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How to buy a car with little money?

Determine Your Budget

The first step is to determine how much you can realistically afford to spend on a car. When buying a car on a tight budget, experts recommend spending no more than 10-15% of your annual income on a car purchase. Make a list of your monthly expenses like rent, utilities, food, etc. and determine how much disposable income you have left each month for a car payment. Be sure to factor in the cost of insurance, gas and maintenance as well which can easily add a few hundred dollars per month to your car expenses. Knowing your budget upfront will help narrow your search to affordable used car options.

Get Pre-Approved for Financing

Before you start shopping, get pre-approved for financing so you know what interest rates and monthly payments you qualify for. Many dealerships work with lenders to offer financing to customers with poor or no credit. Going in pre-approved gives you leverage to negotiate a better interest rate at the dealership if they can beat the rate you’ve already been offered. Online lenders like Capital One, Wells Fargo and Bank of America offer pre-qualification applications on their websites with no impact to your credit score. This will help you stay in control of what you can afford.

Down Payment Options

While you don’t need a down payment, putting 10-20% down reduces the amount you have to finance. Saving up $1000-2000 could lower your monthly payment significantly on an inexpensive used car. Buy here, pay here dealerships are an option if you need to finance 100% of the purchase price, but interest rates are typically much higher. Some ways to come up with a down payment quickly include:

  • Using a portion of your tax refund
  • Making extra money driving for Uber/Lyft
  • Selling unwanted items online

Putting any amount down shows the dealer you’re serious and gets you a better rate.

Find the Right Used Car

Finding a quality used car that meets your needs without breaking your budget takes research. Here are some tips for finding affordable, reliable used cars:

Set a Mileage Limit

Look for used cars with less than 40,000 miles. The lower the mileage, the more life a car will have left before requiring repairs. Expand your options by looking at certified pre-owned (CPO) vehicles which come with extended warranty coverage to give you peace of mind.

Focus on Long-Lasting Models

Some brands and models are known to be long-lasting if properly maintained. Toyota Camry, Honda Civic, Subaru Outback are examples of used cars that often go 200k+ miles without major issues. Avoid models prone to problems like Land Rover, BMW, Mercedes to keep maintenance costs down.

Study Reliability Ratings

Turn to sites like JD Power and Consumer Reports to see reliability data on specific makes and models. Vehicles with a track record of above-average reliability will cost less in repairs down the road. Test drive and have a mechanic inspect any used car before purchasing.

Search Listing Sites

Use sites like Autotrader, and Craigslist to find used cars listed in your area. The search tools let you filter by price, mileage, features and more to hone in on solid options that meet your criteria. Facebook Marketplace and Nextdoor can also have deals.

Negotiate the Best Deal

Once you’ve found some used cars in your price range, here are some negotiating tactics to help land the best deal:

Come Prepared

Research the make, model, trim level and mileage of the car to determine fair market value. Look at both dealer retail and private party prices. Showing up informed on reasonable pricing gives you credibility.

Check Trade-In Value

Use Kelley Blue Book or Edmunds to find your car’s trade-in value beforehand if you plan to trade in your current vehicle. This gives you a stronger position to negotiate the most for your trade-in to lower your out-of-pocket costs.

Ask About Discounts

Kindly ask if there are any current discounts, rebates or incentive offers that could help lower the price. Dealers may be willing to negotiate if they have sales quotas or bonuses on the line.

Make a Reasonable Offer

Start below asking price and meet in the middle. Show your research on pricing and highlight any flaws or wear-and-tear on the vehicle as leverage when making an offer. Stretch for a better deal, but stay realistic.

Get it in Writing

Make sure any verbal agreements like throwing in new tires or a warranty are put in writing on the sales contract before signing. This protects you from misunderstandings or charges appearing later. Also have a mechanic inspect it first.

Final Steps for Purchase

Follow these final steps to seal the deal on your new used car:

Review All Paperwork

Don’t rush through paperwork. Read everything carefully to avoid surprises. Get an itemized breakdown of fees and the interest rate if financing. Beware of extras like extended warranties that raise the total.

Check Insurance Rates

Contact your auto insurance company to add the car to your policy. Insurance costs factor into your total affordability. Some cars have much higher premiums.

Register the Vehicle

The dealer will provide temporary registration. Take your signed title to the DMV within a few weeks to register the vehicle in your name and get license plates. This avoids fines for expired registration.

Celebrate Your Deal

Now that you’ve sealed the deal on a quality used car within your budget, celebrate! Driving home in your new ride will be a rewarding feeling after doing your homework and negotiating a great bargain.


Buying a car with minimal funds is achievable through careful budgeting, research and negotiation. Determine affordability, secure financing in advance, identify reliable models in your price range, employ negotiating tactics and follow all final purchase steps to drive away in the right used car for your money. Patience and perseverance will pay off!

Step Action Items
Determine Your Budget
  • Calculate monthly income
  • Factor in existing expenses
  • Deduct amount available for car payment
Get Pre-Approved Financing
  • Apply online for financing
  • Get pre-qualified without credit check
  • Have financing options ready
Down Payment Options
  • Save up cash in advance
  • Tax refunds
  • Extra income sources
  • Selling unwanted items
Find the Right Used Car
  • Set mileage limits (under 40k)
  • Research reliable models
  • Check expert reliability ratings
  • Search car listing sites
Negotiate the Best Deal
  • Research fair market value
  • Reference trade-in value
  • Ask about discounts
  • Make reasonable offer
  • Get agreements in writing
Final Steps
  • Review paperwork thoroughly
  • Add car to insurance policy
  • Register vehicle
  • Celebrate your great deal!