We Bought Another Used Car With Cash

Back in 2009, with my wife pregnant with our first child, we were in the market for a larger car.

Unlike most people though, that didn’t mean we were heading down to the new car dealership to get buried under $40,000 of debt for the next 5 years.

Realizing that paying cash for a car was a much smarter financial move, we had been saving up in preparation for this day.

(Did you know you can save up cash pretty easily when you live on a budget and destroy all your debt? Bonus lesson: Do a budget and destroy your debt!)

So this is the story of how we tracked down, got a great deal, and paid cash for the second time on a great used car.

Getting Started

After years of quality service, we finally had to retire my wife’s loyal ’99 Hyundai Elantra. She was a good car but was finally getting to the point where the maintenance cost was starting to creep up a little more often than we preferred. 

Having just replaced the cooling system and radiator, we listed the Elantra on Craigslist.

Valarie’s ’99 Hyundai Elantra. Thanks for all the memories!

Less than 24 hours later it was sold to the first family that came and looked at it. Boom!

Cash in hand, we quickly started down the path of finding a replacement.

Our path always starts on Craigslist, where I had found and eventually paid cash for my ’99 Jeep Grand Cherokee just 6 months previously.

A flower. And my ’99 Jeep Grand Cherokee.

Our only real criteria for Val’s next car was that is was a reliable car, cost less than $8,000, and would last us another 4 to 5 years.

Some quick sleuthing on the Internet showed us that our budget would likely prevent us from getting anything newer than a 2004 model, so that meant we were looking for a car at least 5 years old that would reliably last another 5 years.

Pardon if we judge, but that pretty much eliminated most American made cars.

Our first thoughts had us leaning towards the Honda CRV and the Toyota RAV4, the two smaller SUV’s made by their respective manufacturers.

We really liked the utility aspect of these vehicles, clearly indicated by the U in SUV, as well as the cargo space available for all the new baby accouterments that were soon to enter our lives.

Hands-on Time

Though we were looking primarily on Craigslist, in order to get some hands-on time with each vehicle, our first physical stop was at Carmax.

We knew that Carmax usually sells used cars that are only a few years old, meaning they were likely out of our price range, but we weren’t going to buy a car, we were going to experience the cars.

We first looked at a 2006 Honda CRV.

The outside was well proportioned and masked reasonably well how small it actually is on the inside.

Upon sitting in the driver’s seat though, I immediately felt like I had been propelled back in time to 1988. The blocky dashboard had a definite 80’s feel. Not to mention the complete lack of a center console screamed “mini-van” right from the start.

Then we both hopped in the backseat only to discover the most uncomfortable sitting position known to man. Sitting in those seats longer than 10 minutes should qualify as extreme torture and outlawed by any sane government. Tsk, tsk, Honda, tsk, tsk.

Though the 2006 Honda CRV was out of our price range, we felt pretty certain that the interior design wouldn’t magically be more modern in an older version of the vehicle, so the CRV was definitely out.

Yeah, no thanks, you boxy thing.

Next up was the Toyota RAV4. Now it may have been the stench left on us from the CRV, but the RAV4 was a very refreshing experience. Much better angles in the body design and the interior actually felt like it was made in this decade. (Hey, look, one of them new-fangled center consoles!)

Very appropriately, the RAV4 was priced higher than the CRV. The backseat was only slightly more comfortable, but I suppose our expectations were set a bit too high for a compact SUV. 

Despite the horrid 80’s interior of the CRV, we decided to test drive both cars for comparison, and both actually felt good, with little to differentiate between the two.

The only real difference was that we both felt awkward driving around in the CRV like everyone could see the poorly conceived cockpit that surrounded us. Of course, they couldn’t, but we wished we couldn’t either.

One thing we love about CARMAX was the no-hassle salesman who was helping us. He was very polite, let us drive to our heart’s content and showed us the door on our way out without trying to chain us to a desk and cram a car down our throat — practices we are more accustomed to from other used car dealers.

To The Internet!

After deciding that the Toyota RAV4 was the better vehicle for us, we spent the next several days scouring the internet to see what was available.

We were hoping to find a nice used car from an individual, as better deals are often available from individual sellers, but there were none listed in our price range.

We did find a Toyota Highlander, the larger Toyota SUV, that looked promising at a small used car dealership on the northeast side of town.

