In addition to all the ratings, rankings, safety reports, and used car reports, they publish a list of the best cars that have list prices under $20,000.

This is a list of the cheapest brand new cars you can buy.

Following are Consumer Reports’ selections for 2011:

• Ford Focus SES ($19,995)
• Honda Civic LX ($19,115)
• Honda Fit ($16,410)
• Hyundai Elantra SE ($18,695)
• Mazda3 i Touring (sedan) ($19,070)
• Nissan Sentra 2.0 SL ($19,530)
• Nissan Versa 1.8 SL (hatchback) ($17,250)
• Scion xB ($18,360)
• Scion xD ($16,620)

The prices shown on the above cars are MSRP (Manufacturer’s Suggested Retail Price). With price discounts, rebates, and factory-to-dealer cash, you may be able to do much better than these prices.

Not only do the above cars offer great purchase prices, they have rated Very Good to Excellent in the magazines tests of each car. Furthermore, they all have great gas mileage and low maintenance costs which makes the overall cost of ownership very low.

If you are looking for a cheap new car, consider these vehicles first.

You can get free price quotes on any of the above cars from Edmunds.com.The quotes will automatically include any cash-back rebates or discounts that are currently available.

Why?

You may have noticed that in the current economy new car sales have decreased dramatically during the last three years. Car makers have had to borrow money from the government to stay afloat. Whole brands have disappeared, or will soon disappear. Car dealerships have been shut down and many have gone bankrupt. Car often sit on dealer’s lots for months before they sell. The U.S. government had to back a “cash for clunkers” program to try and stimulate sales.

Although the situation seems to be getting better now, car manufacturers are currently offering some of the best new-car incentives they’ve ever offered in their history. New cars are cheap compared to a couple of years ago.

What makes new cars so cheap now?

First, there are factory-to-customer rebates — large rebates. Rebates are like cash that you can apply as a down payment to your new car, which can be great if you are already short on down payment money. Rebates reduce the amount you have to pay, although it’s different from a price discount. A large rebate can actually allow you to buy a car for less than dealer invoice price.

Then there are dealer price discounts — dealers reduce the selling price of their cars and reduce their profit. This money comes from the dealer’s pockets, not the car manufacturer. Again, a factory rebate combined with a dealer discount can easily allow you buy a car at below dealer cost. Although factory rebates are fixed and available to everyone (for a limited time during promotions), dealer discounts might have to be negotiated.

Next, there is factory-to-dealer cash, which is “secret” money given to dealers (for a limited time during promotions) by the manufacturer. Although dealers can use the money for many different purposes (tent sale events, promotional advertising, TV spots), most of it typically ends up a dealer price discount, except the money comes from the factory’s pockets, not the dealer’s.

Next are low-interest loans — or zero (0% APR) loans. Normal new-car interest rates are currently around 6.5% APR but car manufacturers can make loans for less during limited-time promotions. They can even offer no-interest loans, which means the car buyer pays absolutely no finance charges or interest for the life of his loan. This is a great way to save money on a new car, but the deal typically requires you to select either the rebate (if offered) or the low-interest loan, but not both.

Since most car makers are now offering big incentives to buyers in the form of rebates, price discounts, dealer cash, and low-interest loans, it is not difficult to find cheap cars without even looking too hard — and without ugly negotiations.

You can get free price quotes on any new car from Edmunds.com.The quotes will automatically include any cash-back rebates or discounts that are currently available.

Yes ….. maybe, sometimes, and no.

While it is certainly possible to find bargain car deals online, it requires an extra bit of caution when doing so.

There are certainly people who are trying to sell cars cheap because 1) they are desperate and need to raise money fast, 2) they haven’t done their research and don’t really know what their car is worth, 3) the car has serious problems or has been wrecked and repaired, but they don’t mention it in their ad, 4) the car is stolen and they don’t actually have the title (although they’ll make some excuse for the reason they don’t have it), 5) the car is a salvage (totaled) vehicle but with a clean title (allowable in some states), or 6) it’s a scam.

There is a common car-selling scam that is now costing innocent people millions of dollars. People get sucked in every day by the promise of a cheap car, lose their money, and never get the car. You don’t hear much about it because the victims are too embarassed to speak up and law enforcement can’t catch the criminals, who are nearly always in another country. It rarely makes the newspaper or local news.

Here’s how the scam works.

You find a nice car on Craigslist (or other online car classified ad website) with a beautiful picture, enticing description, and an unbelievable price. The low (but not too low) price gets your attention. You contact the seller by email and ask for more details.

