MW After I totaled my car, I set out to find a used one for under $10,000
By Kat Borgerding
The average used car now costs around $26,000. Here's how I bought a Lexus for $8,000.
In this week's Don't Short Yourself, here's how I bought this used Lexus for just $8,000.
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This week we're talking about how to buy a used car when they're more expensive than ever.
After totaling my 2010 Toyota RAV4 at the end of 2024, I set out to find a used set of reliable wheels for under $10,000, without financing it.
Here's the approach that worked for me, and what experts say anyone trying to buy a used car for under $10,000 should keep in mind.
- Kat Borgerding
BIG MONEY IDEA OF THE WEEK: How to buy a used car today for under $10,000
It can be done, even though the average used-car price is around $26,000, and cars under $15,000 have been scarce since the pandemic. But it does require a ton of research - and managing your expectations.
First, I narrowed my search to familiar older-model cars. On the advice of a friend, I started exploring luxury brands associated with Toyota $(TM)$ and Honda $(HMC)$, namely Lexus and Acura. My family drove Toyota and Honda cars when I was growing up, so I already knew how long those vehicles can last when they're well-maintained.
So I started combing through listing sites like AutoTrader, Carfax and even Facebook Marketplace for cars in my area, and I was pleasantly surprised to find that prices for the luxury makes were comparable to the parent brands for the same model year.
Lauren Fix, an automotive analyst and host of Car Coach Reports, agrees with my approach, since used cars under $10,000 usually come with high mileage and are well-worn. "I would stick to brands we know and love," she suggests. "Toyota, Honda, Nissan, Subaru. You probably also would do pretty good with Mazda $(MZDAY)$."
Fix recommends having a mechanic look at any older vehicle you're interested in buying. "Whatever you find, whatever it may be, take it to your favorite mechanic and ask them for this: I need a green, yellow and red checklist."
And if anything falls into the "red," then walk away and don't buy the car, she says.
I also leaned on people who know cars. My dad and brother, both engineers who do most of their own car upkeep, helped me understand what maintenance issues to look for.
I then learned how to read a Carfax vehicle-history report to check for past maintenance problems. That kind of homework matters, says Joseph Yoon, a consumer-insights analyst at Edmunds. He says used cars under $10,000 have become harder to find and are now typically older than was the case before the pandemic.
Buyers should look up common problems for specific models and be prepared for the added cost of potential repairs.
"One of the nice things about buying a car this old is that, if there are issues with that vehicle, it's well-documented," Yoon says.
"There are so many things that most of the time don't go wrong in a used car," Yoon adds. "But when they do go wrong, it can be catastrophic." His advice is to really get into the nitty-gritty of what might go wrong with the vehicle and how much repairs might cost.
I ended up purchasing a 2007 Lexus RX350 with 130,000 miles on it in December 2024 for $8,000, which I was able to pay in full. Not bad considering the average used-car price in December 2024 was around $25,000.
Yes, 130,000 miles is pretty high - but it's not bad for a Lexus. To determine how many miles are considered "good" for a used car, I followed the conventional wisdom of dividing the total mileage by the car's age and looking for a car that had been driven less than 10,000 miles a year. This 2007 Lexus easily passed the test. And since Toyota-made cars can typically run into the 200,000 to 250,000 range, this car should still have a lot of life left.
After a few rounds of negotiations with the dealership about the cost of swapping out spark plugs - and refusing to pay extra for add-ons like window tint - I asked my salesperson to go with me to have the car independently inspected. It took about an hour and cost me $200. But it gave me peace of mind to know that, even at almost 20 years old, the car was running just fine.
So what are the trade-offs in buying a $10,000 car? The biggest win is obvious: avoiding a hefty monthly payment. With the average monthly car payment running between $500 and $700, buying an older vehicle outright can end up saving you thousands of dollars a year.
On the flip side, older cars usually come without modern features, including lane assist and a backup camera. You will likely also spend more on maintenance. I've had to pay $1,000 for a new alternator for my 2007 Lexus. That said, it was still much less than sinking thousands into monthly car payments over the course of a year.
In other words, buying a well-researched older car can be a far smarter option than financing a newer one.
Now, I know not everyone will feel comfortable driving an older car like mine. But even if you prefer something newer - say, a five- to 10-year-old car - buying used can still help you avoid years of car payments.
As Edmund's Yoon puts it: "I think it really does come down to, what is the best car you can afford?"
And for me, I'm just glad my hard work helped me get a car without putting my bank account in reverse.
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MYTHBUSTING: Banks won't finance a car that costs $10,000 or less
In my car-buying journey, several dealers told me the same thing: that banks won't finance a car that costs less than $10,000.
But that's not necessarily true.
Ted Rossman, a Bankrate analyst, says buyers can often finance lower-priced car purchases through different types of loans.
A personal loan may fit the bill for something under $10,000, Rossman says. Depending on the strength of your credit score, lenders can offer rates comparable to a conventional auto loan - although be warned that a personal loan could also come with a considerably higher interest rate, depending on your credit score.
For example, the interest rate on a 3-year auto loan for a used car can range from 6.5% to 15%, whereas a personal loan can start at 7% and go up to 35%, according to Bankrate.
Some banks offer loans with $5,000 minimums. Credit unions and some fintech lenders, like Upstart, may also offer lower-value loans. Rossman suggests shopping around for a loan before making an offer on a used car, and exploring your options. A personal loan is unsecured debt, so sometimes borrowers have to pay higher interest rates than if the loan were tied to a home or a car.
"I do think credit unions and fintechs could be your friend here, because they often have better terms, and they're also willing to lend to a broader spectrum of people," Rossman says.
Personal loans also offer the advantage of being quicker to obtain, Rossman points out.
"You can often get the money within 24 hours," Rossman says. "So if you are buying a car on Craigslist or you need actual cash, that can be an option."
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-Kat Borgerding
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March 17, 2026 09:51 ET (13:51 GMT)
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