3 years / $5000. What to buy?

Hi amazing people on CarTalk! I am ready to buy my first car and I’d love your help!

Next month I am moving from NYC to Jersey for a new job. I intend to have this job about 2-3 years since I am ambitious (promotion/different job) and it is taxing, but fun. After that I am planning to move back to the city. So I am thinking I need a car for 2 to 3 years.

My total car budget target for three years is around $5000, this includes car cost + taxes/title/registration + maintenance, but excludes gas & insurance. Do you think this is doable?

I do not care what my car looks like, only about reliability and mileage. Except I do not want a Smart Car.

Leasing:
I have found that leasing is out of the question for now, the cheapest overall lease cost I have found was about ~$7000.

Buying:
Two options:

1. Buying a more expensive car and selling it at the end of the period

• Newer car, will break down less
• Potentially (much) better MPG (money-saving)

• At end of period, I will not have a car
• Bigger purchase or open a loan
• Having to sell the car at end of period

2. Buying an older car around 2-3K and saving the rest for maintenance

• End of period I still have a car if needed, or I can sell it
• Cheap initial investment, no loan needed

• Breaks down more often
• Less MPG

These are the pro’s and cons I have thought of so far. Have I missed something here?

I’d love your opinion on what would be a good route and / or buy for me?

Thanks in advance!

$140 a month is not much of a car budget. License, gas, and insurance alone can eat up a good portion of that so not much left for the car itself. Might want to rethink a little. I had planned to stay at my job a max of 5 years but ended up being there close to 40.

Somewhere between 1 and 2 is usually the most sensible approach, though I haven’t run any numbers as I don’t follow used car prices closely. I’d suggest a car of around 5 years and 75,000 miles. Cars in that bracket are typically still reliable, though they may start needing bits and pieces replaced that are essentially maintenance, not repairs, as they are parts that eventually wear out in almost all cars. Brakes, sensors, fuel pumps, etc. Any individual car won’t need everything, but likely need some. If the car is a good one, it may nFor one of the increasingly rare cars with a timing belt, that may require changing. If you are driving average miles per year, after 3 years you’d have a car with maybe 125,000 miles, which isn’t especially high for a modern car and should still have quite a bit of life in it and decent resale value. Or you can keep it. With limited driving in a city you could have such a car for years more. I live in San Francisco and we only put about 6,000 miles per year on our car, and most of that is trips out of town.

As for what I’d get, I’d be looking for something with really good reliability to keep potential repair;maintenance costs low, because the difference between purchase price and sale price should be lower than the cost of keeping the car going. Cars in that age range have already done a lot of their depreciating. A quality car will cost more to buy, but also hold its value, so the loss of value won’t be much greater than for a lower quality car. By quality, I mean reliability, not status, as most European luxury brands have the appearance of quality, but aren’t very reliable and are expensive to maintain and repair. I’d be looking for an Asian model or one of a very few domestic models with similar quality. Smaller will be cheaper to buy, insure, fuel, etc, but not necessarily very much so over one of the better mid-sized models, and those can be more comfortable to drive if your commute will be long. Toyotas and Hondas tend to cost more used, but you can also sell them for more when you’re done, and the best of them are highly reliable. Mazdas are also quite good, with the other Asian brands slightly less consistent. Subarus also command a premium because of their very good AWD systems. If you’ll be doing a lot of bad weather driving, especially onoorer roads, that premium can make sense, otherwise, not so much.

Cars I would look at if I were in your shoes? Ford Fusion, with the four, preferably. The current one has a few issues, but the previous one was based on the highly reliable Mazda6 (another good choice). The Fusion was popular so there are lots of them available, they have reliability similar to good Japanese cars with reasonable prices. It is also comfortable and roomy, so nice for commuting. The Mazda3 has been one of my favorites for years, with better driving manners than most competitors and few problems. I also like that it comes in a hatchback or sedan. The Scion xB (the current generation, not the tiny first gen car) has excellent Toyota reliability, and surprising room and utility, but isn’t as popular as the related Corolla. The Toyota Matrix and its near twin, the Pontiac Vibe, are also cousins of a Corolla under another name. As a Pontiac it could be a very good value. Ugly dashboard, but just look at the road. If you aren’t driving as many miles, the Honda Fit is a good car. It would also make a great city car if you decided to keep it, but it’s not as small as it first looks and is OK for commuting, if not as relaxing as a bigger car. It’s still bigger and quicjer than a Honda Civic from the nineties, and people didn’t think anything of commuting in those. There are plenty of others, of course. The Consumer Reports guide is a good resource for getting a sense of the likely suitability of unfamiliar cars. And anything you are interested in buying as should be checked out by a mechanic. If you’re buying an older car expect there to be some items that will need work soon, just not too many. And stay away from rust (beyond the superficial kind). That never gets better.

Good luck finding something you like. Because that’s the most important thing, that it be something you like and feel comfortable in.

Wow Mark, thanks, That’s great info!

First of all: the amount of miles I’ll drive will be between 5-8k, since my commute is only 5 miles one-way.