The “seller” responds with a nice polite email and explains that he/she has had some personal problems, needs to sell the car right away, and may be in the Armed Services, are in another country, or have some other story. They promise that the car is in great condition and will be shipped to you (free) and that you’ll have 3-5 days to try it out and return it (free) if you don’t like it. They tell you the money transaction will be handled by “eBay’s Protection Plan” or something similar, to make you comfortable that they won’t take your money before you accept the car. He (or “she”) will exchange enough friendly emails with you to make you think you are dealing with a real seller.

What’s wrong with this deal?

First, the “seller” (scammer) doesn’t own or have the car. He snagged a picture and VIN somewhere on the Internet to put in his ad. Second, he’ll ask you to send money to “eBay” or a phony escrow account. eBay has no such program for cars not purchased directly from their web site and the escrow account is the scammer’s personal bank account. Third, your money disappears and you never see the “cheap” car. The criminals almost never get found or caught because they know how not to leave a trail, and they move fast, usually in other countries.

So, if you are looking for cheap used cars for sale, be VERY careful when shopping online at sites such as Craigslist, Autotrader, and other automotive classified ad sites, including newspaper sites. “Cheap” might cost you a lot of money if you get caught in the trap.

Is it really possible to get a free car or be paid to drive your own car?

Yes, people all over the U.S. and other countries are doing it every day. But before you begin planning your next vacation trip in your new free car, you should understand how free car programs work. 

I’m sure you’ve seen cars and other vehicles driving around “wrapped” in colorful advertisements for a business, product, or maybe a new movie. Some of these are company vehicles promoting their own company. However, most others are actually ordinary people who are driving free cars or being paid to drive their own cars.

Advertising companies use “mobile ads”  as a way of promoting clients’ companies and products.

Vehicles are “wrapped” with a special printed vinyl material that can be easily changed or removed without damaging paint. It can even be placed to completely cover side and rear windows because it is perforated with small holes that allows the driver to see out clearly.  

How does it work?

Advertising companies all over the country use vehicle wrap programs and take applications from people who are interested in driving a free car, or in getting paid to drive their own “wrapped” car. They are usually located in larger cities, in university towns, or in regions in which a client wants to promote a new business or restaurant. A mobile phone company might be expanding into a new area. Or an energy drink company might want to build excitement about a new product release.

Obviously, these advertising companies want their mobile ads to be exposed to as many people as possible. This means they want their wrapped vehicles to be driven in highly populated areas where the ads will be seen often.  University towns, busy urban areas, tourist spots, beaches, and heavily traveled streets are ideal. 

When you apply for this kind of program you will be asked about your driving habits, how often you drive, where you drive, where the car might be parked during the day, and other questions that relate to the number and type of people who will potentially see your wrapped vehicle. You may also be asked about your driving record.

How do I apply for a free car?

You can of course locate and contact advertising agencies in your area as ask if they use mobile ad vehicle wrap programs. Agencies that use this type of advertising may not use it all the time. You’ll have to know when they do and when they need drivers. It won’t be easy.

There is a better way.

Specialized online services such as TheFreeCar and FreeCarSolution provide directories of advertising firms that offer free cars (or payment for driving your own car) with detailed application and contact information. They require a “membership” fee to get their directory but it can be a worthwhile investment if it means the possibility of a free car. There’s little risk because the companies mentioned above have a money-back guarantee through their payment service,  even though they may fail to mention it. 

What are my chances?

Realistically, it should not be a surprise that there are lots of people who want free cars or to be paid to drive their own car. And advertising companies don’t have thousands of vehicles driving around with ads on them. So the competition is going to be substantial. However, as the old saying goes, “You must have a ticket to win.” If you don’t apply, and apply in as many places as possible, you have no chance at all. And don’t give up too quickly — it might take a few months. Other people have gotten lucky, why not you.

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Then, there are free cars, which we discuss here.

We’ll be discussing all these types of cheap cars on this web site.

Meantime, we’ll give you some information and ideas that you can get you started on your quest for a cheap car.

Here are just some of the places you might look for your inexpensive car:

• Small independent used-car lots
• Consignment car lots
• Police seized-property sales and auctions
• Government surplus vehicle sales and auctions
• Insurance auctions of salvage vehicles
• Repossessed vehicle sales and auctions
• Bank repo sales
• Wholesale public car auctions
• Buy-here-pay-here (BHPH) used car dealers
• New car promotional sales
• Special car lease deals offered by car manufacturers
• Unclaimed and abandoned car auctions
• Rental car sales
• Previous-year model sales
• Personal distress sales
• Repair shop unclaimed vehicle sales
• Car lease takeovers
• Internet discount cars sites
• Online personal auto sales and classified ad sites

These are only some of the sources of possible cheap cars that we’ll be discussing here on this web site in future posts. We’ll explain in detail how each works, where to find them, how to deal with them, and what you should expect to get. We’ll give you the information you need to get the best possible deals and prices.

