How to come out WAY AHEAD when buying a used car

A recent comment from a valued Mr. Money Mustache reader asks something like this,
“I need a new car – we want a Honda CRV, but after looking at the used car listings, it looks like new might be a better deal, especially since it saves me from the need to put much money down”.

As a first note: NOOOOOOOOOO! Don’t Do It!!!!

This question is perfect, because it is exactly the same path many people go down when they end up with a new car. It’s even more perfect because the CRV is the best-selling SUV in the country right now, so many people make the exact same decision.

The car industry makes it very easy and convenient to buy a new car, and by comparison it takes much more legwork to really score in the used car market. How exactly do you buy a used car, without feeling like a sucker walking onto a used car lot and having the little fast talking slickster start harassing you? What if you don’t know much about used cars and how to take care of them?

Here are the steps I recommend, as a lifetime car addict who drives inexpensive cars but secretly covets every Audi and Volkswagen (and especially Tesla) that comes off the line. I love cars so much that I can identify any model currently for sale in the US (and give you all the stats on it), just by seeing a picture of one of its headlights or taillights. Even though I rarely buy them, I love shopping for cars.

Step 1 – Figure out what really is the best car for your needs
You might start with a certain model in mind (Honda CR-V in this case). Figure out what it is you like about this car. For the CR-V, you probably like the large interior space, easy loading/unloading of kids, combined with general Honda quality (it won’t break, it will have good resale, it feels nice to drive). You can start by reading up on the CR-V on a website such as MSN Autos or just doing Google searches for the model.

There you will also find a list of competitors in that category. In this case, the category is “small SUV”, so the competitors are stuff like Jeep Liberty, Ford Escape, Toyota Rav4. As with most Hondas, the CR-V is one of the best buys in this category.

But in South Florida, do you really travel on a lot of extremely rocky and steep mountain roads or deep snow? Or are most of the roads paved there? If so, maybe there is a way to keep the good attributes of a small SUV (interior space), while shedding some of the bad ones (high price, fuel economy rating of only 21/28MPG vs. your Civic’s 32/38MPG).

This fuel difference alone will leave the average person about $8300 poorer after ten years, and that is before factoring in bigger tires, larger amounts of oil, more expensive maintenance and insurance, etc.

When it comes to interior space, three things matter most: rear seat legroom, headroom, and cargo space.
Since your other car is a Nissan Frontier pickup truck, you’ve already got cargo space (and traveling across wild beach areas!) covered. So you might also consider a 2009 Honda Fit, Scion xD, Nissan Versa, or Toyota Matrix. These are all tall, roomy passenger cars with awesome hatchback designs that can easily hold 5 people and stuff in the trunk. If you want even more space, you can click on a Yakima or Thule aerodynamic roof box for only the times you need it – like family camping roadtrips and such. If you commute a lot, consider a 2004-2009 Toyota Prius at 50+ MPG, which also has a surprisingly large passenger and cargo area.

Step 2 – Figure out how much your car should cost used, and how NEW a used car you need.
If you drive a ton of miles, like 12,000 or more per year, you will cover 120k miles in 10 years. That means you should get a fairly new car so you can squeeze those 120 out of it without having anything break. So buy one with less than 60k on it so far. On the other hand, I only drive 4,000 miles per year. So I only need 40,000 over the next ten years. Because of this, I recently bought an older minivan for my construction business that already had 120,000 miles on it. After 10 years, I will still be at only 160k, well within the range of a Honda. As a result, my van only cost me $4800, yet for my purposes it is just as good as a new one worth over $30k.

For our example, let’s stick with the CRV. Because you deserve some luxury, let’s get you one that still matches the newest generation of CR-V. This generation came out in 2007, so I go to Edmunds.com and appraise the used value of a 2007 CR-V (midlevel EX model). Looks like the private party sale value averages around $15,860 in the Ft. Lauderdale area.

Step 3: Search your local Craigslist for Cars that Match
So in this reader’s case, we we look at the South Florida Craigslist for a Honda CR-V, specifying a price range of $10,000 to $16,000, and sort by price (very important, since some used car sellers have a very vivid imagination when it comes to how high a price to ask for their used cars!). You want to pick out a meticulous-sounding, wealthy person who has babied their used car and done all scheduled maintenance, yet is selling it cheap because they don’t really need the money. Dealers are fine too, as long as they have been around a few years and have a clear file with the better business bureau. Your best insurance is simply to get a car with the lowest mileage on the odometer. Here’s a link to a Craigslist search for your model. Looking quickly at those results, I see some of the 2005 models out there actually have really low miles, like 49k, and are only about 10 grand. That is still a beautiful Honda, and compared to buying a new one at 30 grand with finance and taxes, and including money compounding, it will save you more than $30,000 over ten years just to get this used one with 49k miles!

