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I want to throw in my two cents, if that's okay. I recently ran into a car being sold on Craigslist for $700, just a little above your asking price. The mechanic I had it taken to said that it was a good car but needed a bit of work. I declined the seller, because it needed work, but if you know a lot about cars, you could probably get a decent running vehicle for way less than $2000. The good news, though, is that for $2000-$3000 you can get a pretty reliable used car. I might look for bargain basement next time, though, because I'm not an extremely careful driver, and a couple of thousand dollars is a lot to pay for a car that you wear out or wreck within two years. If you buy something for $1000 or below, make sure you know something about cars. One of my friends bought a truck from someone he knew for $1000, and it is now non-running and sitting in his driveway; it only lasted a few weeks before quitting.
Oh yeah, I've bought lots of cheap cars for $500 to $700 that I still have that give me no trouble at all. Of course, I bought the last one in 04. But for instance around here, for just basic transportation, there is a 88 Chevy Celebrity and a 86 Dodge Aries for $900 and $800 OBO that I test drove that acted like they had no major problems at all. Would probably give 4 or 5 years of trouble free motoring. Of course YOU have to be willing to accept cars that are boremobiles. However I'm thinking of taking the plunge because I want to bring my Maverick home from Grand Prairie (I miss it) but still need a beater for there that I won't care about. In other words that I won't mind leaving there for 3 months at a time. Also at the local police impound auctions, believe it or not, some good running cars go for approx. $450 to $650. At the last one here, a 94 Taurus (that was driven away from the auction on it's own!) went for $575. And it was clean inside and out, I even started it to check it out.