Please come back often.

Here’s how it works.

You find someone (we’ll tell you how in a moment) that wants or needs to get out of their new-car lease. In most cases these will be people who leased a car a year or so ago and have now found that they can no longer make the payments due to illness, job loss, divorce, or other personal circumstances. They discover that the leasing company won’t allow them to simply end the lease and walk away, regardless of the reasons.  To end the lease early means losing a lot of money. It’s better if they can find someone to simply take over the lease and avoid termination altogether.

Many of these leases were taken out months ago when special car leasing deals were plentiful and payments were low. The customer might have made a substantial cash down payment or traded in a car having considerable value — which further reduced their monthly payment. Most of the leases had three-year (36 month) terms and mileage allowances of either 10,000 miles or 12,000 miles per year.

For someone to take over such a lease means getting an almost-new car for a bargain low monthly payment, with no down payment and no trade-in required. The person taking over the lease for the remaining months would be getting the advantage of the down payment and trade-in that has already been made.

Many people looking for someone to take over their lease will even offer a cash bonus to sweeten the deal.   This reduces the effective monthly payment even further.

So how do I find these kinds of lease take-over deals?

Online companies such as Swapalease act as “matchmakers” between people wanting out of a lease (“sellers”) and people looking to take over a lease (“buyers”). They list hundreds of vehicles and take-over details on their web site. The “seller” pays all fees except a small transfer fee paid by the “buyer” to the lease company. This is one of the easiest and best ways to get into a late model car at the smallest possible cost.

If you decide to take advanage of this great opportunity, make sure the remaining mileage on the lease is enough to cover your driving needs in the remaining months of the lease.

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A zero percent loan saves money on each monthly payment, and saves in overall costs.

If you are in the market for a new car, and need a loan, this is definitely the way to buy.

How much money is saved with a 0% loan rate?

Let’s take a look at an example.

Assume you buy a $25,000 car and want a loan for 48 months with no down payment. Let’s say the current interest rate is 5.00%. Using an auto loan calculator such as this one at http://www.firstcarguide.com/auto-loan-calculator, we calculate the monthly payment to be $575.73 and the total cost to be $27,635.17. This means you pay $2635.15 in finance charges (interest).

Now let’s look at the same loan but with 0% interest (no finance charges). In this case, we don’t need an auto loan calculator because the math is very simple. Divide the $25,000 loan amount by the number of months in the loan (48), which gives you $520.83 a month. You total cost is simply $25,000 since you pay no finance charges.

Therefore, the 0% APR loan saves you $54.90 a month and $2635.17 in finance charges. This is a significant savings, which makes it worth your time to look for car companies who are offering zero percent loan deals. See Best Car Deals for current car incentives, including zero percent loans.

Is there a catch?

Yes. First, customers must have good credit scores to quality for 0% APR deals. If you don’t know your credit score, you can get it at FreeCreditScore.com.

Second, car companies don’t offer 0% loans on all models and styles every month. Therefore, you might not be able to get exactly the model and style you want. If you can be flexible on your choices, you have a better chance of getting one of these good deals. Again, see Best Car Deals to learn which models are currently being offered.

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Unclaimed vehicles are typically sold at public auctions and can be great bargains if you are looking for a cheap car.

These are cars, trucks, and other vehicles that an owner has left on the side of a road, in a parking garage, at a body shop, or have walked away from for various reasons. Police try to locate owners but are not always successful. Some owners, even when located, simply don’t want their vehicles any longer. Some are vehicles confiscated by police from criminals. Others are subjects of mechanic’s liens when owners don’t pay repair bills. Every vehicle has a unique story.

In most states, the law allows towing companies to pick up the cars and hold auctions to sell them to the public. The auctions are typically announced in the “legal notices” section of a local newspaper on a specified schedule, such as every Friday, or the third Thursday of every month as examples. Usually, only one newspaper in an area is designated to print legal notices.

Following are recent notices in a regional newspaper in Georgia:

M-1073 NOTICE OF ABANDONED VEHICLES INGRAM IMPOUND SERVICE, INC 2025 BASCOMB CARMEL ROAD WOODSTOCK, GA 30189 The following vehicles have been declared abandoned per O.C.G.A., 40-11 and will be sold at public auction if not redeemed:
1994 Cadillac Deville White 1G6KD52B6RU212760 removed from Hometown Lodge
2006 Mercedes Benz Grey WDDDJ75X56A061690 removed from Magnum Collision

M-1072 NOTICE OF ABANDONED VEHICLES The following vehicles have been deemed abandoned and will be sold at public auction on Aug. 19, 2011, 9 AM if not claimed. The vehicles are located at Speedway Automotive, 205 Dixie Ct., Woodstock, GA 30189.
04 CHEV TRAILBLAZER 1GNDS13S142160436 7
94 CHEV LUMINA 1GNDU06D2RT159184

