Hello all,
I make about $41k a year and need to replace my car. I’ve always driven older cheap cars (last one was a ‘99 Buick I paid $2.5k in cash for), but the repairs wore me out after a few years. I gave in and sold it to a local scrapyard for some extra cash.
I pay roughly $600+ in monthly expenses (rent, food, gas) so budgeting isnt a huge problem.
This time Im looking for a more reliable, financially efficient option without completely draining my wallet, But Not sure if I should buy used (dealership/facebook marketplace/offerup) or look into leasing, so any personal advice would help, especially from those who’ve been in my boat. Thanks in advance
For the folks making 30-45k yearly. How are you able to afford the car you're currently driving?
byu/6IXMILITIA inpersonalfinance
Posted by 6IXMILITIA
39 Comments
Honestly if I could pull it off I would use an e-bike. I would but some of the roads I would be on are super non-bike friendly.
Do not lease, that’s for people who want to drive new cars and replace every few years.
~~Get access to Consumer Reports through your local library, then look at their best used cars under $10k list. That’s what you want.~~
Scratch that, consumer reports now sucks compared to when I last used it.
This is a good list: [https://www.motortrend.com/features/best-used-cars-under-10000](https://www.motortrend.com/features/best-used-cars-under-10000)
and this: [https://cars.usnews.com/cars-trucks/advice/most-reliable-used-cars-under-10000?onepage](https://cars.usnews.com/cars-trucks/advice/most-reliable-used-cars-under-10000?onepage)
Just any old Honda or Toyota that’s been taken care of. Until you make 60k+ yearly don’t even consider getting an auto loan, imo.
Reliable $10-12k car, put a grand or two down, finance it for max 36 months, only sign if you get a decent rate, and your payment will be sub $300. That’s what I would look to do
I learned to work on them myself, and there isn’t much more than that. I just built a bunch of cribbing blocks to raise my 1995 SUV up high enough to drop the transmission and replace that. Planning to get started on that this weekend.
If I were needing to take my fleet into shops (my wife and I have 5 vehicles, 3 fun ones and 2 commuters), it would likely be cheaper to sell them all and buy something new. Not everyone is in the position to go this route, but it’s what has worked for me.
Double check to make sure it’s not too late but there may still be time to use the EV tax credit. $4000 off a used or $7500 off a new EV. It goes away at the end of the year. You would need to make sure an EV is a good choice for you (charging availablity etc) but you can get used Chevy Bolts for $11K after the credit for example.
Buy an older Honda and learn how to do your own maintenance on it
I have 2 p.o.s. cars. I’m decided into 2 states. In CA I have a 2002 Chevy tracker with 365,000 miles on it. In OK I have a 2002 pick-me-up truck. God only knows the mileage on it. That truck will be running long after I’m gone. Ins. On both is $50. Each.
Spend $10k on a used Toyota.
You’re welcome
In 2009, I bought a 1998 Toyota Camry and drove it until someone else totalled it, I bought it for $3k and the insurance company paid me $4k for it.
In 2012, I bought a 2007 Toyota Corolla directly from the owner for $6k, and drove it until I totalled it in 2021. By then, I was making good money and had a kid, so I bought a 2019 Toyota Corolla for much more for the safety features.
The trick was to find a car that usually lasted 100k extra miles (e.g. a car with 150k that usually hits 250k with good maintenance) and take it to a mechanic to get it inspected. I dodged a few lemons this way. My 2007 Corolla did have its AC and starter break, so I probably put in another $4k over the 9 years I owned it. But it was pretty cheap to own.
We don’t make that amount specifically, but spend like we do. We went with a lease for her car, because we don’t drive it much and the repairs would be someone else’s problem. I have a 1996 Chevy 2500 I’ve been keeping alive, but do all repairs myself. Our mortgage is only about $450/mo (70% down payment), and our bills are very low. We shop at thrift stores and Goodwill. We buy staples in bulk from the restaurant supply store and store in food grade buckets with gamma lids in the basement. We grow and freeze/preserve 80-90% of our produce for the year in the gardens, and butcher our beef and pork for the year. Built a walk-in in the garage for cheap. Animals from auction. Beef averages out to ~$2.50/lb, pork around 75c-$1/lb. We cut our expenses to an absolute minimum. What you stated is roughly what we budget to spend, and the lower the better. Don’t want to work until we die. You need to look at your expenses and see where you can make cuts, and what skills you may be able to acquire to save you money indefinitely. At some point I realized I was wasting $4k/yr MINIMUM at the gas station, just on drinks and tobacco. It adds up. $4500/yr in fast food for lunches instead of packing one. There are always ways you can save when you take even a small purchase and cut it throughout the entire year. An energy drink per day will cost you $775-800/yr. Wouldn’t you rather have that money for something else? Just my thought 🤷♂️ Look at what to cut and do yourself, and you’ll find you have more spending power than you think.
