In this post I went over some numbers that illustrate the favorable odds of gambling on used car purchases.  That was just an example using averages.  Now I’m going to share five of my real-life car buying scenarios as I’ve bought and sold cars for my wife and I.

1995 Mitsubishi Galant

Purchase price = $6000 (bought it on a payment plan)

Mileage at time of purchase = 60,000

Mileage at time of sale = 170,000

Approximate repairs over entire time driving = $500

Months we drove this vehicle = 84

Cost per month = $77

We hated this car but it ran great without giving us any trouble.  I sold it to a college kid for $1000.

1996 Jeep Grand Cherokee

Purchase price = $12,000 (bought it on a payment plan)

Mileage at time of purchase = 80,000

Mileage at time of sale = 205,000

Approximate repairs over entire time driving = $1500

Months I drove this vehicle = 60

Cost per month = $225

I loved this vehicle.  It was loaded and so nice, but I bought it on payments which wasn’t wise  It didn’t cost much in repairs over the life of it but because I paid so much for it the cost per month is a little high for my liking.  I sold this vehicle to a college kid for $1850 when it needed a fuel pump.

2000 Dodge Grand Caravan

Price = $3000

Mileage at time of purchase = 130,000

Mileage at time of sale = 225,000

Approximate repairs = $1000

Months driven = 72

Cost per month = $56

This is one of the most reliable minivans ever and the model year 2000 was THE most reliable year for this make/model of van.  We got such a great deal on this vehicle.  When it started giving us transmission trouble we gave it away to someone who wanted it.

2000 Cadillac Catera

Price = $5000

Mileage at time of purchase = 105,000

Still driving this vehicle.

Approximate repairs = $2500

Months driven = 65 so far

Cost per month = $115

This has been a good vehicle with luxuries that aren’t necessary but are nice to have.  It has cost quite a bit in repairs so I’ve learned the hard way that luxury-name vehicles are more expensive to keep up.  I’m still driving this car and plan to drive it a lot longer.  It is still a nice car – not perfect – but I like it.

2004 Mercury Monterey

Price = $5000

Mileage at time of purchase = 108,000

Still driving this vehicle.

Approximate repairs = $1000

Months driven = 10 so far

Cost per month = $600

We really like this van.  It is loaded with nice luxuries we weren’t used to having with our first minivan.  We’ve only had it for 10 months and it has already cost us a considerable amount for repairs, but I believe we will make up that cost with many months of no repairs.  At least that is what we’re praying for.

So here is My Car Buying Strategy:

• Look for vehicles 3-5 years old with approximately 100k miles
  • Most of the depreciation has already occurred
  • 100k miles in 5 yrs usually means the vehicle got a lot of highway miles which is better than the wear and tear of stop-and-go city miles.
  • If there are no obvious signs of problems with the vehicle the chances of winning on a cost-per-month basis are pretty good for a vehicle that is 5yrs old.
• Look for the $5000 or less price range.
  • There are a lot of decent vehicles at 5yrs old & 100k miles for a $5000 price range.
  • It is easier to find these deals buying from individuals rather than dealerships or used car lots.
• ALWAYS research reliability and car history.
  • I prefer Edmunds.com for reliability.  KBB.com is also a good place to do research.  It is amazing to me how reliability ratings for the same make of car can be drastically worse from one year model to the next because of design changes.
  • Carfax.com is worth the investment.  If you’re going to shop pretty serious for a month or two it is worth it to go ahead and pay for unlimited reports for a month or two.  Look for red flags such as wrecks, flood damage, major breakdowns, and routine service records.

My approach isn’t rocket-science but it is simple enough for even a normal busy person to do.  The bottom line is have a plan/guidelines for your purchase, and have the discipline to stick to the plan.