How can I tell if buying a cheaper car will end up costing me more?

Question

Cars can be very expensive, so it seems like a good place to save money. However, I worry that getting a car that is too cheap, especially if buying used, may end up costing me more in maintenance, gas, etc.

What should I be looking out for in order to avoid this problem?

Answer 1

Look at the previous owner and the maintenance records they have for the car. Someone who has regularly serviced the car (and I mean more than just an oil change, preferably maintenance history from a reputable garage or main dealer[1]) and hasn't skimped on it.

Also, keep in mind that the newer the car, the more electronic components they have that can go expensively wrong, especially if you fall prey to a garage whose method for debugging electronics is to throw components at the car for a grand a pop.

I tend to look for the following (but I am a bit "special" when it comes to buying vehicles):

• Clean vehicle. Someone who can't even be bothered to chuck out ten days' worth of burger wrappers and empty drinks cans before showing a car to a prospective buyer obviously cares so much about the car that they take good care of it, right.
• Matched, name brand tires. That's a bit of an odd one but a good indicator that someone's willing to spend money on their car. If you see a car with four different tires on, three of them made in North Korea, that's not a good sign
• Check the colour of the brake fluid - the darker it is, the older it is. Most people will change the oil regularly but forget about the brake fluid, even though that should be changed every year or two, too. It's a good indicator of how thoroughly the vehicle has been serviced.
• Maintenance receipts. You want someone who keeps the receipts to show what work has been done. The stamp in the service book isn't worth that much unless you can go see the garage who did the work. Plus, stamps have appeared in service books after the right person suddenly found themselves in possession of a Benjamin.
• Before you go see a vehicle, go find the forum for it and have a look for the sort of problems people tend to encounter with the vehicles. Google for problem with this particular model, find out if there are any recalls etc. Make sure you ask the seller specific questions about these issues and if you like the vehicle but get "dunno" as the regular answer, get someone to check it out.
• Find out who the car nut at work is (you know, the guy who drives odd cars, has more T-shirt with oil stains than without them and tends to have permanent ingrained oil residue under their fingernails) and ask him nicely if he'd be willing to help you check out a car. Most of us will if we've got the time, and most of us have made pretty much every purchase mistake in the book. More than once, but we should be able to recognise it and stop you from falling into the same trap.
• Once you found something you like, get it checked out by a mechanic, preferably by a specialist for the make/model or at least a main dealer. Get them to provide you with a list of work the vehicle needs and have them explain to you the importance of each line item. If the vehicle requires work - especially when the seller kind of forgot/didn't realise certain work was needed - go back and haggle or walk away.
• Don't, ever, believe what a used car salesweasel tells you. If they tell you it's afternoon, get a second independent opinion. Yes, I know there are a few good helpful ones out there but there are also a bunch of rip-off artists out there and IMHO they are the majority as that seems to be the way that most dealerships load the dice.
• If you are searching for a car as a transportation appliance (as opposed to someone like me who tends to seek out a vehicle because I want a specific model), be prepared to walk away from a vehicle. Don't get emotionally attached to it because it's the correct colour and thus overlook the hole in the floor that would make Fred Flintstone proud. Work out what the vehicle is worth, have a look at the work it needs and if the two numbers don't look good together, go walk.

And don't forget the golden rules of car buying:

• Never buy the first one you see. If you are looking for a specific model, make sure you check out several so you get a feel if one of them is a dog.
• Buy the best condition car you can afford within your budget. That's condition, not mileage or extras. Extras are mostly worth zilch anyway, and I'd rather have a car with 100k on it that's maintained perfectly than one with 25k on the clock that's never had brake fluid or an oil change.

[1] Unfortunately that might not be one and the same place

Answer 2

Look for mileage costs, insurance, depreciation, maintenance and other costs make up the total cost of ownership.

I used consumer reports for this information. There was a great article about how much it cost to drive different models including all that math.

http://www.consumerreports.org/cro/cars/car-prices/what-that-car-really-costs-to-own-4-08/overview/what-that-car-really-costs-to-own-ov.htm

Answer 3

Check with local mechanics which cars they drive and dealers the buy from. Tell them your budget and needs and you'll find they're pretty consistent in their recommendations.

Also, don't overlook dealers in favour of buying direct from owners, both have pros and cons.

Dealers have to allow you to return the vehicle within a certain time frame, their name is also on the line. Some offer warranties to fix anything that goes wrong in the first x years. Do your research, but for old cars this can be a valuable saving. Also, some dealers offer to provide you with parts at cost for the life of the vehicle, also potential savings.

Don't go in on a Saturday, do go in near the end of the month. Go back several times, compare, negotiate.

Answer 4

Edmunds.com has a really cool guide that calculates some of these intangibles for a wide swath of cars under their True Cost to Own Ratings section.

I highly recommend it.

Answer 5

No one has said this specifically yet, but you're more likely to avoid the kinds of problems that concern you by choosing makes and models of vehicle that are known to be reliable. Honda is well-known for the reliability of their cars, so definitely consider them. @MrChrister mentioned Consumer Reports--they are an excellent resource for buying new and/or used cars.

@Natashska made a great point about dealers vs. private sellers. To that point I'll add the following:

• Consider buying demo models of new cars. These typically have 2k-6k miles on them since dealer employees drive them, and/or use them for test drives. They aren't "used" in the technical sense since they haven't been sold yet, but the amount of usage they've had means you could get a nice break on the price.
• Going to a dealer near the end of the month really does help. They tend of have sales quotas they're trying to reach and are more flexible in dealing as a result. This tactic (and a good friend) saved me around $3000 on the car I bought in 2006.