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Old 09-18-2012, 11:20 AM   #1
olecow
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Thoughts on a new car or not

My wife and I have been lucky enough to be without a car payment for about three years now and it's nice to put the money that would go toward a car payment away. I currently drive a 2004 Nisaan Quest with 135,000 miles on it that's been very reliable for us. My wife drives a 2005 Ford Freestyle with 100,000 miles. My thought is to drive the van until it dies or needs some cataclysmic repair (essentially dies), because we perform the recommended maintenance on our cars and the van runs fine.

My wife is concerned that our cars will reach a point where both will need to be replaced at the same time, so we should look at buying a new van. Two car payments is something we definitely don't want, and would have a tough time affording, even if we bought equivalent late model used cars. I share her concern to a degree, but I'm kind of addicted to the no car payment life. To put a Disney twist on this we've booked a trip to the World next June and we'll be driving from Milwaukee (2500 miles roundtrip). I'd like to drive our van but I'm not sure if I should get a newer vehicle before then. Has anyone else faced this issue, and how did you handle it?
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Old 09-18-2012, 11:27 AM   #2
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We did and bought the new vehicle but paid it off in 18 months.
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Old 09-18-2012, 11:40 AM   #3
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You have about 8 months between now and May - how about "paying" yourself whatever you used to pay in car payments, and save that money for a really hefty down payment on a new car, if you feel in May that your car won't be able to make the trip down. (If you feel like it CAN make the trip, then keep going until you have the entire car cost saved up!)

We're working on paying down our cars, and will be doing that ASAP afterwards! (I put half of the car's cost down when we bought our car, so it'll be paid off before the warranty expires!)
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Old 09-18-2012, 11:51 AM   #4
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I am slightly confused what you are asking.

If you are referring to a brand new car, I would not recommend it. Cars lose about 40% of their value in the first two years. Buying a 2 year old car has such a better value. For example:

Scenario A: Buy a band new - $20,000 car.
Drive it for 6 years.
Sell it for $4,000
Total cost: $16,000

Scenario B: Buy a used car 2 years old - $12,000
Drive it 6 years.
Sell it for $2,000
Total Cost: $10,000.


If you are asking about buying a new car to you(but used), I would suggest not financing it. Start making a car payment now, but pay yourself. When you are dies, you will have the money saved up, or at least a strong start.
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Old 09-18-2012, 11:52 AM   #5
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I'd try to keep the current cars and just put the potential car payment in a separate account each month. Then when/if one of them dies you can use that toward a down payment. Two cars will cost the same, regardless of whether you buy them both at the same time or spread it out over a longer period. Save for as long as you can, and you could potentially pay cash for one/both of them.

As for your Disney trip, with two older/high mileage cars, I might consider renting a car for the trip. If you hunt around for deals, it can be surprisingly affordable. Most contracts these days include unlimited mileage, and chances are the newer model you rent would have better gas mileage than the older cars you own. Plus, you'd avoid putting the wear and tear on your own cars.
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Old 09-18-2012, 12:13 PM   #6
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I agree pay yourself a car payment each month..........
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Old 09-18-2012, 12:51 PM   #7
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I looked at rentals in your area, and you can find a Grand Caravan for about $500 per week with unlimited miles (Ace Rentals). If this helps you keep your paid off vehicles for a couple of months longer you will be ahead.
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Old 09-18-2012, 01:02 PM   #8
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I agree...start paying yourself in a separate (untouchable) account.

We paid off my car in about 2.5 years (was a 5 year term). If we did not, I would just be paying it off now. Since we paid off the car, we put the same amount we were paying (about $100 more than the minimum payment) into a separate savings account.

DH drives a late model Honda with 110k miles. He only drives it to/from work, but it probably will go sooner rather than later. I'm scared about having 1 payment again, but the thought has also crossed my mind that we will have 2 payments at the same time.

So long as DH's car lasts to next summer, we will have 50% down on the car we are thinking about getting. Not a bad start. And if it sticks around longer, then it will be even better for us.

OP, do what you can to stock up some cash for a big down payment.
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Old 09-18-2012, 03:09 PM   #9
mrodgers
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Here's my calculations. I drive my cars to pretty much 200,000 miles.....

