The Debt-Free Car Project

Edmunds.com

The Debt-Free Car Project

Can you buy a reliable used car for under $3,500? Here's how we did it, plus what we learned. Really, anyone can do it.

Read the full story here

prefcustomer

Interesting story, but one question pops up--what, if anything, did you do to verify the mechanical condition of the car before you bought it? Authorization to do a pre-purchase inspection with an independent mechanic might be tricky to get from a used car lot like this (one more reason to do a private party sale), but did you read up on any particular issues with this model? Did you have someone with mechanical savvy at least give it a once-over, to see if Fred was telling the truth about the oil smell?

It would be interesting to hear what kind of options there are at this price point for ensuring that you aren't buying a $3500 car that's days away from needing $3500 (or more) in repair work.

cincygt2009

For that money, I could buy a 1997 Grand Marquis with 35,000 miles on it from Craigslist. Seriously! 35,000 miles!! You could put 200,000 more miles on that with just basic maintenance!

vt8919

Looks like a great buy!

Just noticed in the photo gallery that you have a picture of a tan 97-99 Camry, but it is captioned as a 1994. Just so you know.

rm2008

prefcustomer,

We did get it inspected. We’ll talk about this in detail in our next chapter.

-Ronald Montoya

autobahnsho

I used to buy my cars with my tax refund- usually under $3k. Be careful with the mechanical details, examine them closely, and most will run well for several years.

My current ride is a 97 Subaru I bought in 2009 for $2500. It had 120k miles on it. $1300 for complete A/C overhaul, an alternator, two axles, and battery later, it's got 153k miles and still gets me to work every day. That's about $125/month, I didn't drive it for a year when I was overseas..

clarence6

Absolutely excellent article and great idea to cover this type of real-world experience. I hope this series doesn't get buried in the Edmunds/Inside Line maze of blogs.

stever

Paying an extra $100 to have your own mechanic check out a used car is cheap insurance. That's no guarantee that you won't wind up with a problematic car, but it'll help weed out candidates that have obvious problems (obvious to a mechanic but perhaps not to the average car buyer).

And if an AutoCheck or Carfax report misses an accident (not all get reported), a mechanic might spot a repair that a consumer would overlook. The accident may have been minor and the repair fixed expertly, but just knowing about it could help in your negotiations.

stingray454

While this kind of car isn't my cup of tea, I can see the appeal here, and I'm looking forward to this long term series to see how this car holds up. It is a nice alternative to new or near new econoboxes, which I personally hate. I would much rather drive this car with its age and mileage than say a brand new Honda Fit, Toyota Yaris, Chevy Sonic, Hyundai Accent, etc. Even if it needs a transmission or engine rebuild during the next year or two, you're still at a cheaper price point, and driving a nicer car with more luxury, more features, and MUCH better safety.

vbresheare

Hey folks, good job, glad you're considering the 40+million unemployed or underemployed in these times.

I'd like to summarize:
1. Set Parameters: Price [$1000 over for nego.], models [expanded to Infiniti, Lexus, Volvo, Mazda, mileage under 165k.
2. Subscribe to Autocheck to verify accidents, repair history, salvage title.
3. Use the Buyer's Worksheet to inquire of vehicle history, specs.
4. Short List: See the vehicles, drive them, make initial offers.

5. Negotiations: Out the door price: sales tax, registration fees ask to have them included.

Note: Preference for private over dealers for easier negotiations.

Does this about sum up what your strategy was?

peter_salinas

PROJECT FUNDAMENTALLY FLAWED!
Mr. Montoya, while your project here is admirable, it is fundamentally flawed, and I thought we had explained this to you when we spoke at the BHPH convention earlier this spring. Here's the flaw: Edmund's, I take it, paid the $3,800 for the Lexus. Unfortunately, the 3 million or so consumers who must turn to BHPH dealerships across the country have no access to someone who will give them $3,800 to buy a car without having to pay it back. Saving up is an option, true. At $350 a month, a consumer would have to save up roughly 11 months to purchase the vehicle you opted to buy. During that 11 months, how did the consumer get to work, take their kids to school, go to the doctor or go shopping. Public transportation, may be just dandy in California, but in Oklahoma, Arkansas, Texas, Florida, and just about everywhere, not so much. Consumers are willing pay for the freedom and convenience a BHPH used vehicle contract affords them from profit-motivated retailers that offer a valuable and legal service. Unless Edmund's is willing to give $3,800 to some 3 million consumers, then I see little value in your project other than as an academic exercise for those capable of putting up $3,800 in cash to buy a car.

rm2008

Mr. Salinas, at some point a person will have to make a sacrifice in order to break the cycle of financing a car. Public transportation in Los Angeles isn’t the most convenient, yet thousands of people use it every day as their means of transportation. Finally, if saving up for the vehicle causes such an intrusion, we would suggest an amount that the person is comfortable with. It may take longer, but it will be worth the wait.

-Ron Montoya

lexapower

Is there any reason why you don't list the dealership where you bought the car? Maybe you don't want to give them free advertising or they did not want to be included in the article in case you said something negative, but I seriously would be ever so grateful to know about this place. I'm a 24 year old full time college student living in Los Angeles and have been looking for a used car on and off for about 2 years now with no lucky. My price range is the same as yours (under 4000, cash saved up over 6 years of taking the horrible bus to school and work and not having a car) but I have horrible credit so I can't get financed and want to avoid buy here pay here nightmare at all costs. Every single dealership I've read the yelp reviews for in Los Angeles that has cars in my price range has only 1 star and they all say STAY AWAY and I've read the reviews for over 100 dealerships now. I am starting to lose hope. I'm nervous about buying from a private party. If you could please tell me either the name of this dealership or at least the cross street in Pasadena near where their small lot is located I would be very grateful and would like to give them my business. Thank you.

laesquire

I really would like to have heard more about the purchase process and how Edmunds TMV pricing was used or not used and accepted or rejected by the dealer during the purchase. Based on the subsequent mechanical issues, it sounds as if the car was in average condition. If so, then per current Edmunds TMV, with 165k miles, the purchase price should have been no more than $2,700 + tax, etc. But since the mileage and condition have not been specified, it's impossible to say. Any more detail you can provide?

sharpend

Buying a car with a known history from a private-party probably would have been better thing to do, especially with an all cash deal. You just never know for sure what you are getting buying from a tiny little used car lot like you did. The bad smell and slow starting should have been a pretty good clue that Lexus repair costs were in the future. Heck, there really are good people out there selling their well-maintained cars. It takes time and effort but it can eventually save you money - and may even keep you from getting stranded.