I like your suggestions, I’ll look into the models you mentioned. I actually was looking earlier at a Nissan Altima 2010 with 50k miles on it at a very reputable dealer for $8500 (so $10k all included). If in good working order, that might have been a deal I should have grabbed? Flipping it 3y later with +20k miles for about $5000.
Buying something like that from a very reputable dealer, would you still bring your own mechanic?

I find this kind of fun, finding a good deal. Here is another idea: buying and selling a used Prius with 150k miles. I hear they are very reliable. Say I can buy one for $10k all included (tax too), would I be able to flip it for $5K after 20k miles / 3 years?

OR - indeed buying a car from 2000-2003 for about $2-3000 and driving it until it’s dead is also an option.

damn, wish you were around when I traded my 03 Passat wagon. 120k miles, engine (V6) in perfect shape, needed new shocks/struts. $3k.

b

It can be done, but can’t be guaranteed. Cars in that price range may or may not go a full 3 years without needing anything except oil changes. You can pay a mechanic before you buy the car to do a pre-purchase inspection which can hedge your bets a bit since he’ll catch anything obvious. But even with a PPI, you don’t know what may be lurking in there that the mechanic can’t see – he won’t tear the engine apart and so he can’t see if something on the inside is getting ready to break.

A 2010 Nissan Altima with 50000 miles for 8500.00 ? On the east coast that think has to have a salvage title or you misread the ad, here in the Midwest it would be twice that. You really need to find someone to help you in person because a 5000.00 vehicle is going to have lots of miles. might need a timing belt if you cannot verify when it was changed. I assume you might be 25 years old or less, if so the price of liability insurance will be high. I would also suggest staying away from Hybrids, All Wheel Drive and highly technical vehicles that can cost a small fortune to repair.

Wow, great comments! Thanks

Yes, the reputable dealer doesn’t have the Altima anymore, but they do have a Sentra S and a Corolla LE for that price. Total incl tax/title and stuff comes down to about $10K. The idea would be to sell/trade in the car after 3 years for about $5K

It seems that in a way, buying a car is always a gamble. You can be lucky and drive 200,000 miles without any major repair or unlucky and be doing major repairs every 30k miles. So, it just becomes question of how to minimize this risk the most.

I am leaning towards an older generally reliable car buy, such as the Buick Century mentioned earlier, with <100K on it and having it thoroughly inspected by an independent mechanic first - which should be able to spot any major repairs, right? Fuel efficiency wouldn’t be great, but with a purchase cost of max $3000, I would have $2000 to spend on any repairs that come up in the next 3 years. And potentially the biggest advantage is that in 3 years, I still have a car left… OR I sell it again for some extra cash.

Feel free to disagree here of course, and please tell me why.

Suydam already mentioned the Century. Given these parameters, which other cars would you recommend me looking at?

I am seeing that Civics & Corolla’s in my price range all have >120K miles on them…

The last year for the Century was 2005. It seems that you can avoid a 10 year old car, and that is a good idea. A 2010 or newer car would be a good idea. The large initial depreciation already occurred and the old age problems have not set in. If you can avoid financing, that is also a good idea. Look at edmunds.com. They have a True Cost to Own feature that will estimate depreciation for the next 5 years. They do it for new cars and newer used cars.

As an example, a 2010 Corolla LE will depreciate about $3000 over the next 3 years. That leaves $2000 for the other expenses. I would expect the Corolla to have lower depreciation thatn most cars.

Your budget is pretty lean, but I think you can at least get in the ball park on this. You may have some cash flow problems though.

What I’d do in your situation is find a 3-4 year old econobox, a version known for reliability, like Yaris, Corolla, Civic, Fit, Focus, etc. Try to choose one with the minimal number of unneeded gadgets possible. If you are able to drive a manual transmission, that could save you a bundle b/c automatics are less reliable and very expensive to fix. Be sure to keep it clean inside and out, at the very minimum rinse the outside off with a hose once a week, and wax it twice a year to keep the finish looking nice. At the end of your job in NJ, you shouldn’t have much difficulty in selling it.

It’s an interesting little puzzle. The question is what will depreciate the least in your time of ownership, but still be acceptably reliable and not need a lot of maintenance and repairs. Cars depreciate the most in their first few years. Which is why I was suggesting something around five years old. By that age the depreciation is to a fair degree dependent on condition and mileage as age.

Since you’ll be driving relatively little you could chance a car with a few more miles to start with as the mileage at the end of your ownership still won’t be very high. I would even go as high as 100,000 given your modest use expectations. If you find a car with 100k miles in five years you can generally assume that most of those were freeway miles, much easier on a car than city driving. You’ve already seen what a premium the most desirable cars go for, but what you need to figure on is how much more value whatever you buy will lose in a couple of more years. So compare values for 2010 models with 2008 versions of the same cars. Use one of the sites that gives estimated prices, not dealer ads. I wouldn’t buy anything much older or you start having to worry about rust and the possibility of more expensive repairs, especially if maintenance records are not complete.