2004 Nissan, 134,000 miles
Roughly 17,000 miles per year
Drive to 200,000 miles
Roughly 4 years until 200,000 miles
Save $300/month for 4 years
$14,400 saved. 2016 buy a pretty darn nice used quality car not including trade/sell Nissan.


2005 Ford, 100,000 miles
Roughly 14,000 miles
Drive to 200,000 miles
Roughly 7 years until 200,000 miles
After replacing Nissan in 4 years, save $300/month for 3 years
$10,800 saved. 2019 buy a pretty darn nice used quality car not including trade sell Ford.

I learned my lesson of buying a new Ford over a used Honda/Toyota. Won't ever have a new car or a payment again.
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Old 09-18-2012, 06:11 PM   #10
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We usually stagger our new car purchases so that we never have two car payments at the same time, then we have a couple years with no car payment. We always buy new and then drive it for about 150K miles. We buy with a zero % or low interest rate (the highest we ever paid was 1.9% I think).

Right now, I drive a car with 145K miles on it, and DH's has 100K. We anticipate buying a new car to replace mine within 6 months.
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Old 09-18-2012, 06:44 PM   #11
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Quote:
Originally Posted by EMHDad View Post
I am slightly confused what you are asking.

If you are referring to a brand new car, I would not recommend it. Cars lose about 40% of their value in the first two years. Buying a 2 year old car has such a better value. For example:

Scenario A: Buy a band new - $20,000 car.
Drive it for 6 years.
Sell it for $4,000
Total cost: $16,000

Scenario B: Buy a used car 2 years old - $12,000
Drive it 6 years.
Sell it for $2,000
Total Cost: $10,000.


If you are asking about buying a new car to you(but used), I would suggest not financing it. Start making a car payment now, but pay yourself. When you are dies, you will have the money saved up, or at least a strong start.
That depends! If you are buying a certified pre-owned with a full warranty, then a used car is a good deal. If you are buying a used car from a private seller or a used car lot, then to me it is worth the $6000 for piece of mind and a warranty if anything goes wrong. That is unless you or your spouse know something about cars.
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Old 09-18-2012, 09:09 PM   #12
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Quote:
Originally Posted by Karenj2 View Post
You have about 8 months between now and May - how about "paying" yourself whatever you used to pay in car payments, and save that money for a really hefty down payment on a new car, if you feel in May that your car won't be able to make the trip down. (If you feel like it CAN make the trip, then keep going until you have the entire car cost saved up!)
Exactly what I was going to suggest!
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Old 09-18-2012, 09:29 PM   #13
olecow
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Thanks for the input everyone. You've given me some good ideas and a lot to think about. We will be replacing our cars with late model used. I just don't know when. We have been saving what we would be paying in car payments but that money just goes into our general purpose "emergency fund." I hate putting a lot of money down on a car (a necessary but depreciating item). But that also means a higher payment so it's kind of a catch22. Thanks again.
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Old 09-18-2012, 09:52 PM   #14
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Our NEWEST car is a 2004! And we still refer to it as the "new car!"

Our cars are in great running condition. We have a 1996 Saturn that won't die BUT we wouldn't drive it far. We also have a 2002 Saturn VUE that runs perfectly.

All 3 have over 100K miles on them and we have no intention of replacing them until they die.

We put about $300 into a new-to-us car fund account and will have a good sum saved and hope to pay cash for a used car. If we have to take out a small car payment we will, but we hope not to.

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Old 09-19-2012, 11:57 AM   #15
mrodgers
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Quote:
Originally Posted by ssawka View Post
That depends! If you are buying a certified pre-owned with a full warranty, then a used car is a good deal. If you are buying a used car from a private seller or a used car lot, then to me it is worth the $6000 for piece of mind and a warranty if anything goes wrong. That is unless you or your spouse know something about cars.
Doesn't matter whether it is certified pre-owned or private or used lot. A 2 year old car would have manufacturer warranty in any case.

My 2006 Ford (bought new 2007) was out of warranty time-wise in 2010. When the Ford ran out of warranty I happen to buy a 2003 VW used (2nd car) from a hole-in-the-wall used dealership in the middle of nowhere and it still had a year of factory warranty left. Had I bought the 2003 used the same time I bought the 2006 new, I would have had a much longer warranty time than the brand new car.
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