We both liked the Highlander, but assumed it wouldn’t fit our budget…but this one seemed to be hovering right above our sweet spot, and we were sure we could haggle the price down a bit.

So a few days later we put on our smooth-talking safety helmets and rust-proofing-proof goggles and trudged out to do battle at the aforementioned used car dealership.

Have I got a deal for you!

Used Car Stealerships

We saw the car as soon as we pulled into the parking lot and it looked good.

A smooth-talking salesman sidled up to us within seconds to provide assistance.

We hopped in and took it for a drive, and it drove well.

But we don’t just take our feelings at face value when it comes to purchases this large. We asked the salesman if we could take it to our mechanic to get a pre-purchase inspection and thankfully he agreed.

We drove straight over to our mechanic who found some worn out bearings in the front wheels to be the worst issue. (It was an all-wheel-drive model, so that made the repair a little more costly).

Just enough negotiation bait, we thought, to help us lower the price where we wanted it.

Back at the dealership, we walked into the salesman’s cramped office at the back of a doublewide trailer. We explained our mechanic’s report, talked about or budget, and made our offer. He went to his manager’s office for several minutes and came back with his very best offer….$1,500 higher than our offer and almost $2,000 higher than the Blue Book value.

That must be some new kind of negotiating tactic. We tried to negotiate for something lower, but he wouldn’t budge. We told him financing wouldn’t be a problem because we would pay cash, but he still wouldn’t move on the price.

That seemed odd, but it made our next decision very easy. We kindly thanked him for his time and left.

We came home a bit confused and realized we left without our nonsense-price-deflecting spandex. Live and learn, right?

Things Will Get Better

Next on the list was a large Toyota Dealership just off the highway.

We found 2 RAV4’s and 1 CRV that fit our price range. We struggled with putting the CRV on the list, but we thought since we were out there we should at least take a look at it.

We first drove the 2003 RAV4, which was quite a bit different than the 2006 RAV4 we drove at CARMAX. It was still a decent car, though a bit less refined than the ’06.

It had very low miles for a 7-year-old car — only 60k – but something in the steering wasn’t right when we got on the highway. The salesman suggested just a minor wheel balancing issue, but wouldn’t they have fixed that before they tried to sell it on the lot?

Next was a 2005 RAV4 with 103k miles. This one actually felt and drove much better. I would say good enough to buy, but then the oil light started flashing as we were test driving it. Perhaps just a low oil warning, but as we were pulling into the dealership the check engine light came on.

I think I heard the salesman eek out a muffled whimper from the backseat as he felt his sale slip away. 

Car 3 was the CRV. Again, things looked decent on the outside, but just as we opened the driver side door Wham! and feathered hair and neon stretch pants all came rushing out. (Wait, were neon stretch pants in the 80’s? Either way…not the kind of experience you want every time you get in your car.)

The salesman did show us that the backseat reclined, eliminating the 90-degree-angle-seat-of-death we experienced at Carmax. (No-hassle Carmax man missed the boat on that one.)

Unfortunately, this neat feature in the back did little to rectify the travesty going on in the front. If Lionel Richie ever needs a sweet ride to cruise the strip…the 2003 CRV is ready to soft rock! 

Patience Pays Off

So after only a week of being a one car family, Val was clearly fed up with having to drag my butt to work every morning, and then cut short her “summer vacation” every night to pick me up.

But we knew we had to be patient. There was a great car out there somewhere. We just had to be willing to wait long enough for it to appear.

Then, one day, there was a new listing on Craigslist.

It was a 2002 Toyota Highlander. It was in New Braunfels, about 45 minutes away, and was priced just right. So we called up the owners and scheduled a time to go look at it at a large gas station between our respective homes.

Before going to meet them, we pulled up the CarFAX report based on the VIN number and notice that it only had 1 owner and no record of any accidents. All good signs.

In the gas station parking lot we got to check it out and it was very clean, and well kept. The owners were a retired couple who had just moved here from San Jose, CA just 3 months earlier.

After checking everything out, we took it for a test drive and it felt great. Better than most of the cars we had driven so far.

Next, I asked if we could have our mechanic look it over, but they weren’t comfortable making the 45-minute drive each way to our preferred mechanic.

Instead, they suggested a local Toyota dealership up the road closer to their house.