For older cars I’d also be looking for private sales, as dealers typically charge more and all you can assume about an older car at a dealer is that it is clean and runs. Don’t assume they have fixed it up in any way as they won’t have. In all cases find a local nechanic who is agreeable to doing a pre-purchase check and have it done, even for a car from a dealer. Anyone who won’t let you have one done is not someone you want to buy a car from. There is a list of mechanics here on the Car Talk site that may give you a lead on someone to do an inspection. If possible, try to use an independent mechanic near where you’ll be living, as you’ll be needing someone for maintenance and repairs, and this is a way to meet one. Just make it clear that all you want is info on whether to buy the car, that you’re not looking to have him do any needed work. You don’t want someone inventing theoretical problems.

For reliability info, Consumer Reports is still your friend. It’s not perfect, but for comparing similar cars it is pretty good. They also have lists of used cars they particularly like in various categories. If you subscribe to the magazine you can get online access for a small extra amount. That includes car info. I find it exceptionally handy for finding info before any halfway major purchase.

The Altima is a generally decent car, quite common, and not valued as highly as Toyotas and Hondas. It’s the only Nissan car I’d consider. Don’t worry that you are missing out on deals. There are always more cars, and most cars with unusually low prices have problems. Much better to avoid them. Another sales channel I like are the lots run by rental agencies (Hertz, Avis, etc.). These cars are typically 2-3 years old, but fairly high mileage for their age. They will be the usual rental specials without much extra on them, properly maintaintained by the book. The advertised prices are typicall hard and fast, so no painful haggling or being kept waiting around. Most will also let you have an overnight test drive. Given the age of these cars and knowing they will have been maintained, I don’t think an inspection is vital. These cars will likely cost more than what you’ve seen, but the prices will be fair and the most dramatic depreciation is over in the first couple of years. Worth a look, especially since the inventory and prices are online.

Sorry to have gone on so long, again, but this is an interesting puzzle (and I love puzzles). I’m glad to see you having fun with it, too, as most people find buying a car painful.

Oh yes, I certainly should not talk about this with my GF, she hates all having so much options

Thanks so much Mark, this is really super helpful. It’s also good to read that you suggest what I’ve been doing already: for example comparing the 2010 Sentra S with 54k miles with a 2007 Sentra S with 80K miles on KBB, to find out how much the car will likely depreciate.

I am definitely looking into the rental car lot situation, actually browsing the Hertz inventories already!
Finding 50-60K miles vehicles like

• 2013 Hyundai Elantra GLS Sedan for $11K plus tax, title, registration (so $12K all-in)
• 2013 Toyota Corolla LE for $11K plus tax, title, registration (so $12K all-in)
• 2013 Mazda Mazda2 Touring Hatchback for $9K plus tax, title, registration (so $10K all-in)
• 2013 Nissan Versa 1.6 S Sedan for $9K plus tax, title, registration (so $10K all-in)

Those all seem pretty fair, right? Would have them inspected by a mechanic if they’re that new and come from Hertz?

The 2013 Corolla for $12K – and on the road at that price – seems like a very good deal to me. Of the others there, my second choice would be the Mazda. That seems like a very good deal too.

The main problems with the rental cars is you have no option to buy a manual transmission. But otherwise they are well configured, for reliability they tend to order them minimally configured, without a lot of unnecessary gadgetry.

If I purchased a car from a rental company, I’d still want to ask an independent mechanic to take a look. But if they balked, presuming it passed the test drive, I might take a chance since the rental car companies probably have some kind of warranty that would offer at least some level of protection from a big, expensive problem later discovered.

I don’t think anyone should buy a $200 to $3000 car unless they are going to do their own maintenance and repairs.

Very good points. Someone else is recommending me to go for a Mazda Protege with 100K miles on it for about $3-5,000 and then selling it after three years. What do you guys think?

What year Protégé? 100k isn’t a problem, but if it is a 10-15 year old car, that could be.

Basically a Protege 2002 and up, or Mazda3 or Mazda6. There are a few examples of these on craigslist for about $3-5000.

A 2012 would be a much better bet reliability-wise than a 2002. Even if there wasn’t that much of a mileage difference. With modern cars, time often imposes more problems than mileage. All the internal engine, transmission, and suspension rubber seals gradually deteriorate with time.

Either of the ads posted above are about as good as you could do for a car that probably won’t require major repair and should hold a lot of its value for the next three years. I personally would choose the Toyota, but that has more to do with personal bias than actual knowledge of these model years.

My suggestion would be to have any used car looked over by a mechanic. The reason for this is that automotive neglect is far too common and a fair number of comparatively new, low miles cars meet their end inside of 30k miles.
Many people have no desire to spend money on maintenance and often ignore something as basic as a cheap, regular oil change.

On another forum a lady bought a new Nissan Murano and trashed the engine at 15k miles. She had never had the oil changed or even checked it during this time and was rabidly upset that Nissan would not warranty a new engine for her. She accused Nissan of manufacturing junk vehicles and claimed the engine should not fail even if she never changed/checked the oil.

Keep in mind that even a comprehensive check of a used car by a skilled mechanic does not guarantee you a no-problem car. It does swing the odds in your favor a bit more though.