Wealth Building: Buying your next car, the smart way.

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It is said that the three largest expenses people have are their houses, food, and transportation. Today we will be focusing on the transportation portion and more specifically cars, because it is one of the purchases that so many people get wrong. We will be taking a crash course on buying a car, fixing your car, and learning how to avoid the mistakes so many people make which may end up costing thousands of dollars.

At 28 years old I have now owned 7 vehicles. All of these vehicles were used, paid for in cash, and found on craigslist or bought from a friend or family member. The most I have ever spent on a car is $7,000 and out of all of these vehicles I don’t believe I’ve ever had to put more than $500 into them for maintenance or fixes.

This almost entirely debunks the myth that when you buy a used car you are buying an unreliable vehicle that will have countless issues. My current vehicle is the most expensive car I have purchased, a 2009 Chevy Malibu. This car had 37,000 miles on it when I bought it and cost $7,000. This vehicle was purchased from an older couple on craigslist and I have now owned it for just about 3 years and I’ve racked up the miles to 70,000. Since owning it, I have replaced the brakes, which I installed myself, and a few other misc. parts, costing me a total of about $300. I’ve had the same experience with almost every other vehicle I have owned. I bought them for a reasonable price, with low miles, put minimal money into them for maintenance, and then sold them for the same amount I bought them for or close to that number.

So how do I do it?

I’ve created somewhat of a system that I use when purchasing a car that I will share with you today.

Try to find a family member or close friend who is selling a vehicle that you may be interested in. One of the most important factors in purchasing a vehicle is knowing the history of it including: who drove it, how well it was maintained, and if there are maintenance records available or not. These things are all important to find out and having the opportunity to know this information is a big benefit you will have in buying a vehicle from a private party over a dealership.

Do you research on the vehicle. This is a simple step that anyone can take whether they have any car knowledge or not. One excuse I often hear is ” I don’t know anything about cars, I just drive them.” While I understand not everyone will have an interest in cars, it’s worth the 10-15 minutes of online research to find out how reliable the car your buying is, if it had any common issues, and what some of the pros and cons are of the model your considering buying. Because lets face it, not all cars are created equal. Some cars are just known to have constant issues and those are the ones you want to stay far away from. Other cars like Toyota and Honda for instance, have a long track record of being great vehicles and are often good buys to make.

Utilize Craigslist for you car purchase. While craigslist is a great place to find a really good deal on a car, there are things you need to be aware of. I have created a system of buying cars on Craigslist and I will share all of the specifics with you right here. 

  1. Only look at cars that are for sale “by owner”. The reasoning behind this is that car dealerships, especially used car dealerships, have one goal in mind, and that is to make money. This results in the car’s price being inflated and you overpaying for the vehicle. The second aspect to this point is that you generally will not know much about the car’s history before you bought it. While they do have things like a Carfax report which will let you know some maintenance records and whether it has been in an accident or not, you can’t beat a face to face encounter with the person who has owned the car and driven it. Car dealerships often buy rental vehicles, cars from auction, and trade ins, which leaves you with almost no knowledge on who owned the car prior to you and how it was driven and maintained.
  2. Beware of people posing as vehicle owners but who are really dealers. I have run across this countless times, and it is very important when buying a vehicle that you ask the questions: Is this your vehicle? How long have you owned it? Is the title in your name? Why are you selling the vehicle? These questions will help you sift through all of the independent dealers who buy cars from auctions, clean them up, and then sell them for a profit. Again, you want to stay away from these people because their main goal is to make money off of you, and again, we do not know the history of the car.
  3. So now that you have picked the “by owner” option you want to enter some specific criteria of the vehicle’s you want to look at. Here is how I set up every vehicle search I conduct.

I make sure I check the box that states “has image”

I set up the distance from my zip code that I am willing to travel to look at a vehicle. I generally choose 30 miles as that is the distance I am comfortable traveling. One additonal thing to note is that you want to be picky on the area in which you are buying your vehicle. I live near Chicago and 90% of the time I avoid looking at vehicles in the city of Chicago for a few reasons. Cars that are driven in the city generally have a harder life than those driven in the suburbs. The streets are filled with speedbumps and pot holes, there is constantly bumper to bumper traffic, and parking is a nightmare generally leaving the bumpers and doors of the vehicles scratched and scraped up. I like to find vehicles which are shown in the pictures to be in a nice neighborhood, and even better shown in front of the sellers home. This is a sign that they are not a dealer as dealers generally photograph the vehicles in some random parking lot.

