Major Budget Buster

[ssawka]

Well, I did not plan on buying a new car until after our other one was paid off, but the transmission in my Mazda Tribute died a few weeks ago. I had the transmission fixed, but I think I should get rid of the car now while I can still get some money out of it. The car is a 2003 and has 89K miles on it. Unfortunately, we did not take as good care of it as we should have. Also since I know zip about cars, I feel like the mechanics are taking me for a ride every time I bring the car in.

Anyway, I'm looking at getting a $17,000 KIA. I went to CarMax and they offered me about $7,000 for my old car, I'm trying to see if I can get a little more through private sale. So, the car will run me about $10,000 (well actually $14,000 when I subtract the transmission, but that's $ already spent). Also, KIA is offering 0% for three years, so we are planning on financing the whole amount and then using the $ from resale to pay off some other debt that has a high interest rate (DVC). That will save us another $1,000. I know this makes financial sense, it's just hard to swallow the extra $500 per month for the next 3 years, even though we'll wind up with a car with a 5 year bumper-to-bumper and a 10 year powertrain warranty. I'm not too worried about paying though because we've been paying out that on our higher interest debt for about a year now, and we will still be bringing in more than we pay out, but just barely. I know it's only 3 years and we'll have two reliable cars, but the extra $500 a month that we "have to" pay is just a bit unsettling.

 

[msmayor]

Not sure why you think it makes financial sense.

You just had the transmission fixed...you admitted to not taking good care of the vehicle. Why not start NOW and take better care of it until your budget can allow for another car payment?

 

[ssawka]

Not sure why you think it makes financial sense.

You just had the transmission fixed...you admitted to not taking good care of the vehicle. Why not start NOW and take better care of it until your budget can allow for another car payment?

The budget can allow another car payment, it's just that I don't want to pay. The thing about my Tribute is that I don't know what else is going to go with it, and every time I take it to the garage they tell me I need another $1,000 worth of work. Also, since I'm nearing that magical 100K mark, the resale value of cars plummets when you hit 100K.

Besides, the reason I said it makes financial sense is because I can either try to keep the Tribute running for another few years, or I can "bite the bullet" now pay about $9000 net now and have a car that is under warranty for the next 10 years. The way I look at it is the Tribute is an unknown, whereas a KIA is at least under a warranty. Also, as an added bonus, the new KIA will get much better MPG than the 7 year old Tribute gets.

 

[ssawka]

Forgot to add that although the second car payment comes close to maxing out our income, we have plenty in reserve so I know we won't miss a payment, and my career is pretty secure. Also, my wife is a massage therapist and gets paid only when she works, so our budget is based on the very low end for her even though her income has been much higher lately.

 

[englishteacha]

Sorry...I'm driving a 1997 Chevy Malibu with over 100K on it. I don't think a 7 year old car with fewer than 100K is something you need to get rid of! Take better care of it from now on, and keep it clean inside and out (to avoid stains and rust and such). I'm sure in 2-3 years some college kid would love to buy it for a few thousand dollars (or someone like me who won't pay a lot for a car), and you can save up $500 a month and pay for a new(er) car with a much smaller loan...or no loan at all. $500 a month for 3 years is $18,000. You can get a lot of car for $18,000. The way I buy cars, I could get 2 cars and a Vespa for $18k!

 

[wdwfan16]

You just fixed it so keep it. Use the car payments to pay down your other debt.

 

[ssawka]

You just fixed it so keep it. Use the car payments to pay down your other debt.

The thing is that if I do that with the % rate of the other debt, it gets paid off in about the same time. Granted I will be taking some out of savings to do it now.

 

[mrsklamc]

After spending $4k to get the transmission repaired, selling it now makes no sense at all. Unless the engine goes, should be just fine for a minimum of 50k more miles.

 

[kydisneyfans]

I have to agree with everyone else here-you already paid out the $$ for the repair, keep the car. I would have made the trade before shelling out the 4K.

My 2002 Saturn has 247,500 miles on it, with only $600 in "unexpected" repairs. Cars last a long time now, 89K is nothing.

I'm not sure a KIA, even with full warranty, is going to last longer anyway. Keep the $500 per month, pay down debt, or save to pay cash for a new one in 2-3 years.

 

[tar heel]

Doing a $4,000 repair then selling just doesn't seem to make sense at all. Was that a new or rebuilt transmission? From the price, I hope it was new! It sounds like you don't trust your mechanic -- you really need to find someone you feel good about regardless of what kind of car you have. I'm lucky enough to have a mechanic that I trust totally. It's a two-person garage, dad and son, that's been in business 40 years or so.

I know that ripped off feeling -- got it six months ago when I went somewhere else to buy tires b/c my guy doesn't sell enough to have a competitive price. I now realize that I should have had him to check the things they told me that had to be done before the tires.

 

[SandrA9810]

I'm driving a 215,000 mile van. And it needs a new transmission as well (it'll be the second one), but I was quoted $1,900 max for it to be rebuilt. So I hope you have a new transmission. Most the time, problems start occuring at the 150-200,000 mark, not at a 100,000. Like timing chain, alternator, cv joints, and somewhere around 250,000 is usually the life of the engine.

I think you still have a lot of life left in that car. Now if you're just want an excuse to get a new car, then go for it. Now just make sure that interest isn't going to bite you in the butt when you have to start paying on it.