Currently, I don’t have any car payment, but my 2013 Santa Fe was a lemon from the moment I bought it and I need to replace it. Prior to that I had a 2005 Santa Fe and that thing was fantastic (lasted almost 300k miles). I’m looking at a 2020/2021 Honda CRV for my next car. Price is reasonable, I’m going to go certified pre-owned, and it should last me long enough to pass down to my daughter when she gets her license in four years. I think the one thing I’m thinking about in your instance is how far is your commute? My job is 13 miles away, so I can afford to pay a little less for a car with slightly higher mileage.
How are you are to survive in this day and age in the first place is the real question here
8 years ago I bought a 2006 Honda civic hybrid. I got it really cheap because the battery needed to be replaced, so I did spend a lot up front on that.
It being a hybrid saves me a lot of money, but I also ended up buying a house very close to where I work so my commute is ridiculously short. I don’t think it would have lasted this long if I had a normal/longer commute. So that’s not exactly car buying advice, but seriously, if you are at a job you know you’re going to stay at for a long time and you have the opportunity to live close, absolutely do it.
Think of resale also. Hondas are a good option. Also cheaper for repairs and parts
But a used subcompact car. Nissan Versa.
[https://www.carmax.com/car/27763410](https://www.carmax.com/car/27763410) ($17,000 | 59k miles). Although look into buying new as well. The used car market prices have gone up rapidly since COVID. [Amazon also sells used and new cars.](https://www.amazon.com/b?node=10677469011&display-style=1-column-static&ref_=vindp_sb_autos_subnav_logo)
48 month auto loan. 5.59% APR. $2,000 down payment. Assuming 6.25% sales tax & registration fees (depends on your location)
Around $350/month car payment.
Get an auto loan through a credit union such as Alliant Credit Union. They are one of the biggest credit unions in the U.S.
[https://www.alliantcreditunion.org/borrow/credit-union-car-loan](https://www.alliantcreditunion.org/borrow/credit-union-car-loan)
Goal is to end up with car note payment and insurance under a certain amount and cash for everything else, including a third-party warranty not from the dealership. Determine your price range, vehicle type, acceptable year and mileage before searching. Depending on diligence, it might take me 4-8 months to find a car. I’ll search local reseller sites, gathering any info I can like car history, call them and ask about the car, and confirm its availability, they wont hold it but they will sell as fast as possible. You’ll need cash upfront, but the last thing you want to do is take bad terms and try to refinance; do the work beforehand to avoid overpaying.
You had half of the answer older yes, but Toyota.
Buy a 2008 Prius for $4k with high mileage. Mine has 220k miles bought it with 150k miles for $5k. Still got at least 150k more miles to go and looks nice. Has never needed a day of maintenance aside from an oil change every 8k miles and new tires every 50k miles
If I were you I’d look into reliable used cars priced between $15-20K. That’s what you can likely comfortably afford on your salary. Dave Ramseys advice is no more than six months of your annual income and pay it in cash to avoid interest.
I’m in the same income range as you and that’s my current plan to replace my car in a few years.
DO NOT lease. You can’t afford that…
Do not lease. Purchase the cheapest reliable car you can get. Ideally, from a private seller and HAVE A MECHANIC YOU TRUST DO A FULL INSPECTION. At least make sure the tires and brakes are good. Ideally find a mature seller who has service records so you know it got regular oil changes. Look at MPG, insurance rates, and the Cost of Ownership for the specific year, make, and model so you don’t pay 1999 Buick repair bills for the next 10 years.
OR
Tesla model 3 RWD are super cheap right now. If you have access to cheap or free charging, that can save thousands per year. But if gas is cheap and charging is not easily available at home or work, that’s not your best option.
I would highly suggest looking at a 2013-2015 Mazda3. Mazda makes great reliable cars that are inexpensive to maintain and fix with great mileage. I have owned cars 4x the price of my 2013 mazda3 and it still drove and handled better.
I make 45k and drive a paid for 2012 Corolla that I’ve had for 9yrs. For the last year I have been putting $350 a month in a savings account specifically for when I need to get another car, I treat it like a car payment.
Everyone is giving you great info for cars to consider.
You need to avoid 2012-2018 automatic Ford Focus. It’s got a shitty transmission. It is not a matter of *if* it has to be replaced but *when* it has to be replaced.
The manual for those years is a great car.
