Image of a mid-2000s vehicle parked in a driveway - for sale by a private owner.

How to Buy Used Cars Under $5,000

Updated January 1, 1 . AmFam Team

Wondering how to buy a reliable used car that won’t break the bank? Learn how to find reliable used cars under $5,000 with American Family Insurance.

It’s no secret — cars can get expensive. And if you’re trying to cut costs and stick to a monthly budget, cutting your car payment down to size can help you sock away a lot of cash. If this sounds like a good idea, it may be time to think about purchasing a reliable, inexpensive used car. 

Buying the right used car for around $5,000 is all about getting detailed service records on the car and sleuthing out answers when inspecting the vehicle with the help of a mechanic. How do you source reliable used cars that are going to last? Take a look at our answers — we’ll help you find the best cars for under $5,000.


10 Tips on How to Find Used Cars Under $5,000

If you’re looking for a no-frills ride to get you from point A to point B reliably, you don’t need to buy a new car. Finding the best used cars under $5,000 isn’t hard if you know what to do. These tips on how to buy a used car can help you find that diamond in the rough: 

Tip 1. Search for single owner cars — sold by owner

Try to find a private seller who’s owned the vehicle since buying it new. Low-cost cars that are high in miles typically last because the car’s been relatively well-maintained. You’ll find most vehicles owned and sold by a single owner are in relatively good shape. That's because they've been willing to take the time to care for their car and elect to sell it on their own to help ensure it goes to a good owner.

Tip 2. Search for base model vehicles

Although you may not get a V6 engine or satellite radio, there’s less to go wrong in a car with standard features. And that can translate into cheaper repairs and reduced maintenance costs. Luxury cars may be fun to drive, but they’re rarely fuel-efficient and can get expensive to maintain.

But don't discount your own needs. Look for used cars that have creature comforts and make your drive safer. Options like cruise control, power windows, a roomy rear seat and front wheel drive for better winter weather handling. Cars like the Honda Civic, with front and rear air bags and anti-lock brakes offer a lot of value for the money.

Tip 3. Get the facts on the car’s history

Educate yourself about the car by requesting a CarFax or another third-party vehicle history report. With one in hand, you’ll get details on the car’s accident and maintenance history. These reports are a great means to verify mileage of the car because you’ll be able to see many of the maintenance details. That little odometer reading can be cross-checked against the seller's service documents.

Another key reason to have a car history report is to help verify overall car value against others on the market just like it. Some reports fold in pricing data from Edmunds.com or Kelly Blue Book resale value database, which can help you understand whether the car your considering is priced correctly.

Tip 4. Search online carefully

Build a list of keywords for searching craigslist.org or carfinder.com that can help you find used cars under $5,000 worth buying. Think about your ideal seller, someone who’s taken great care of the car and paid for extra services that extend the car’s life, and search for cars with terms like:

  • Undercoated
  • One owner
  • Highway miles
  • No rust
  • Regular oil changes
  • Mint condition
  • All maintenance records
  • No accidents
  • Synthetic oil
  • Part of the family
  • Immaculate condition
  • Dealer maintained
  • Garage kept
  • Keyless entry
  • Electronic door locks
  • Cruise controls
  • Full size spare tire

Tip 5. Go for cars with highway miles

Used cars with verifiable highway miles are a better bet in many ways. They’ve typically seen less wear and tear than their city-driven counterparts. But even good used cars under $5,000 may have issues along the way — that's why it’s wise to pick up emergency roadside assistance coverage to best protect your investment.

To help verify highway miles, here’s what to look for:

  • Few signs of wear on the brake pedal
  • Stone chips on the hood and bugs in the radiator fins
  • A door sill that’s still in good shape
  • A driver’s seat that’s in good condition

Tip 6. Work with a mechanic and inspect the maintenance records

The best used cars to buy under $5,000 are those that were well-maintained over the years. Take the car on a test drive and stop by your mechanic to review the car’s condition:

  • Verify that the automatic transmission’s fluid levels are good
  • Remember: owners who keep all their service records likely take better care of their car
  • Have your mechanic perform a quick inspection of the car and ask their opinion on the car’s condition
  • Request a printout or email of all service documents directly from the dealer when possible
  • Ask if OEM parts were used during repairs and maintenance
  • Review tire rotation schedules
  • Verify that vehicle recalls are resolved

Tip 7. Choose cars that were dealer-maintained

The odds of good cars under $5,000 lasting several years are better when maintenance occurs at the service department of a dealership. Call the customer service department listed on the records and ask about the car — they may know the owner.

Be sure to compare the factory-recommended maintenance schedule against the owner’s records. If you’re looking at a single-owner vehicle, explore the terms of service on the warranty. Was just the powertrain covered or did the owner get extended bumper-to-bumper coverage? If so, the car might have been serviced more frequently because parts and service costs were covered under the contract.