Keep your eye on this craigslist search for a few weeks and call/email any of the ads that sound especially fair, honest, and detailed (good pictures, etc.).

Step 4: Go out and Buy your New Baby
When you are ready to make an offer, type the exact year/mileage of the target car into the Edmunds used car appraiser again, and send the seller an honest offer explaining your reasoning. Do this before you even go to look at their car, to keep yourself in the strongest bargaining position. Then if they accept, you go thoroughly look over/drive the car and if it’s as good as they say, you buy it.

Regarding “saving” a cash cushion by buying a new car – Don’t Do it!!!  Any person over the age of 25 should definitely have a cash cushion large enough to live on for a few months AND buy a used car. But you don’t get a cushion like this by buying a new car on credit. That is financial suicide! Instead, think ahead ten years, when you will still have the used car you buy now, AND you’ll have an extra $30,000 in the bank because of not buying the new CRV on credit. AND on top of that, you’ll have an extra $450,000 or more in the bank because of regularly reading the Mr. Money Mustache blog and applying more of his principles.

As a final note, since I think you want a Honda Fit or Toyota Prius and not a Honda CRV, so you can become even richer, here are two pre-set Craigslist searches for those in South Florida too!



  • Chris from Santa Cruz August 9, 2016, 8:31 pm

    Hello MMM,

    I have a 2009 Subaru Forester that I bought new and would like to sell. I plan on replacing it with a 2005 toyota sienna with approx. 50k-80k miles.

    My reason for selling is that The forester has 142k miles now and is coming up on some more expensive maintenence.
    The suspension is feeling too bouncy for my back. Its actually painful to go on road trips now. To replace shocks and struts will cost $1000-1500. Also, the power sunroof is showing signs of premature failure ($700-1200 repair!)

    I can probably perform a DIY you-tube assist on the sunroof to get it working okay. Also. I think that only a really picky buyer would notice the diminished suspension feel…

    I want the minivan for three reasons:
    1) Starting a bike shuttling business- this is smallest feasable vehicle for this
    2) road trips/camping–more space for camping supplies, etc
    3) i tend to move once every 3 years, I always borrow my dads van..

    My subaru should fetch around $6-7k in this market (Santa Cruzians love Subarus)

    A used 05 sienna in the 60-80k/mi range goes for $6500-9500 in the SF bay.

    I will be paying cash out of my reserve fund, then plan on reimbursing it with sale of Subaru Proceeds.

    Does this sound like a MMM worthy plan?

  • Candace September 5, 2016, 10:04 pm

    Hi MMM! I have been a fan of yours for quite some time but have never *had the time* to read through all of your blog posts due to my *time sucking job* (hence my interest in your blog and retiring early). However!! Labor Day weekend has come and gone and I’d like to share that I spent it relaxing and mindlessly reading your life-changing articles since the beginning. Time well spent. I’ve had something on my mind recently… So I scrolled back to this particular post. Back in 2010 I purchased my first ever car. I had already had some tips given to me on never buying new and always paying in full (thank the heavens). So I bought a 2007 Mazda3 with 30,000 miles on it (for a price that I am now realizing was a price I shouldn’t have paid *cough* $14,500) however since I don’t want to sweat anymore over that one… Thankfully it was in full remember!! Woohoo! Let’s get to the point. It’s now almost 10 years old and has.. A lot of miles that I’ve put on it (139,000 to be exact). It appears as though I have screwed up here, having driven it cross country in my move last year and far too many trips to an ex-job that was… Too far away. Boy am I glad to have found your blog. Anyways. Though it otherwise looks brand new and shiny on the outside, it has recently needed quite a lot of repairs. New control arms and alignment, wheel barring replacements, new tires. Yikes. I started to think about selling it in a year or two, and putting that money towards a newer more reliable (but still used) and at least 2 years old and less than $10,000 car with great MPG. I guess what I’m asking here is… When would you say it’s time to sell? I know most people say “when the repairs become more expensive than the car” but what exactly does that mean and could you please maybe provide some actual numbers? Does it help any that I don’t have a car payment? (Minus car insurance of course and gas, which I am now viewing as a car payments in and of themselves). I would love to sell it altogether and just buy a bike (which I still plan to do) but unfortunately, though I live close to work, there is a pretty horribly unsafe neighborhood I have to cross through on my way in and I’m not quite sure yet that I can brave that. Though I am very very tempted. So, when would you say it’s time to trade-in for/purchase a new (used) car, if absolutely necessary? Or should I hold on to my Mazda3 forever despite repairs? Thanks a million MMM!