M-1078 NOTICE OF PUBLIC AUCTION PEE WEE’S WRECKER SERVICE, INC. 806 BASCOMB COMMERCIAL PARKWAY WOODSTOCK, GEORGIA 30189 770 926 6185 Public auction to be held Saturday, August 13, 2011 at 1pm the following will be sold:
1999 HONDA ACCORD VIN#1HGCG5652XA064068
2000 FORD TAURUS VIN#1FAFP53U31A132494
1988 TOYOTA TERCEL VIN#JT2EL36Z8JO242405
1977 DODGE SPORTS VAN VN#B22BE7X174899
1996 HONDA ACCORD VIN#1HGCD5636TA092392
1989 HONDA SB50P SCOOTER VIN#JH2AF1706KJK113271
1992 HONDA PRELUDE VIN#JHMBB2256NCO10298
1988 TOYOTA TERCEL VIN#JT2EL36Z8JO242405
2002 DODGE INTREPID VIN#2B3HD46R62H214754
1993 MAZDA MX-3 VIN#JM1EC4313PO210269
2000 GMC SONOMA VIN#1GTCS19W9YK233881
1997 CHEVROLET ASTRO VAN VIN#1NDM19W4WB150510
1995 NISSAN QUEST VAN VIN#4N2DN11W8SD857414
1997 GMC SIERRA VIN#1GTEC14M7VZ541033

The vehicles can be inspected at the towing company’s location before the auction. Notice that VIN numbers are provided so that you can get a CarFax or AutoCheck vehicle history report. The towing company can also tell you their rules regarding bidding and payment.

Attending abandoned vehicle auctions is a great way to find cheap cars. If you are interested, find out which newspapers in your area publish “legal notices” that will tell you where and when car auctions are being held. You can also ask towing companies in your area if they conduct this type of vehicle auction. It’s best to attend at least a couple of auctions to learn how the process works before you begin attending to bid and buy.

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Of course, Honda and Toyota were hit particularly hard in the March earthquakes and have experienced some shortages in certain models and styles. In that kind of situation, it is expected that we would not see an abundance of sales incentives.

We list the current lease incentives below that have monthly payments of $200 or less. All require a down payment (cap cost reduction) as well as the first month’s payment up front (due at lease signing). Most include a mileage allowance of 12,000 miles per year, for terms between 24 and 39 months. Most expire on August 1, 2011.

Also note that only selected styles of the listed models are available with the low lease payments. You must choose the style(s) being offered to get the deal.

These special lease deals being offered are nearly all excellent deals, as rated by LeaseGuide.com. Car companies create the deals by lowering price and money factor (finance rate), raising lease-end residual value. In combination, this amounts to low monthly payments — much better than customers could negotiate for themselves.

Here are the current cheapest car lease deals for July 2011:

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Even with all these problems, most people will need a car and are finding it difficult to impossible to find money or financial help to buy a car or get a car loan.

Let’s take a look at some of the possible options for people this kind of difficult situation.

Buy cheap – If you can scrape together some cash, possibly by selling things you have, getting a temporary job, or borrowing money from family or friends, buy the cheapest car you can afford with the cash you have. You can always move up to a better car as your finances and your credit improve later. Use the ideas and suggestions found in other articles on this web site for where and how to find good cheap cars.

Get a loan – Although it is more difficult for people with credit problems to get a car loan there are loan companies, such as Auto Credit Express,  that specialize in providing auto financing to car buyers with “sub-prime” credit. You will most likely have to pay a higher interest rate than a person with good credit but, if you keep the loan as short as possible the impact of the higher interest can be minimized. You may also be limited in the amount you can borrow, which brings us back to the “buy cheap” advice made above. 

Get a co-signer – If you can’t qualify for a loan, even with a “sub-prime” lender, you should find a family member with better credit who is willing to “co-sign” with you on a loan. A co-signer is not a co-owner. It is simply someone who guarantees that they will take over your car loan payments if you can’t make them. If this happens, the car still belongs to you and your credit is not damaged. It’s a great way to restore your credit rating, or to start a credit history if you don’t have one now.

Buy here pay here – A particular type of used car dealer, called a  ”buy here, pay here dealer” sells older cars (often at inflated prices) but provides loans directly (without a bank or finance company) to his customers. You might see  their car lots with signs like “We finance anyone,” “No credit, no problem,” or “Sign and drive today.” They don’t check customers’ credit and don’t care about past credit problems. Interest rates are high and terms are strict but it can be a good short-term solution for many people.

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