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If you’re shopping for a used car, there are plenty of factors to consider. The car’s price, condition, and age are major factors. Also, how the car looks or gives you a sense of status could be a factor as well. More importantly, the car’s reputation for being reliable is something else to consider. In that case, you could follow what I call the “two out of three” rule when shopping for your next used car.

What is the “two out of three” rule?

A top view of a used car dealership
A used car dealership | via Getty Images

Although some car experts may call this rule by another name, I call it the “two out of three” rule. The rule is based on three simple factors you should consider when buying a used car:

  • A sense of status or attractiveness
  • Reliability
  • Fits in your budget

With these factors in mind, the rule is that you can choose two out of three when looking for a used car and then decide if the car is worth your consideration. For example, let’s say you have a budget of $8,000 and are checking out a 2007 Audi S4 that costs $7,000.

Let’s apply the rule to it:

  • It’s attractive, and the Audi brand name could give you an elevated sense of status
  • Most Audi S4’s of this vintage are affordable, so it fits in your budget
  • However, this generation of the Audi S4 is known for being unreliable due to timing chain and electrical issues. So, it’s not reliable.

As we can see, using a 2007 Audi S4 as an example shows that the car fits two out of the three criteria (attractiveness and budget) but not the third (reliability).

The same rule can be applied to other cars, like a 2009 Honda Civic I found in my local classifieds. This particular Civic has around 145,000 miles on the odometer, looks clean, and costs $6,000.

If you had the same $8,000 budget, the Civic fits perfectly. It’s also known for being reliable, especially since it runs well (according to the seller) with 145,000 miles on it. However, it’s not the most attractive car in the market and probably won’t give you much status compared to an Audi.

In this case, the old faithful Honda Civic still only fits two out of the three criteria.

What’s the point of this weird rule?

2015 Mercedes-Benz GLK red front snow
2015 Mercedes-Benz GLK | Mercedes-Benz

The main point of applying this rule is to have common sense when shopping for a used car. Over the years, I have had friends, relatives, and customers say things like, “I found this used 2015 Mercedes-Benz C-Class for only $12,000! It totally fits my budget.”

Of course, it does. It’s also attractive, but it’s not reliable, which is why it’s so cheap. This rule applies double for nearly every used BMW in the market. To break it down in simple terms – if a car is attractive and reliable, it probably won’t fit your budget.

Additionally, if a car is reliable and fits your budget, it most likely won’t be very attractive.

Do any used cars fit all three of the criteria?

A side view of an older Toyota Prius
Second-generation Toyota Prius | via Getty Images

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Considering beauty is in the eye of the beholder, there could be some used cars in the market that fit all three of the criteria. After all, many Toyota Prius owners think their car looks cool, same with the people who bought a Volkswagen Thing or Pontiac Aztek.

But those are exceptions to the rule based on personal preference. Keep in mind that the rule mainly applies to a car’s generally perceived status, like a Mercedes-Benz, BMW, Ferrari, etc.

So, the next time you shop for a used vehicle, try applying the “two out of three” rule and decide whether the car is right for you. The last thing you would want is to have a gorgeous car that you can afford, only to have it sit in the shop and rack up repair bills over time.