What to Do If You Still Can’t Afford to Buy a Used Car
If you’re shopping for a car and are constrained by a tight budget, the current used car market isn’t doing you any favors. Buyers are still feeling the lingering effects of production shortages during the pandemic, inflation of the U.S. dollar, and increased demand for affordable vehicles — which are all keeping used car prices sky high.
Many of us still need cars for daily transportation to and from the workplace, but what can you do if you don’t have the income to purchase even a second-hand car? Here are some approaches that you could take to get the vehicle you need.
Need More Advice for Buying a Used Car? Don’t miss these helpful shopping tips!
Knowing how much you can afford to spend on a used car
First of all, make sure you’re assessing your financial situation carefully when determining how much you can afford for a car. If you stretch your savings too thin, you could wind up in an even worse situation.
MarketWatch recommends spending no more than 20% of your monthly take-home income on vehicle expenses, which includes a monthly car payment, insurance, gasoline, and maintenance costs.
Buy an older, cheaper used car
As much as you desire to drive a gently used car that’s only 1-3 years old, you need to consider much older models with more miles on them. Come to terms with the reality that you won’t find a near-new vehicle at a rock-bottom price anymore. You’re far more likely to find a used car under $10,000 if you search for ones that are at least 10 years old.
That doesn’t necessarily mean you have to drive a junker. Remember that most modern cars are made to last a while and can often exceed 150,000-175,000 miles on their speedometer before needing major repairs — as long as the car was well-maintained and avoided accidents.
Opt for a smaller model
You can settle for a compact car that’s a bit cramped. Large vehicles tend to cost more — and drain your wallet on gas fill-ups — so choose a tiny sedan or crossover from an economic brand for now until you can afford a larger vehicle with more legroom.
Finance at a lower monthly cost
Rather than pay for all or most of your purchase today, you can spread out the bill over multiple years. Talk with the car sales rep at the dealership about extending the loan term from 48 months to 60 or 72 months. Although you’ll pay more money in interest over the long run, your monthly bill will be far more affordable.
Borrow money from someone you trust
Still don’t have enough cash to afford the monthly payments? Find a family member or close friend who is willing to lend you some money. Privately borrowing money is a common way for shoppers to make ends meet and afford the vehicle they need. You’ll need to repay the lender once you get back on your feet, but there’s nothing wrong with asking for help.
Consider joint ownership
Do you have a partner, family member, or roommate who would agree to split the cost of a car so you can both share it? Split the bill and co-sign on a used car that you can share. If you both need the vehicle at the same time, you can carpool together or catch a ride with someone else. This is a great option if you live with someone who is also shopping for an affordable car.
Get your parents to give you their old car
You may not have the income to upgrade to a newer car, but your parents might! Discuss the idea of them buying a newer car and bequeathing their old one to you. Older folks are likely to have a much larger savings amassed to afford a car, so find someone who has been considering replacing their aging vehicle. You get their old car, and they get a sweet new ride. It’s a win-win for everyone!
Save up some more money
If you aren’t in a hurry to immediately buy a car, you can spend some months pinching pennies and cutting expenditures to save up some extra dough. Here are some easy ways to save up for a car purchase.
Market forecasters predict that used car prices won’t drop anytime soon, with dealers having a consistently low supply of used cars to sell and higher demand due to industry-wide increases in new car prices. So, waiting for used car prices to drop isn’t a feasible solution if you need a car now.
Aaron is unashamed to be a native Clevelander and the proud driver of a Hyundai Veloster Turbo (which recently replaced his 1995 Saturn SC-2). He gleefully utilizes his background in theater, literature, and communication to dramatically recite his own articles to nearby youth. Mr. Widmar happily resides in Dayton, Ohio with his magnificent wife, Vicki, but is often on the road with her exploring new destinations. Aaron has high aspirations for his writing career but often gets distracted pondering the profound nature of the human condition and forgets what he was writing… See more articles by Aaron.