For whatever reason, maybe high school graduations or perhaps people getting ready for college, I have been inundated with people asking for $5000 used cars.
I could retire today if I just had a dollar for the times I have been asked about where to get a $5000 reliable used car. As I have been talking about on my radio show for some time, the used car market remains at record high values. One of the segments that is most in demand is cheaper used cars. There are a lot of $5000 cars out there, but people have to pay $8000 or more for them with today's market conditions. (Case in point, in the first quarter of 2019 the average used car loan amount was $20,137 according to Experian Automotive.)
Usually, requests for my help go something like this: "Hey CarPro, need a clean, low mileage car for my kid who is turning 16. It needs to be reliable, automatic transmission, and would like to have a Honda or Toyota. I can spend up to $5000 but would like to spend less. Where can I get one?" I get that request virtually every day. It is heartbreaking to tell people that they are on an impossible mission, but it is a fact.
Where You Won't Find One and Why
I work with over 200 franchised new car dealerships in over 30 markets where the Car Pro Show airs. With rare exception, none of these dealers will sell a car anywhere near the $5000 range. The reason is simple. It is the liability. New car dealers are held to a higher standard and no matter how many times people are told cars are sold "as-is" they expect a reputable dealer to stand behind what they sell. Should a dealer sell a cheap used car and the brakes fail and somebody gets hurt, there will be a new name on the dealership shortly.
Given that, a private seller is the only way to go and you will need to have patience and diligence to find the elusive $5000 car. I will offer up a few tips to help you on your long journey.
First, have realistic expectations. Everyone wants the $5000 Honda but you'll get a nicer, lower mileage car in a domestic brand. Every case is different, but sometimes the domestics are half the price of the popular imports. Trying to find a truck or SUV in the $5000 range is a total waste of your time, they hold their value too well.
Keep in mind, too, that simple is better. If you go back into the decade of the early 2000s and look for an older Mercedes or BMW, there is a lot more to go wrong than if you look at a 10-year old Chevy Malibu or Ford Taurus.
Try to focus more on the mechanical side than the cosmetic side. If you find that $5000 car that is mechanically stable, you can do the cosmetic fixes as you go and end up with a car you can be proud of.
Check the vehicle history report if you are about to pull the trigger on a purchase. It is the best money you can spend. You are looking for major prior body damage, flooding, or title problems that will render the car worthless, like an odometer discrepancy.
Ask around your circle of family and friends to see if anyone knows someone selling a car. You will be much better off if there is some sort of connection and you'll get more truthful answers about the car's condition.
Lastly, watch for scams. Usually, deals that look too good to be true, are. There are a LOT of scammers out there, pricing cars way too cheap, to get you to send them money that you'll never see again. You have to be really careful. The $5000 car can be found, and one that won't nickel and dime you to death, but it is not easy by any stretch of the imagination.
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