While everyone else is spinning in circles about how great year-end car deals are right now, lots of folks are looking on in amazement. Most people just maxed out their credit cards for Christmas, retailers will be laying off all that holiday help they brought on, and the dreary, grey days of winter stretch out ahead like a long Game of Thrones night north of the wall. The next bit of relief for most folks won’t be until tax refunds start rolling in.

Who has money for a car right now?

If you happen to have held on to some spare pocket change, there are indeed deals to be had. But let’s forego the new car dealers, shall we? If what you managed to hold on to was pocket change, you’re not looking for a Toyotathon buy. You’re looking for something slightly better than a beater that will replace that 2002 Camry that is on its third water pump and has thumb tacks in the headliner.

The good news is, it’s a buyers market, even in the used car circles. When people need money, they sell things. And when they need money badly, they sell things cheap. Hopping on Craigslist or in the local classifieds could net one a decent catch. It’s simple market analysis economics writ small. It’s not hard to find a buy. It’s hard to find the money.

So how do you do that? How do you manage to have the money to buy when cars are cheap, especially right after Christmas?

One technique that is gaining popularity is the method that Dave Ramsey promotes. The idea is by no means original to Ramsey, but he does outline it simply and convincingly.

Even for people who may have enough money – and good credit – to buy a new vehicle and be able to make the payment, this method is attractive for one big reason: depreciation. As Ramsey says:

“New cars lose 70% of their value in the first four years. When you buy used, the original owner has already eaten the cost of depreciation.”

The method looks like this:

Let’s say that you are thinking about financing a new car with payments of $400 a month, just a little below the average car payment. Your current car is worth around $1,500. If you take that $400 and pay yourself, instead of the dealer, you’ll have a $4,000 paid-for-with-cash car in just 10 short months.

What kind of car can you buy with $4000? A quick local Craigslist search spits out:

a 2001 Dodge Stealth (2-door), for sale by owner, in great shape, 133,000 miles, with oil change records showing good maintenance for $3900

a 2000 VW Beetle TDI, owner just bought a new one, pics look good, $4000

a 2005 Chevy Cavalier (4-door), good shape, $3200

Now, imagine buying any of the above. You’ll drive that vehicle for only one year, all while saving that $400 a month you would have been paying in car payments. Then you sell that vehicle for $1500. You now have $5,500 in hand for a used car. Hit Craigslist again for something nicer than you have.

Repeat this process again, and you’ll have a $10,000 car just 30 months after you started saving.

So when do you start all this? Now. Or if you’re just as low on funds as everyone else, wait for income tax refund time. But instead of blowing that check on a new TV like most people you know – or worse, turning it over to a car dealer – stick it in a savings account and start adding to it until this time next year.

Then step out and grab those cheap deals.

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