We Are Tired Of Overpaying For Rentals And Want Something Affordable! What Car Should We Buy?

Liz and John live in NYC and haven't owned a car since college. Now that it is getting safer to visit family and do some road trips, they are looking to buy a vehicle and avoid the overpriced rental cars. With a modest budget and a lack of inventory, they are having trouble navigating the market. What car should they buy?

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Here is the scenario, from Liz and John:

My wife and I live in New York City and are looking to make our first car purchase. We really don't want to deal with financing and would prefer to be paid in full with our "pandemic savings" so looking to buy something outright – budget of approx $12,500 (would prefer a little lower, could go a little higher). We're new to the car game, so not sure how to approach direct sellers, what we should be looking for in used options, questions to be asking, etc.

For usage, this will mainly be a weekend car so we're ok with something just to get us point A to B. My in-laws recently bought a house in MA, so we will be doing some long distance trips throughout the year (6 or so hour trips) and need something reliable. Most weekends will be an hour or two drive, to get out of the city and find some nearby hiking. We prefer SUV/wagon/CUV/hatchback – we have a dog, so she'll be tagging along on most trips and we'd prefer the extra room. Sedans would be a fine second place option. This is not our car "for life" and don't know where we'll be or what we'll need in 2-3 years, so this is something just to get us by for a few years and could potentially be our second "family car" when we buy something new down the line, or maybe re-sell and try and get back a bit of that upfront cost. We may be getting a parking spot in our building, but most likely not, so we definitely do not need a "perfect" car for street parking in the city.

We've been ZipCar members for years and would prefer the cost to go to owning, vs. Zipcar which typically overcharges, doesn't have the timing we need available, older or dirty/smelly cars, etc. We've also rented (Hertz, Enterprise, etc) for longer term trips – like a weekend away in the Catskills, or up to MA, so we're definitely seeing a portion of our budget eaten up by these trips, and would prefer to own instead of these chunks of rentals that are really inconvenient (typically a couple hundred bucks a month). Brother also lives nearby and has been duplicating most of these rental car expenses, so would be nice to be able to offer to him instead.

We'd like something lower on the mileage spectrum, under 50k but preferably much lower, and just looking for best value for price – while noticing a real lack of inventory since the pandemic hit. We're also interested in hybrid options, though not tied to it.

Budget: $12,500

Daily Driver: Yes

Location: NYC

Wants: Higher ride height, compact, reliable

Doesn't want: Something too big for city parking

Liz and John, my colleagues are going to give you all kinds of good recommendations for vehicles to focus on, but I'm going to take a different approach than I usually do. I've actively shopped in this market and I try to avoid this price point for a key reason. Almost every dealership you encounter within the NYC metro selling a sub-$15,000 car is likely to embody every bad stereotype of car salespeople. Now that inventory is even more difficult and buyers are clamoring for cars, bad dealers have gotten even worse.

This is why I advise focusing on the sellers and not specific cars. You can go the private sale route and save a lot of games, but these transactions aren't always convenient and you would need to handle the tax and DMV on your own. The upside is most private sellers aren't looking to hose you, they just want a fair price for their ride.

If you choose to go the dealer route, this is where the danger zone is. I'm going to give you some general tips that may seem unfair to folks working in the business, but you aren't buying a car to make friends, you just want a nice car at a good price. First, avoid any corner car lots that aren't a franchised dealer with a major automaker. Any dealer that has ads targeting poor credit customers, is not where you want to be. Even if you go with a franchised dealer, some brands are often much better than others. Typically if you find a cheaper car at a luxury car store, those lots tend to be less of a hassle.

Look for stores that are aligned with large dealer groups, you will see names like Holman, Sonic, AutoNation. These types of dealers generally have "no haggle" used car pricing and are less likely to tack on a bunch of bogus fees aside from the tax and DMV. I would also strongly encourage you to cast a net well beyond the NYC metro. Look to NJ, CT, and even as far as the Philly metro. It may be a hike, but you will have a greater chance of finding a nicer car at a better dealer in these areas. If you are looking for a specific lead, here is a nice Kia Soul at a Mini Dealer in NJ. It has almost 70,00 miles but it is right in your budget.

You and Liz are going to enjoy car ownership very much, John. Especially after dealing with rentals and subscriptions that are convenient but not tailored to you, which sucks because it feels like paying for stopgap service. I've found a car that fits your criteria eerily well and would be a great match for the trips you've described. You need this 2015 Mazda 3 from the nearby Jersey Shore.

This Mazda 3 is a match for your budget at $12,500, and it's got a surprisingly low number of miles, sitting at only 36,000 per the ad. It's a private sale, which does mean you'll have to pay for a few more expenses to register the car, but a private sale also means you can make a counteroffer and still be within budget.

The car is a relatively recent Mazda so you're getting something reliable and with good fit and finish. It's a thrifty four-cylinder car and it's even got a solid paint finish! It's nice, but not so nice you will feel bad about street parking the sedan. OK, so it's not an SUV, and you will miss out on the rear cargo area but you'd be surprised how spacious a sedan trunk can be. Zoom zoom, John.

Tom has more experience than anyone I know buying cars, not just in the tri-state area, but across the country, so I would take all of his advice to heart. I would add: If you go non-CPO used, always get a pre-purchase inspection, which in the NYC area costs about $100-$125 but is more than worth it if any major problems are uncovered that would cost a lot more than $100-125.

And from someone who has street parked their car in New York City for over a decade: You are right, that size is important, as I've been able to squeeze my Honda Fit into spots over and over again that wouldn't accommodate larger cars. Like on Tuesday, for example, when I got back from a trip to the Catskills, and found a spot in my hood in Jackson Heights with about six-inches clearance on either end. And get a bumper protector if you care about such things, because people bumping other people's cars to park in New York City is routine (and accepted, just don't go overboard.)

Another thing to know: I'm not sure where you live in New York City, but parking can be hassle, though, depending on where you live, it varies pretty widely. Manhattan is almost all bad, so is north Brooklyn, so is Brooklyn Heights, so is Long Island City and most of Astoria, so is the south Bronx. It's not that you can't park in these places, it's that you might spend a couple of hours every week in your car for alternate-side parking. It's all a matter of tolerance.

As for the car itself, my Fit has served me well, and I would recommend that to you, too, but you are also right that used inventory is down, and especially for small, sensible cars in the NYC area, so you'll have to be flexible. Still, here's a 2017 certified pre-owned Fit with just over 25,000 miles for $13,495. But that is just one example; a search I did in Honda's CPO inventory turned up a few dozen CPO Hondas with 100 miles of NYC for under $15,000.

It also doesn't have to be a Honda, of course, but, if I were in your shoes, I would up your budget slightly and definitely go certified pre-owned no matter what you buy, since that gets you a warranty. Or, if you want to be "cool," simply buy a Mitsubishi Mirage brand new.

The used car market is really difficult for buyers right now, but there are some gems around if you look hard enough and jump on them quick enough. What better vehicle fits what you're looking for than a Honda HR-V? It's compact enough to where it should be easy to park on NYC streets. It has a raised ride height but is still car-sized and, with that Honda reliability plus decent gas mileage, you won't have to worry about repairs for a while.

This example I found is slightly over your price range but I'm sure you could talk them down. It's a 2017 with just under 25,000 miles (which tells me it was probably a lease so it's still under warranty.) for $12,995.