That was a bit more driving for us, but it was worth it for a great car, so I called the dealer and set up the inspection for the next day.

A/C or No A/C. That is the Question.

The next day, we met them at the dealership where the inspection took about an hour.

In the meantime, we got to chat with the couple and learn a bit more about them, as well as ogled and played with all the fancy new Toyota cars and trucks on the showroom floor.

When we finally heard our name, we headed into the maintenance office where one of the staff members read us the verdict.

There were several routine maintenance items that you would expect from a 7-year-old car, but the doozie was the need for a new circuit panel behind the A/C temperature knob. Apparently in ’02 and ’03 Highlanders, the wiring on the circuit panel wears out and starts sending the wrong signal to the thermostat. Oops!

Price to replace the circuit board? $900. Ouch!

Now remember, this was June, in Texas, and my wife is pregnant with our first child.

Contrary to popular belief, I am not an idiot.

The potential for the A/C to not work was an issue that was going to have to get addressed.

But this wasn’t a mechanical issue, so it wasn’t an automatic rejection of the vehicle. It was just an opportunity to negotiate a better price.

Negotiating A Fair Price

Other than the A/C knob thing, we really liked the car.

The owner was already asking a few hundred dollars below Blue Book value, so he wasn’t trying to make a mint.

I shared with him that we would definitely have to get the A/C knob fixed, but I wouldn’t do it at dealership prices, so instead of costing $900, I suspected I could get it done for around $500. I asked if he would be willing to take another $400 off his already low price to help us pay for that repair.

That brought the price down to $7,000.

He talked it over with his wife and came back shortly and agreed. We were able to get a larger SUV than we originally thought we could afford that was in great condition for $1,000 less than our budget.

We found our great deal.

Swapping the Cash for the Title

The owner asked how long it would take us to get the money and I informed him that we had the money in the car with us right now.

That definitely caught him off guard as we probably didn’t look like the kind of people to be driving around with $8,000 in cash with us.

He mentioned that he had left the car title at home, and asked if we would mind following them on the 10-minute drive back to their house to get it.

Now, normally I would not recommend following someone back to their home, but we had really gotten to know this retired couple and they were really sweet.

If I ever get beat up and robbed, I would want it to be by a sweet older couple like them, so we agreed to follow them back to their house.

Back at their house they invited us in and offered us something to drink. I handed over the money and the husband counted it out on the kitchen table, twice.

His wife shared how she was retired military and how they left California because “it’s just getting too crazy out there!” (Noted.)

They chose to retire in Texas for the low taxes (less than half what they were paying in CA), the warm weather, and the beautiful hill country.

She also shared that they were selling the car because it was getting too old for them and they simply didn’t need 2 cars anymore.

We got to chat with them for a good 20 minutes while we went over all the paperwork and made sure we had all signed in the appropriate places.

We finally said our goodbye’s and I jumped in my Jeep and my wife jumped into her new Toyota Highlander to head home.

My 2002 Toyota Highlander
My wife’s beautiful “new” car.


This purchase was back in 2009. Since then, the Highlander has transitioned from my wife’s car to become my daily driver, now 18 years old and still running like a champ. (Turns out “too old for them” has meant an additional 10 years of solid driving for me!)

In 2015 we went through this process again paying cash for a 2009 Toyota Sienna minivan we found on Craigslist prior to welcoming our 3rd child into the world. No surprise, but we ended up getting a great deal on that vehicle as well.

Oh yeah, and remember that A/C knob that was going to require a new circuit board for $900? We decided to wait to repair it until it completely failed.

Today, 10 years after buying the car, it still hasn’t failed.

It turns out some older cars are a lot more reliable than people think.

Remember, living debt-free looks very weird. Paying cash for cars? Who does that?

Rich people. That’s who.

Some are just rich enough to buy a $3,000 car. Others are rich enough to buy a $30,000 car. But both are making smart money choices that will affect every aspect of their financial lives.

What you’ll often find in the real world is that some of the nicest cars on the road are driven by some of the poorest people.

Don’t be one of them.

You’ll be amazed what you can do when car payments completely disappear from your life.

Remember: Don’t try to look wealthy. Be wealthy.

I’d love to hear about your car buying experiences. Have you ever paid cash? Do you have a preferred website or dealership? Let me know in the comments what has worked best for you.


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