Vehicles are the second-largest purchase many of us will ever make behind a home.
It’s understandable if buying a car for yourself is a big deal to your wallet. But if you have children who also need vehicles, it can be even more challenging.
Is there such a thing as a cheap, reliable car that a parent can afford to buy for a child? That’s what a listener of the Clark Howard Podcast recently asked.
Is There a Reliable, Affordable Car That You Recommend?
What make and model vehicle can I buy for my child without shelling out many thousands of dollars?
That’s what a listener wanted to know on the July 20 podcast episode.
Asked Lou in Nevada: “I’m looking for an older, reliable car for a student that they can purchase with cash like I did when I went to college. I bought one for $700 cash. Parents cannot pay thousands for cars, even for themselves.”
Lou may be a little nostalgic and wishful in looking for a reliable used vehicle that costs less than $1,000. As of the latest data, the average used car costs $27,266 right now — up about 38% from the pre-COVID average despite moderating somewhat.
Those prices will “never return to pre-pandemic pricing,” according to Business Insider. Right now, new car prices seem more on track to trend down in price. But Clark thinks the car market will get more affordable in general in the second half of this year.
Still, there are always deals to be found.
“The only opportunity to find something that would be somewhat affordable for a student is to look for what’s known as an orphaned car,” Clark says. “A discontinued brand name.
“Saturn. Pontiac. Oldsmobile. Models that are completely unloved. If the commmute is short for a student, the first-generation Nissan Leaf would be an example. An older Chevy Bolt would be an example.
“You’re looking for a vehicle that the model no longer exists or the nameplate no longer exists. It’s got to be older, a lot of miles on it today.”
Reliable and Cheap Are Sometimes in Opposition
When you create a character in a video game — a basketball player, for example — sometimes you have a finite amount of points to divide among skill sets (passing, shooting, dribbling).
The reliability and price of a used car are similar. Especially if you’re looking for rock-bottom prices. You can’t exactly run up the reliability to the 99th percentile while you push the price to the 1st percentile.
“You said [you want] reliable,” Clark says. “The problem is the age of the vehicle you have to buy to get the price way down is going to be older … with enough miles on it that ‘reliable’ would be a question mark.”
Used Car Prices Remain Stubbornly High
We’re far removed from the absolute mania in the used car market during the height of COVID-19 disruptions. So you may expect prices to be returning to “normal.”
“Normal” may not be what you’d expect, though, as Clark explains.
“I look at what’s happened with used car prices over these three years since COVID and it’s a stunner. I mean, there are so many factors that are involved,” Clark says.
“It’s weird because you may recall early in COVID, the summer of ’20, used car prices inflation-adjusted hit like an all-time low. And then they boomeranged for particular factors involving the rental car industry and production problems for new vehicle manufacturers. And the prices went bonkers.
“Even though they’ve come down some, used vehicle prices are still really, really high.”
Final Thoughts
Despite an average price tag of nearly $30,000, you can find a used car at a rock-bottom price.
Just don’t expect it to be the most reliable. That’s the tradeoff for purchasing an old car with super high mileage in order to get the price way down.
You may be able to find value by chasing after what Clark calls an “orphaned” brand that’s no longer in production.
