When buying a car on a budget, you may think your options are limited. While it may be true that your circumstances do not allow you to buy a brand new vehicle, you might be surprised at the many options that are available, even if you’re looking for used cars under $5,000.
To get started, you need to examine your budget. There are many factors involved in budgeting for a vehicle purchase. Some questions to ask might include:
- How much cash do you have available to contribute to the purchase?
- Can you afford a monthly payment? If so, how much?
- How is your credit? Would you be able to get financing with top lenders, or would you need to seek financing with secondary lenders, or directly with the dealer (buy-here-pay-here).
If you have some cash to contribute, a good job, and great credit history, you will have many options available. But, if you are like many buyers, you are likely lacking in at least one of the 3 questions above.
For the sake of this article, we will examine what types of vehicles you might find for under $5000, and how to pick a good one. You can use this information to find a reliable vehicle that will help you work around limited cash, low income, or poor credit.
Tips for Getting the Best Value for Your Budget
❶ Don’t automatically exclude vehicles with high mileage. Just like anything you own, if you take care of a vehicle, perform regular maintenance, and replace parts as the wear out, it will last a very long time.
Mileage is not an accurate depiction of vehicle condition.
You should be more concerned with maintenance history, parts that have been replaced, and the overall current condition of the vehicle. You might be surprised at how reliable a well-maintained 200,000+ mile vehicle can be.
❷ Do some research on the particular make and model you wish to purchase. There are numerous resources available on the internet for whatever vehicle you are considering. Forums, websites, Facebook pages and more are dedicated to your particular vehicle.
If a vehicle you are interested in needs repair, chances are that you can find answers about similar problems that other owners have had. Do your homework before you buy to determine the severity of any problems or imperfections your vehicle might have.
This will help you determine whether the fix is a cheap $10 part, or will result in a $500 visit to the repair shop.
❸ Purchase a vehicle history report. If you have settled on a particular car and you are ready to negotiate a deal, it is well worth the money to purchase a vehicle history report.
A vehicle history report will tell you whether the vehicle has ever been an accident. It will tell you how often maintenance was performed, and it will give you a summary of the previous owners of that vehicle.
If your vehicle is a clean one-owner, you can expect to have fewer problems than if your vehicle changed hands every year.
❹ Lastly, take the car to your mechanic for a second opinion. Many mechanics are glad to take a look at your car for you and give you a list of problems or potential problems before you buy.
Do not get too discouraged by the list, however. Just because something could become a problem, it doesn’t mean it will.
Having your mechanic’s opinion will bring you peace of mind knowing what problems you may encounter.
10 Best Cars, Trucks and SUV for Under $5000
Toyota Corolla: Toyota Corolla is a great car in the compact category. It shouldn’t be hard to find a decent Toyota Corolla older than 2010 for under $5000. These cars are plentiful. Toyota has always been known for durability and the Corolla is no exception. Fit and finish is not always the best, and you may have some minor issues to deal with, but you can count on a Corolla to get you from point A to point B ’til the end of time.
Honda Civic: Who doesn’t love a Honda? Honda’s are one of the most popular cars on the road and Civics, in particular, are very popular. This popularity makes for higher prices on the vehicle market. That being said, you can still find a very reliable Civic from the early 2000’s for under $5000. Honda has a reputation for quality and durability. If a Civic is maintained properly, they are known to keep going well past 300,000 miles.
Ford Ranger: When purchasing a vehicle on a budget, it is nice to have options. Not everybody can get by with a car. Sometimes you need a truck. Ford built the Ford Ranger compact pickup truck for almost 30 years, with very few changes. The truck was cheap for Ford to build, was in high demand, and has proven to be very reliable. If you are looking for a truck to fit in your budget, the Ford Ranger is a safe bet. You can usually find a variety of Rangers available from the mid-2000’s for under $5000.
Honda Odyssey: Once again, Honda is always a good choice. Like all Hondas, the Odyssey is known for quality and durability. The Odyssey is one of the most popular mini-vans, and as such commands a higher price than competing makes. However, many Odysseys are still on the road with over 300,000 miles. This should bring you peace-of-mind buying one. Do your homework, but you can usually find a good-condition 2000-2004 Honda Odyssey for under $5000.
Dodge Grand Caravan: Dodge and Chrysler invented the mini-van back in the eighties. The Dodge Grand Caravan and the Chrysler Town & Country are the mini-vans that started it all. Grand Caravan is not the most glamorous, or sophisticated mini-van out there, but mini-vans aren’t necessarily supposed to be glamorous, are they? The bottom line is that Grand Caravans were built to last. They run (seemingly) forever and models as new as 2010 can be easily found for under $5000.
Toyota 4Runner: When your vehicle needs call for an SUV, you will want to consider a Toyota 4Runner. Toyota durability is famous, and 4Runner is the epitome of Toyota ruggedness. These beasts will go almost anywhere, and are known for low maintenance cost. If your vehicle search prescribes an SUV, try to find an early 2000’s 4Runner. There are usually several on the market in decent condition. Do your homework, but you should not be afraid of higher mileage on a Toyota 4Runner.
Mazda Miata: If you’re looking for a sports car on a budget, the Mazda Miata is a sure bet. Miata is fun, and is a legitimate sports car with rear-wheel-drive. Miata is only available in convertible models. Miata offers great fuel mileage and great performance. The biggest downside to the Miata is the size. Miata only seats 2 and has a very a small trunk, so you won’t be taking a lot of people or things along with you. Be sure to check the history of your Miata. It is a popular car for auto-cross racing. You would be wise to pick one that hasn’t seen a lot of time on the track.
Mid Size Car
Subaru Legacy: Subaru is another Japanese brand that has a reputation for durability. Subaru has a unique, horizontally opposed 2.5L engine. The 2.5L has a unique sound, but it offers great fuel mileage and durability. Legacy comes in many models from basic sedan all the way up through the famous Outback AWD models that will go almost anywhere that an Off-Road SUV will go. Many 2008 and older Legacy’s are available for under $5000.
Full Size Car
Ford Crown Victoria: The Crown Victoria is the ultimate full-size car. It has lots (and lots) of leg room front and back, and the trunk is large enough to fit Grandma and all her luggage if you’d rather not ride with her up front. Crown Victoria has been used in Police service as well as Taxi Service for many years, so they are built tough. Ford discontinued the car in 2011, but $5000 Crown Victoria’s are usually plentiful up through 2008 model year. You might also search government and police auctions, as old police version Crown Victoria’s are retired every year and auctioned off at very low prices.
Lincoln Town Car: Town Car is the Lincoln cousin to the Ford Crown Victoria. Town Car exhibits all of the same advantages of the Crown Victoria, but with a touch of luxury. This was the preferred car for many limo services for years. They are built for heavy use, they have a very spacious cabin, and they are very comfortable to drive. $5000 Town Cars are usually plentiful up through 2006 model year.
As you can see, your options are plentiful when it comes to purchasing a vehicle for under $5000. It doesn’t matter whether you pay cash, finance, or finance direct with a dealer (buy-here-pay-here). Now you have the tools to make the right purchase and feel confident in the vehicle you have.