There’s no getting around the fact that a car costs a lot of money and that’s even after you’ve paid for it. If you don’t have a lot of money you might be wondering how to afford a car when you’re poor. There are a few things you can do to make it easier.
How to Afford a Car When You’re Poor
I went without a car for a number of years. All told, it was about four years. It wasn’t fun. I either walked to where I needed to go or rode my bike.
Living in Florida at the time, it was terribly hot in the summer months, and buying groceries was a real pain. I’d take my backpack and ride my bike to the grocery store and end up filling the backpack with bags and then have the extra ones hanging from the handlebars.
It was a sight. That’s for sure.
Eventually, even though I didn’t have a lot of money, I did get a used car which was really nice.
Having the Right Mind Set
Before we get into where you can find a car that you can afford when you have little to no money, let’s talk a bit about your mindset.
You need to have the right mindset before you start shopping or you will get yourself into a bad situation.
Keep Your Emotions Out of It
If you’ve ever gone to a car lot to consider buying a car, you know what I mean. You might have a plan before you get there, but then it flys out the window and you throw caution to the wind when you see the perfect car.
Now, instead of buying a car for practical purposes, your emotions get all tied up into the purchase and you just HAVE to have the car. This puts you in a bad position and could cause you to get yourself into a financial hole.
If you can’t comfortably walk away from the deal and the car, then your emotions are in the driving seat.
Keep Your Ego Out of It
This goes hand-in-hand with the last point. You need to remember that this car is merely there to help you get from point A to point B and nothing more.
If you start allowing your concerns about what it looks like, what features it has, and what other people might think about you driving it, then you will again end up with a car that is going to cost you a lot more than you can afford.
I get it. We all want a fancy, great looking car that we can show off, but if you don’t have any money, now is not the time to worry about looks.
Down the road, if your financial situation changes, then you can go find that car of your dreams. For now, you need to be practical.
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Where to Find a Car You Can Afford
First off, if you are poor and don’t have a lot of money, you should be looking to buy a car in the $3,000 range. This will ensure that you get a car that will run and that will last you for a few years.
You don’t want to have to be putting a bunch of money into your car or be in a position that you have to buy a new one a few months or a year or two down the line.
You can find cars as for as little as $2,000 that will still get you to where you need to go, but you shouldn’t buy anything for less than that.
You should be able to finance a $3,000 car for as little as $100 a month.
There are several ways you can find a car you can afford even if you don’t have a lot of money or even very little money.
Buy From Someone You Know
If you have a friend or family member that has a car they want to get rid of, see if you can buy it.
Chances are, the terms will be better and the car will cost less. Your family member doesn’t have all the overhead and other costs that a dealership does. They aren’t looking to make a huge profit on the car when they sell it.
Not to mention, they just might want to help you out, so they might give you a really good deal.
This is what I did when I went from not having a car to getting one. I bought my sister’s car when she was getting a new one. She was nice enough not to ask for a downpayment as I didn’t have one.
I just made monthly payments to her and it worked out fine. I had the car for about 6 years before I was in the position to buy a new one.
Go to a Police Auction
There’s a good chance that you can find a police auction near you especially if you live near a larger city.
You can find a lot of really good deals at a police auction. You will have to pay for the car in full, so keep that in mind.
Also, one possible downside is that you won’t be able to drive the car before you buy it and you may not even be able to look inside the hood.
A police auction is a good option for someone that can do some minor work on a car or if you have a friend or relative that knows something about cars.
Check Out Car Rental Companies
Care rental companies like Enterprise don’t just rent cars they sell them as well. They only use newer cars for their rentals, so once a car has a few years on it, they sell it at a discounted rate.
You can find some good bargains this way.
Just keep in mind that rental cars get extra wear as people who rent them don’t treat them as well as they would a car they own.
Other Considerations When Buying a Car Without a Lot of Money
If you don’t have a lot of money, there are some other considerations you need to take into account before you try to find and buy an affordable car.
Buy a Reliable Car Model
Now is not the time to buy just any car. You need a car that is reliable and you can drive for several years. You might want to consider one of the following:
All three of these models tend to last for a very long time and don’t seem to need too many repairs.
Don’t Forget the Inspection
If possible, take the car for a test drive and have it inspected. Sometimes this isn’t possible and you just have to do your best to get a car that will last, but if you can you should take it to a mechanic for an inspection.
This is true even if you are buying the car from a friend or family member.
You can usually get a pre-purchase car inspection for around $100.
Save Up a Small Downpayment
I know it might not be possible, but if you can start putting a few dollars, even your spare change, aside so you will have a small down payment.
Downpayments are typically required and you will usually need 10 percent of the loan you are financing. So, if you are buying a $3,000 car, you would need $300. If you can save up to $500 you would be in even better shape.
To find out how much car you can afford you can check out this Car Loan Calculator here.
Learn How to Negotiate
Some people feel weird trying to negotiate. If that’s you, you need to get over it. Every car salesman expects you to negotiate. It is part of the game and the prices they give you have that built into them.
Before you buy, take a few minutes to check out the Kelley Blue Book value or check out other car sellers such as Cars.com or AutoTrader to see what similar cars are selling for.
Can’t Afford a New Car – What Can I Do?
If you can’t afford a new car, buy used. It makes sense to buy used anyway because a brand new car loses a good bit of its value the second you drive it off the lot.
You can find good used cars at police auctions, rental car companies, and private sellers.
Why Do People Buy Cars They Can’t Afford?
There are a couple of reasons people buy cars they can’t afford. First, they let their ego do the buying. They are too worried about how they look to others.
The second reason is that they don’t account for all the car-related expenses when they buy a new car. They only look at the car payment. They forget about insurance costs, gas, maintenance, and repairs.
What Time of Year is Best to Buy a Car?
Studies show that December is the best month to buy a new car. Dealerships need to get as many cars off their lot as possible before the end of the year due to tax considerations.
That means they are willing to deal a bit more in December and you should be able to get the car for a lower price at that time.
What Happens if I Can’t Afford My Car Loan?
If you get into the position that you can’t afford to make your car payments, you should first call your loan company and let them know your situation. They may be able to work with you. It is in their interest to help you out, so you can continue making payments.
If you stop making your payments, your car will most likely be repossessed after a few months. You will lose the car and depending on the situation, you could also be sued for the outstanding balance after the loan company sells your car.
If you lose that lawsuit, and you will lose, it is possible that they will get a judgment against you and be able to garnish your wages to recoup the loss.
To Sum it All Up:
If you are wondering how to afford a car when you’re poor, there are several ways. You can check out a police auction, buy from a relative or friend, or see if you can get a deal through a car rental company.
Shoot for a car in the $2,000 to $3,000 price range that runs well and that you can drive for a few years at least.