Used car market is much bigger scale comparing to new vehicle sales. One car can be resold at least couple or even a few times for the price significantly lower than it was originally bought in a new condition. There is always a customer for inexpensive used cars, but before buying cheapest vehicle all advantages and disadvantages should be adequately evaluated. Purchasing well maintained older auto might be a perfect solution on a low budget. But getting a car simply because of lowest cost regardless its quality is not wise decision what might lead to losing initial investment even thought it might be very small.

Resale value

Not all cars will equally retain its value overtime. After purchasing new in a first three years cost of car will decrease as much as 40% – 60% from original price. Overall and mechanical condition particularly as well as car brand are two main factors which will determine resale value. Vehicles from major auto manufacturers like Toyota, Honda or Nissan might still be not the cheapest even is used condition and after manufacturer power train warranty expires.

Initial car price

Depreciation would definitely affect any vehicle, but everything good to analyze in comparison. Luxury models and additional option will keep the cost higher. Two years old Acura RDX still will be nearly same price as base model of Honda CRV in a new condition. Paying for navigation system, leather interior and luxury is not a solution while looking for a savings.

Cheap or reliable

Buying used car based only on price might not turn into any savings. There is always a huge risk while shopping for older autos. Before finalizing a deal any used vehicle should be professionally inspected to minimize the possibility of future loss.

Vehicle condition

Make a judgment about car value base on visual appearance is completely wrong approach. Eliminate scratches on bumper or clean interior professionally might cost from couple to few hundred dollars and most of all it won’t or very little affect the longevity and performance of a car. But what is under the hood, transmission and dozens of other “invisible” systems which make the vehicle move and function properly might be extremely expensive to fix if anything will go wrong.

Finance options

Available cash for purchasing a car will give more flexibility and while negotiating the price with a private seller you can even get a better deal. Even with low interest you still overpay and 0% finance on used car normally is not a type of a deal can be offered even to a buyer with excellent credit history.

Odometer reading and vehicle age

Car mileage will affect the cost tremendously. Ones manufacturer’s warranty expire the costly repair is fully buyer’s responsibility. Significant price reduction of most cars after first five years or 60,000 mi. can be partially explained by powertrain warranty expiration. Even though risks are higher, normally cars from most well known auto manufacturers will easily go over 100,000 miles with no major repair required if maintained well.

Used car prices comparison chart (some popular models).

Year	2012	2007	2002
Miles	New	65,000 - 70,000	120,000 - 130,000
	$15,100 - $15,900	$8,500 - $9,100	$3,600 - $4,500
Honda Civic (4doors sedan)
	$29,800 - $31,300	$13,800 - $14,600	$4,200 - $4,900
Nissan Maxima
	$22,100 - $22,500	$12,700 - $13,900	$5,100 - $6,800
Jeep Wrangler (2D)
	$24,000 - $24,700	$11,700 - $13, 800	$4,100 - $5,200
Toyota Sienna
	$22,600 - $22,900	$7,800 - $9,900	$2,100 - $2,800
Ford F-150 Regular Cab (2WD)

Cost of a car

Prices in the chart are for base models. Vehicles equipped with additional options will be more expensive.
Car prices changing constantly and depend on many factors, but the main point that buying 5 – 6 years old auto might be much more reasonable solution when budget is low. Getting a loan on more expensive new vehicle if you have cash on cheaper used, but still reliable car is not a wise decision.