    • Mr. Money Mustache September 8, 2016, 11:16 am

      Hi Candace,

      Since the Mazda3 is a reliable and efficient car on average, it will usually be cheaper to maintain it (with a good honest mechanic), than to try buy reliability via acquiring a newer car. When you measure it on a per-mile basis, maintenance is much cheaper than newness, if everything else about the car is roughly equal.

      Think of it this way: your car is worth maybe $4000 on the used market. You want to replace it with something that is $8,000.

      How many miles of driving would it take to amass $4,000 of maintenance and (rarely) repairs? That covers a lot of driving (my 2005 Scion is still at well under $1000 in total maintenance costs at 90,000 miles), and remember that even the replacement car won’t be free to maintain.

  • Stuart November 28, 2016, 9:15 am

    Great article! I keep telling people to stick to used cars, pay them off quickly and then begin putting that money into an investment account for your next used car. It is possible to have enough cash flow within 3 years to make payments on future used cars for the rest of your life! For example. I paid off my previous vehicle 3 years ago, since then I have been putting my money into P2P lending and averaging around 9.49% return. I just bought a late 2014 used Prius with 40k miles off the Enterprise rental car lot for about $1,800 below market price for similar used Priuses. I negotiated a 3@ loan over 5 years and got my payments below $200/month while my LendingClub cashflow is just over $200/month. Therefore my car will be paid for with no cash out of my pocket.

  • Cody December 21, 2016, 8:49 am

    Hey MMM! Thank you for the article. I’d really appreciate your insight.
    I’m a business owner who can write off payments or use that money to put back into the business. I drive a 95 ford f150 with 360 thousand km. It still runs but is a ticking time bomb. I don’t need a truck for work. Is using financing to write of payments with a new small vehicle smarter than buying a 5-10,000 vehicle and having less of a write off? Thank you

    • Mr. Money Mustache December 22, 2016, 12:39 pm

      Hi Cody,

      I’d personally go for the efficient used car. Spending less money (and getting a small tax write-off back) is always better than spending more money just to get a portion of it back at tax time. There’s no magic in having car payments – you can write off a cash purchase just the same as the car becomes a piece of equipment on your business books that depreciates on a fixed schedule.

  • Zachary December 28, 2016, 10:35 am

    Moving into 2017 and this post is still so true.

    Four Key Words: BUY. WHAT. YOU. NEED. I was doing a car search, thinking to myself the entire time “hey, that’s in my budget”. Then I did a quick MMM search; one karate chop to the throat later, I’m getting myself into the vehicle that serves my purposes, not the one that bolsters my personal brand (or strokes my ego).

    Why would a single, childless man with a 60 mile round trip commute need a freaking SUV? He wouldn’t – plain and simple.

  • grisly_atoms January 1, 2017, 8:14 am

    I have a 2007 Toyota Prius that I purchased brand-spankin’-new with 42-month financing, in May of 2007. Bad idea to borrow for it, but I’d just moved from NY to VA and felt that I had to have A/C in the car for VA Summers, and my Pathfinder did not have it.

    The Prius had 1.9 miles on it when I took possession, and I’ve added every single of the 71,000+ additional miles it has now. Until recently, all of my commutes were less than 5 miles one way, so in other words, “short”. These are hard miles for a car. But I have had absolutely zero problems with this car. Never once had anything go wrong mechanically or otherwise, that wasn’t “operator error” :) My point is, if you are looking for a high-mileage car with great reliability, I recommend a 2007 Prius. Just the other day I went to KBB.com to find that it is valued at $4900. I would not sell it for twice that price!

  • Miaim February 19, 2017, 6:33 pm

    After listening to the Tim Ferris show, I visited :)

    Great blog – I think the point of the post is to think real hard before you make a decision on a car, which is a depreciating asset. If you are financially on top, I would say go for it. There are many unknowns with a car, especially when it goes over 10 years. The unknown factor on when things will break should be taken into consideration.

    We are in Australia and we have a system call novated lease. This cost less than purchasing a car outright. My strategy is to do a 10 year lease on the car (they won’t lease more than 10 years).

