lewis

    1. Hi Lewis, So many great points in your comments. Thanks very much! Yes, it is true that everyone would have a different vehicle spec and minimum. This was the first time that I bought with a target vehicle in mind and, for me, I found it helped the process. However, there have been other times, like when I bought “Rosie the Golden Rocket” on a gut instinct, a vehicle type totally new to me.

      I think many people will benefit from your detailed description of how to use an option contract. I am not familiar with Canadian law in this area, but I think your idea of assuming the thorough inspection cost would be a very worthwhile endeavour.

      These kind of contributions are gold for all of the Frugalite readers who read this article in the future. Thanks so much! For example, based on one of your comments a while ago, I started taking Coconut Oil in my coffee. It is simply FANTASTIC, but to be honest seemed like an altogether strange idea before I tried it. I feel quite confident my immune system is getting a worthy boost every morning. Much appreciation for your taking the time to share all of your research abilities and knowledge!!!

  2. I love making the deal on a bargain vehicle. Well, any bargain. In 59 years of driving I’ve purchased a lot of vehicles. My first two vehicles were both Harley Davidson motorcycles. The first one was totally disassembled. I added rings as I put it together. The second I put together from so many sources that I ended up registering it as “1965 reconstructed junk”.
    My husband usually sent me to buy the second handed vehicles. Some cars, some trucks, a high top conversion van and some just 2 year old luxury cars. I could listen to a vehicle run and pick out problems most of the time. But I always aimed for a reasonable price for age and condition. We went togather to buy a couple of new cars. Most of the time we had a type of vehicle, a price range and age in mind. A few times we hadn’t really decided on what to specifically look for. We’d see something on a lot or a sales site and we’d decide to check it out. I’d look up area sales of similar vehicles as a starting point. Sometimes I could pay cash. Sometimes I just had a good down payment and our bank would make the loan. On the van the local used car lot owner was a friend and he carried the note and did a repair in house. I paid for the parts. His mechanic did the work as part of the deal for the sale. I’ve done that twice with him.
    I don’t work on vehicIes any longer. Surgery on an arm with a bar and 7 screws left my dominant hand too nearly useless.

    1. Hi Clergylady, Your ability to pick out issues with the car by simply listening to the engine truly impressed me. Wow! Maybe one day I can get there….for now, i do know the sound of an alternator belt getting ready to go! I rode motorcycles for six years and had to chuckle at your registration of “1965 reconstructed junk”! How were the local registration authorities about that? Were you ever pulled over by the police and had to explain that? I think that phrase would make a great name for a band….any takers out there?

      I was sorry to hear about your dominant hand needing that surgery and your challenges with that. You still do so much! Good for you! Thanks for your comments and your stories. I always enjoy them!

  3. Colette, when I first started using coconut oil for cooking (scrambled eggs), I had no idea of the other many edible and health uses for it, plus using it to shave with, using it as a gun lubricating oil, or even as a fire starter (when used like petroleum jelly or gelled hand sanitizer on a cotton ball, cosmetics removal pad or dryer lint) — NONE of which uses require refrigeration. See this article plus comments for many details:

    Coconut Oil: 80 Reasons to Add It to Your Stockpile

    https://www.theorganicprepper.com/coconut-oil-a-preppers-panacea/

    and then run a search in the books section on Amazon for COCONUT OIL BOOK, and you’ll be astounded at the many relevant titles that will come up.

    –Lewis

    1. Lewis, you had me at GUN LUBRICATING OIL!!! My bug out bag is already too heavy….are you telling me I need to throw one of my HUGE bulk organic coconut oil jars in there, too! OK, I will…..on a more auto-related topic…I am going to search the Organic Prepper article “Coconut Oil: 80 Reasons to Add it to Your Stockpile” and see if there is any use of it for my new car….maybe to shine up the interior? Polish the sidewalls of my tires??? I’ll keep everyone posted! Thanks so much!

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