Tip 8. Avoid cars with accidents

Vehicles that have experienced a collision can suffer structural damage or other hidden issues. And if the car’s been involved in a flood, electrical problems can emerge and cause real headaches. Look at the car history report carefully for details of damage and be sure to the car's title status. If the car is listed as a total loss, learn all you can about the damage before making any commitments.  

Tip 9. Estate sales are a good resource

It’s key to be creative when looking around for a cheap car under $5,000. One great way to find that a great used car is to look at estate sales — they’re a good alternative to cheap car lots or used car dealerships.

Tip 10. Japanese and foreign cars last longer

According to zebra.com, foreign-made cars (from Germany, Japan and Korea to be specific) typically outlast their American-made counterparts. But that gap in quality and durability is closing fast in more recent years.

The Benefits of Buying a Cheap Used Car

In addition to finding a great car that will last, there are other financial benefits when purchasing an inexpensive car. Here’s a quick look at a few more reasons to buy one:

  • Parts are typically inexpensive
  • Lower monthly car payment
  • Typically less expensive rates on auto insurance
  • Cheaper to maintain

Get the Right Coverage For Your Used Car

Finding affordable coverage is easy with American Family Insurance. Now that you’ve done what you can to keep your monthly car payments low, check in with your agent (Opens in a new tab) and request a quote on coverage that won’t break the bank. Better yet, get an instant auto quote right now! Just plug in a few quick facts about yourself your new ride, and you’ll have a quick insurance cost estimate in no time!

*Discount and savings amounts and eligibility will vary. Some restrictions apply. Discounts may vary by state, property policy form and company underwriting the homeowners policy. Discounts may not apply to all coverage on a property policy. Discounts do not apply to a life policy.

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    Not all driving distractions are created equal. As you can imagine, some forms of distraction aren’t as dangerous as others. For example, hands-free telephone conversations — although not recommended — isn’t as deadly as other modes of conversation while driving.

    The Deadliest Driving Distraction: Texting and Driving

    It should come as no surprise to you that texting is the most common distraction while driving as well as the most dangerous. It’s so deadly in fact, that it gets its very own section.

    It’s easy for us all to see the dangers of texting while driving, but even with that knowledge, so many of us fall into the temptation of sending off a fast text message while behind the wheel. But even a quick text can have horrible consequences.

    Just think, when you look at your phone, your focus is on the screen, not the road; one hand is off the wheel to hold your device, and your mind drifts to the message instead of the task at hand: driving safely.

    Why texting is distracting

    To put it into perspective, if you’re traveling at 55 MPH and you take your eyes off the road and onto your phone, you’ve traveled about 100 yards – the length of a football field! That’s quite a distance to cover driving “blind.”

    The National Safety Council reports that one out of every four car accidents in the United States is caused by a distracted driver who was texting. They also reported that texting and driving is six times more likely to cause an accident than driving while intoxicated.

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    Is it Illegal to Use Your Phone While Driving?

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    Types of Distracted Driving

    The first step to preventing distracted driving is understanding what it is. In a nutshell, anything that occupies your attention while driving is a distraction. Here are a few notable distractors that should be eliminated while behind the wheel.

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    Sifting through your music device

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    Checking social media

    Instagram, Snapchat, Facebook, Twitter, you name it – all of them bide for our constant attention. Don’t fall prey to this when you’re driving. That post, tweet, or message can wait. Avoid checking social media when behind the wheel.

    Eating behind the wheel

    You may be a pro at eating your burrito on the go, but ingesting your lunch while driving is a big no-no. All it takes is one wayward waffle fry to take your attention from the road to your lap. And it’s not just the mess that distracts; it’s the smell, taste, you name it – that makes eating one of the most distracting things you can do while driving.

    Other types of distracted driving

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    • Taking selfies
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    • Loud music

    Top 5 Ways to Prevent Distracted Driving

    There are easy ways to prevent distracted driving. Try using making these five simple changes distracted driving safety tips to have a safer driving experience.

    Use a text-blocking app

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    Have a passenger navigate for you

    If you’re driving with a passenger (of an appropriate age), hand the directions to them. Even a not-so-great navigator in the passenger seat is better than the person behind the wheel being responsible for both driving and navigating. If you’re driving by yourself, take the time to look at the directions before you set off. Then turn the volume up and let the AI lead the way.

    Make music selection easy

    Make multiple playlists that you can choose from before starting the car. If you really need to change it up, either pull over or wait for a red light. Set your presets to stations you already know you like. Hitting one button is better than cranking the dial until you find music you like.

    Don’t text while driving

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    Eat at home or while stopped

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    How Does Distracted Driving Affect Insurance?

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