More cheap used car purchase advice

John Avis by | November 24, 2011 | Used Cars Automotive

I have a confession... I kind of enjoy buying used cars, the negotiation process, and restoring used cars.

If I could have my way I would be in a constant cycle of sell current car, shop for new car, restore new car, and then back to the beginning again. And I'm happy buying cheap older cars as more expensive newer cars don't tend to need too much work. The reality is that selling a car is often time consuming and not fun, and buying a car can also take some time, and I don't want to be without a car.

If you've read my other posts you already know my negotiation tactics, which if I do say so myself, worked very well in my recent experience. So based on my experience here is some more advice about buying a real cheap car (around $3,000 or so).

Choosing what makes and models to look at

There are so many different models to choose from in this price range but the wrong choice could cost you a lot if something goes wrong. And some models will require much more expense to maintain and/or insure.

The engine

I always prefer to choose a model that has a timing chain rather than a timing belt. Timing belts need to be replaced regularly (some models in as little as 50,000km, some up to 120,000km) and replacement is usually at least a few hundred dollars (often $500+), mostly in labour and all the parts that the mechanic says you should replace while you are in there. Timing chains aren't perfect but generally last the life of the car.

If you are trying to keep maintenance and repair costs down then you want an inline 4 cylinder engine. "Vee" and "flat" engines have two of a lot of things that inline engines only have one of so many jobs might require twice the expense.

Research is very important as there are some engines you really should stay away from. For example, see how any people are complaining online about premature timing belt failure on their Holden Vectra, or the number of people wanting Kia to recall a certain model Carnival because engines are commonly requiring replacement after only 50,000km.

The model

There are some surprising luxury European models at this end of the market. In Australia it seems that some makes are real hard to sell at ten years old or more so are advertised at what appears to be amazing low prices. We've all heard the advice that European cars are much more expensive to maintain and I agree to a certain extent.

The smaller the volume of the brand sold in Australia the more expensive they tend to be to buy parts and service. I believe this is because with the smaller brands there is less demand for other companies to bring in parts so less competition. The higher volume brands, like BMW, whilst still expensive if you get your parts and service from a factory dealer, can be better as there is often many sources of parts.

The important thing if you do go with a European luxury brand and want to save on running costs, then you have to be careful where you get your parts and service. As the past owner of several BMW's I found someone to do repairs that doesn't mind if I supply my own parts, and I shop around for my parts, often buying from overseas.

If you are not going to do your own servicing or don't want to go to the extra lengths required to find parts and service then I would suggest you steer clear of the European luxury "bargains" at this end of the market.

The safest bet is to look only at models that sell in large volumes, which is usually Australian, Korean and Japanese cars like Commodores, Falcons, Magnas, Camrys, Corollas, Lasers, etc, etc.

The funny thing about the cheap used car market is that it seems that the more expensive when new larger models depreciate much more than the cheaper smaller cars. For the same price you generally get an older Corolla for the same price as a Camry. See for yourself, compare Commodore/Astra, Falcon/Laser, Mazda 626/323, etc.

Also keep in mind that the heavier the car, the more expensive registration renewal is (in NSW at least). The difference in price from the lightest to the heaviest is more than $200.

Here are some of my comments on popular models

Commodore/Falcon: These were the top selling cars of their time. They are plentiful, so there is lots of second hand parts and new parts to choose from. They both have timing chains in most variants and are old technology so can cope better with a hard life.

Magna: Great car for many reasons but how often do you see a ten year old Magna that isn't leaving a trail of oil smoke. The 2.6-litre four has a timing chain but all others have a belt.

Camry/Corolla: These models have really earnt their reputation for reliability and longevity. Most models in this price range have a timing belt.

Pulsar: Unlike most other small cars, the Pulsar has a timing chain.

Vectra: Some models have lots of reports of premature timing belt failure and Holden have significantly lowered the replacement interval because of this. Be careful.


For this sort of money it may not be worth paying for fully comprehensive insurance, but not having third party property (not just a greenslip) is just irresponsible. Third party property might cost around $150-$300 a year but if you have an at-fault accident it could save you a lot.

For any insurance the model will be one of the determining factors in the cost of the premium. All of the insurance companies provide quotes online so it is easy to compare a few of the models you have short-listed.

This brings us to the topic of a modified car. I generally steer clear of them. Insurance companies will either not insure or charge more for modified cars. Even non-standard wheels are a problem for some insurers. Plus modified cars are more likely to have suffered a harder life.

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