How to Buy a Used Car if You Don’t Have Cash Upfront

As I alluded to in yesterdays post, buying a brand new car is a poor choice. Cars depreciate quickly and with every time you drive them. They lose a lot of their value when you drive them off of the lot too so if you need a car, don’t buy new!

Lots of people, particularly students I think, believe that their only option is to buy new to take advantage of financing and leasing deals that are available on new cars, but that’s not the case. You also have the option to buy used, even if you don’t have the upfront cash for it.

I know what it’s like to be low on cash (each and every semester I have to shell out thousands of dollars for tuition! And then I get hit hard with textbook fees!) but you still have options with buying used.

Take Public Transportation Until you Have Enough Saved

Many students actually don’t need a car. One good option to buying a used car if you don’t have the cash right away is to save up money until you do have enough saved.

Take public transportation until that time. While it might be inconvenient it’s still a foolproof way of getting in the car you want. Plus you’ll probably be so motivated by having to sit on a bus that you’ll make money faster and it will be very gratifying when you do have your car.

Don’t Buy Any Old Used Car

Just because you can afford the car, doesn’t mean it’s the right one for you. If you have to wait for a little while to save up some extra cash so you can get a better car, do it!

Buying a beater can put you in the exact same situation, just in a few months from now, instead of right now. Your future self will thank you for forgoing that junk car and waiting for a better one.

Do your research – for instance use Kelley Blue Book – to really look at what a car should be worth. If they are selling it way less than that, there is something wrong!

Get a Car Loan

Typically, private sales are a better way to save money on a car, by buying it off of (for instance) Craigslist. Car loans are available through some banks and private car loan brokers.

The interest rate on car loans may not be as bad as you think, either. Of course save up as much as possible before you have to take out a loan but if a small loan (with hopefully a lower interest rate) is what is between you and a reliable car that will last you for years, it might be worth it. To see rates on car loans click here.

Buy at a Dealer

This is the least preferable option to get you in a car, because dealers not only can be shady and have higher prices, but they also offer financing usually at higher interest rates.

Only use this option if you are in a true bind, but exhaust the other ones first!


It’s not impossible to get into a car you want if you don’t have the cash upfront, it’s just preferable that you do!



How to Buy a Used Car if You Don’t Have Cash Upfront — 5 Comments

  1. As a student, if you don’t have the money up front for a car I suggest making friends with people who have cars :) Getting through school without a ton of debit is hard enough by itself, a car loan is just another burden on your shoulders at a time in your life when money is usually tight.

  2. My college didn’t allow freshman to have cars on campus. Thankfully public transportation was good and the school had shuttles. I also quickly became friends with upperclassmen who would drive me around and let me use their cars when I needed a ride.

  3. Great list. Public transportation is the way to go. Without it I probably would not have half of my salary. I wish anyone with this financial problem the best of luck.

  4. I have a friend who is going to buy her daughter a brand new car to go to college. She got a lump sump severance package after a layoff from work and she said she didn’t want to have to pay a huge tax bill. I advised her against it especially since she said she is currently living paycheck to paycheck. She really is better off saving that money as an emergency fund. I could not get her to see the mistake she was making.

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