Set Price- I usually look at vehicles between $2,000 and $8,000. Choosing a minimum of $2,000 will eliminate all of the people who list their vehicles in the hundreds of dollars even though they are selling it in the thousands. For example: For sale Honda Accord $400. Then when you open the ad you realize the price is actually $4,000 or $40,000.

Make and Model- I leave this blank because It will show you every make and model available on craigslist, giving you the option to click on whatever vehicle you would like. Model year, I also leave this blank.

Odometer- I will choose a range of 2,000 and usually about a max of 90,000. Now this is just my personal preference as I usually like to find low mileage cars. This is not to say that there aren’t great cars out there with over 100k miles. My advice is as the miles get higher you should definitely get pickier and choose a vehicle that you are sure was taken care of well and has a reputation of reliability.

Next, I click on the “condition” link and check off the boxes new, like new, and excellent. Many of the vehicles listed in good or fair condition are not worth your time looking at.

Finally, I choose the “title status” link and ensure I click the box that says clean title.

I leave all other boxes blank but if you would like to search for something more specific that is completely up to you. 

Setting up an appointment

So now that you have set all this criteria and have found a car you like, you will call and set up an appointment with the owner. When speaking to the owner you want to ask questions about the vehicle such as: How many owners has it had? Has it been in any accidents? Do you have any of the maintenance records? Can you forsee the car needing anything in the near future such as brakes or tires? Have you had any issues with the car?

Again, be picky. You are about to drop thousands of dollars on this purchase and you want to make sure you’re getting as much information about this vehicle as possible. Also, remember that there will always be other really nice cars that come up for sale in the future. Don’t settle just because you think this is a once in a lifetime opportunity.

Test drive

Now this is where you want to be thorough. Ask to take the car for a test drive and make an effort to go further than just around the block. If you are not mechanically inclined, think of making an appointment at a local mechanics shop to have them go over the vehicle. This may cost you something like $50 but it is worth it if the car has issues that will end up costing you hundreds or thousands of dollars in the future. Don’t be afraid to take the car on the expressway, or down a street with a bunch of bumps so you can listen for any odd noises. Make sure to try things like turning on the heat and a/c, rolling all the windows up and down, trying out the radio and any other electronics.

The purchase

Now its time to buy the car and there are a few ways to go about this. Once you and the seller have agreed to a fair price you will want to ensure that they have the title to the vehicle and that it is in their name. You could go to a local bank and do the exchange there just to make sure everything is ok on the money side of things. You could also go to a local currency exchange to do the title transfer and ensure everything is legitimate. Many times the sellers will want cash which you could bring, or you could give them a certified check so you’re not carrying around thousands of dollars in cash.

Things to avoid

As a car owner there are a few things you will want to avoid that can lead to huge expenses for you and losses of money.

1. Avoid buying a new car. If you can avoid buying a vehicle from a car dealership I highly recommend doing so. Like I mentioned before their main priority is to make a profit and the big loss here comes from depreciation. Cars are depreciating assets meaning they are constantly going lower in value. This means they are not a good investment, yet many people are taking out loans with interest in order to pay for them.

2. Do not get your car serviced at the dealership. Unless the dealership is offering you free services because you purchased your vehicle there, avoid getting your car fixed at dealerships. They will be the highest cost mechanics around, so it will benefit you to do a little research and find a good mechanic in your area to do your repairs. Even better, research your car’s issues on Youtube and see if you can fix it yourself. I have had great success with using YouTube to fix my cars and have saved thousands of dollars over the years by doing so.

3. Do not lease a vehicle. This is simply throwing away your money for the luxury of getting of a new car every couple of years. Again, purely building the profits of the dealerships.

4. Vehicle Loans. As I mentioned above cars are depreciating assets. Unless you can get a 0% interest loan for a vehicle I would not take a loan out for a car. If you can’t afford it then you simply shouldn’t buy it. One thing to think of if you can’t afford a car is to take advantage of things like Uber, riding your bike, or getting a ride from friends or family. This will give you an opportunity to save money so that if you really need a car you can purchase one on your own in the future.


I know this may seem overwhelming, but all of the steps listed are very important to consider. I hope the tips given will help you with your next purchase or sale of a vehicle. If you have any questions please feel free to ask in the comment section below. Also if you would like to get updates on our articles please subscribe! Thanks for reading.


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