  • RBlake February 21, 2017, 7:19 pm

    My husband and I are in a bind financially we have recently made the decision to get out of debt and live a more frugal lifestyle and are struggling while reaping the benefits of such a lifestyle change. That being said the elephant in our room is a 2014 Honda Pilot that we still owe $22,000 on. We both think it might be best to sell the car and replace with something cheaper. Currently we can only afford to pay around $3000 cash for a new car. Not a wonderful position to be in. We both had 1 child when we met and since combining our households have adopted his 2 sisters. Bringing us to a family of 6, and recently we found out we are expecting. An important thing to note is we drive 20,000 plus (at least 1/2 of this is over mountain passes that can be under heavy snow/ice) miles a year driving all our kids back and forth to their other parents for their court ordered visitations. I need some sound advice on what we should do to get out of the mess we are in with our vehicle, because really we feel a little bit hopeless in making a decision that makes sense in safety and financially

  • Amy June 17, 2017, 4:59 am

    I live in NB, Canada. We are 30km from town and enjoy travelling the less busy ‘back road’. It isn’t salted and my current 2007 Ford Edge with heated seats and two wheel drive makes it in the winter pretty well but I’m thinking ahead for the next purchase. I have 2 kids now but maybe 3 soon which is why we like the large rear seat in the edge. Also, a big dog who likes the trunk area. I only go to town once during the week and so I need cargo space for groceries and other things like small furniture to sell sometimes.

    I think 4 wheel drive is something I would consider important for the next vehicle. I like the width and weight of the Edge although the breaks aren’t quite suitable. I consider heated seats a necessity but we are building a garage so maybe it wouldn’t be so bad if the car wasn’t completely cold or snow covered.

    Our goal is to get a camper to gut and renovate for family vacations so hauling something under 20′.

    I’d love to know your thoughts!

    (Hubby ownes a work truck but only 2 seater and no hitch).

    • Mr. Money Mustache June 17, 2017, 9:20 am

      Hi Amy – the Ford Edge is a semi-reasonable truck or occasional family hauling, but 4WD is generally a waste for on-road civilian vehicles. You might check out the Honda Fit though – almost as roomy as an SUV but burns only half the fuel. Also, much better handling which means safer transportation for your loved ones.

      What kind of snow tires have you been running on the vehicle so far? If the answer is “all season tires”, your winter life is about to change for the better.


  • Susana Vazquez Garcia August 21, 2017, 3:42 pm


    I live in Madison WI and have saved 13k to buy a car. I am looking for a Honda CRV or a Toyota Prius V. Would love the car to have a back up camera and navigation and low mileage. With my 13k budget, Craigslist only has older cars without those features, and if they have them, I cannot afford them. Your initial blog suggests Florida cars. Do I need to go to Florida to search for them and test drive them?. Is there a risk buying from Florida because of flooded cars? Does it make sense to spend on a flight there to buy a car?

  • Adam R. January 15, 2018, 4:26 pm


    Just discovered your blog, really like the work.

    I’m currently working on helping a friend buy a used car, and I want to get one off Craigslist. However, I do not feel comfortable myself checking the suitability of the car, as I’m not an experienced mechanic. Do you have a suggestion for how to handle this? Will most craigslist sellers allow me to take it to a trusted mechanic? How do I find a trusted mechanic?

  • Phil July 16, 2018, 11:07 am


    I just discovered your blog this past weekend. I allowed myself to get suckered into purchasing a new vehicle. I was doing well, I had a used Ford 2007 Focus that I held onto for about 8 years until someone decided to obliterate it at a stop light.

    I have an employee discount with GM, so between the memorial day sale, veteran discount, and GM loyalty cash back. I took home my shiny new loaded Malibu home with about 11,500 off MSRP. I justified it to myself because it was only 3k more than the comparable 2-3 year old versions I researched.

    I regret the purchase now, and with new car depreciation i’d still probably lose money even after getting a good deal. Should I just suck it and call it a life lesson learned, and not to repeat? Or should I unload the thing? I hate having a car payment.

    • Mr. Money Mustache July 18, 2018, 5:02 am

      Welcome Phil! Better late than never :-)

      Yeah, if you needed a loan to buy it, this Malibu is probably way too expensive for you. By unloading that Rapid Depreciation Machine, you can reduce the amount of punishment it will deal to you. I’d look for another 2005-2010 4 cylinder hatchback like a Honda Fit, Mazda3, Kia Forte5 or even a 2013+ Nissan Leaf if most of your driving is local.

      Most important of all is just driving less. As this article mentions, over the long run your costs add up per mile rather than per month.

  • wgarnsey August 11, 2018, 4:14 pm

    It is great to see that the comments forstill really great post are still being supported.

    Here is my dilemma. I am driving my workshorse 2001 Toyota Sienna (which I bought new and I will never do that again), it is at 215k. I drive it 300 miles a week and often max the cargo space. I am starting to get odd sounds and check engine lights. So I suspect we are closing in our some big repairs. The Craigslist market for this van in the SF Bay Area is $2500 and I figure if I want two more years of use out of it (I am waiting for 4th generation Sienna), I will need to put probably $2000 into repairs.

    What would a Mustachian do? Invest $$2~2.5k to get 25k more miles. Or sell it for $2500 and buy say a 2012 with 60~80K on it for around $14000? I am emotionally involved with my old van, so I can’t think rationally. It has never let me down.


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