There was an article in my hometown newspaper on an 18-year old woman who felt she got ripped for buying a used car for $1000 and then discovering it had major mechanical problems, which is why I offer advice on buying a $1000 used car. I don't want you to feel ripped off.

A little bit of the back story: the consumer columnistat the Hartford Courant, Kevin Hunt, told the tale of a young woman who saw a 1996 Chevrolet Corsica advertised on craigslist, went to a local used car dealer to test drive it, and returned the next day to buy it.

She was then surprised when it developed mechanical problems and discovered it would never pass a safety inspection. Ultimately, after getting a TV station involved, she got her money back (probably because the dealer has multiple complaints filed against it).

According to the article, the way I recounted the story reflects the preparation the woman took before buying the used car: exactly nothing beyond the used car test drive and it appears she didn't know what she was doing even then.

The $1000 used car is going to be different than any other used car on the market because there is going to be a low profit margin. No independent used car dealer of any volume is typically going to sell these because there is little money to be made on them. You will never see a $1000 used car on a franchised used car dealer lot (i.e. at your local Ford dealership).
How to Inspect a $1000 Car
Because of the low profit margin, little if any work will be done on these cars beyond the cosmetic to get them ready for sale.

Here are some specific things that need to be done to inspect a $1000 used car.

1. Check the tires first Look for uneven wear or tread that barely exists. If it exists, you're going to need to replace the tires if the seller won't. That's an additional expense that needs to be factored in.
2. Check the alignment Easiest way to do this is on a test drive. Find a wide open spot (ideally in a parking lot), get up to 25 mph, and let go of the wheel if there is room to do so. See how quickly the car veers off the straight line.
3. Rev the engine This advice is really important for cheap cars. Keep the car in park (if an automatic) or in neutral with the emergency brake on and floor the accelerator. Really wind up the RPMs. You would be surprised what the exhaust does under just a little bit of pressure.
4. Don't expect paperwork By the time a used car is worth $1000, it probably no longer has its paperwork. However, you might want to check if there is a recent oil change sticker - preferably one more than two days old, which just means the dealer had the oil changed.
5. Look on the ground See if there are spots below the car like from an oil leak or transmission leak. Don't buy a headache, which is what you'll get if you see them.

I have also written an in-depth article on how to inspect a used car that goes for all makes and models - and not just the least expensive. Take the time to consult it and add it to the advice outlined above.

Truth be told - you're not going to find a $1000 used car without some problems. It's just that you are going to need to anticipate what the problems might be and if it is worth the bother.

New tires are going to be a fix worth making because you might be able to get away with just two new tires. That's a couple hundred bucks worth spending for what is an important safety item. A new transmission is not a worthwhile investment.

Remember that a $1000 used car - unless you have good mechanical skills - is really a stop-gap measure for transportation. My advice is to follow the basic steps and keep in mind that this particular style of used car is probably not going to last you much more than 18 months to two years.