Buying used is the only thing that would make sense financially, unfortunately, and it’s not even going to be great used.
I drive a 2009 Ford Focus that I found on market place (and had quickly looked at by a mechanic before I purchased). I paid about 6k for it, had 76k miles on it.
I know everyones opinions on fords LOL but the older focuses are really reliable if you keep up on maintenence, and parts for them are generally pretty cheap compared to a lot of other cars.
I’ve had her for about 7 years and put another 50kish miles on it. All of the work I’ve had to put into her as cost me about 3k, and that was mostly in labor fees.
Plus, the car is so inexpensive that once it’s fully paid off, it makes sense to drop insurance down from full coverage. That alone can same you 1k a year, if not more.
A used non-hybrid Corolla and leave some money (which you may havent had) for future repair is my formula for folk with low income now.
It is reliable. And cheap to fix. Some owner just quit because those are too reliable and has no tech.
If you can find those, that’s a gem
Bought it in full. My landlord knew I went multiple years with a car so the “rent” she began collecting from me was to save up for a vehicle.
Honestly I’d buy through car max and get an extended warranty also comes with a 90 day warranty for literally anything that is free of charge and comes with the purchase. Depending on the warranty you purchase from them you could be looking at a $50 deductible for just about any issue that happens with the car atleast mechanically/powertrain related.
Have your business buy it outright
I paid $900 for it. Rented a trailer and towed it home. Replaced the steering rack and everything else was fine. Mechanical knowledge goes a loooong way when it comes to owning cars for cheap.
You can find a 10-15 year old Honda Accord for ~$10-12k. With $1,000 down, that’s about $300-400/mo for 36 months. Buy from a private seller. I just sold a 2014 for $11,750 with 99k mi. Be patient and look for low miles and a good service history. Don’t be afraid to walk away and keep looking if anything seems off.
Honda or Toyota. I bought a 2008 Honda CRV for under $6,000. It had 171,000 miles on it. All I’ve done is regular maintenance and changed the AC fans on them in the three years I’ve had it. I believe Toyota and Honda are the most reliable.
There are decent vehicles out there for under $5k.
I.e. the Van that reliably served my family for the last 14 years. Its a 2012 nissan quest with 172k miles but it’s still running like a mother fucking tank. I love it and I hate that the trade in value is $1200. Ridiculous. We just got my wife a replacement and I guess I need to sell it but a big part of me just wants to keep it.
Private party sale is only like $4500 so keep looking. You can find a great deal
I got my car almost 10 years ago. It was a Chevrolet Malibu with 44k miles at a Cadillac dealership and they wanted to get it off the lot. Paid 10k flat when they wanted 14. I brought it to Nebraska and it got hailed on almost immediately. Insurance totaled it out and I bought it back from them so they wrote me a check for 7.5k. It’s been running so strong ever since and is near by 140k miles. Easy maintenance I’ve done almost entirely by myself except changing the trans fluid at 90k.
Couple lessons here. Look for sub-standard brands for that type of dealership. Premium brands want to sell premium product.
Look for a mechanically sound car with cosmetic damage. My car has a rebuilt title because it was totaled by the hail (about 40-50 tiny to small sized dings) and is probably worth about 2k because of that. I know for a fact it will drive to 250k if I wanted to keep it that long.
I make $170k, my car partner is $680 and insurance is $236 and I feel like I can barely afford it. I don’t know how anyone making under $100k can afford anything over $400.
I make more now but I was making about 40k when I bought my first new car. I could afford it because it was a Ford Fiesta with a manual transmission. I did splurge a bit and got the model with leather seats and a sunroof but it was still within my budget.
My rule of thumb is owing a car is about $100 a month, not counting insurance, oil changes, brakes and tires. If I buy a car for $3000, it must last 30 months. If I have to spend, say, $600 to keep it running, it has to last 36 months total. If the car makes it beyond the 36 months, at that point, it’s “making me money.” That’s my 2 cents…
Me and my fiance are each driving Toyotas. 2014 Prius and a 2006 4Runner. Each around 200k miles. We make close to $170k a year. There’s no reason for us to get anything newer.
Basic maintenance is all they ever need for the most part. In the 7 years we owned the Prius, the only thing I’ve ever had to repair was a brake booster. The 4runner is just as reliable but it’s more of a toy for us and we bash it around pretty good, so we have broken things that wouldn’t have broken otherwise.
Either way, Toyota or Lexus will do wonders for you. Honda would be my second choice, then non-cvt Nissans and Mazdas. Buicks would be close to bottom for me…just above a Dodge.
Spent $8k on a very reliable used car and maintained it for years (2013 Prius)