Author Topic: new car purchase advice  (Read 8307 times)

Offline ladieu

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new car purchase advice
« on: May 20, 2010, 01:52:13 PM »
Ok so here is another one of those threads where I want to know what to do with my money. I hope this one is unique though.


So I have a 2003 ford focus hatch back with about 150k miles on it.   I rely on this car for a daily 23 mile commute (each way).

It's to the point now where I am sinking money into this car like every few months, the latest one being the water pump.  I am considering getting a lightly used car.

Also recently my wife quit her job to get a masters and then decided to go full on PHD. This means I won't be getting much income in from my better half. We have no debt from the schooling due to helpful in-laws and cash savings, however I am down to about 90 days of emergency cash.

Also due to only recently being a survivalist I am sad to say 100% of my other wealth is tied down in IRA/401k

OK on to the question...

Do I

a) Keep the focus and keep crossing my fingers that the next repair will be the last "for awhile" (I say this every time I fix this thing)
b) buy a newish car in the range I am looking at and pay 100% cash for it, cutting cash savings to the bone, and then paying myself back as quickly as possible
c) put money down on a newish car and keeping 30 to 60 days of cash in reserve... borrowing the rest and pay it down aggressively
d) buy a car which is more used then I would like it to be... such as my other car (I bought her a 2000 jetta TDI with 130k miles on it for $3500 cash)  however on this car I just spent $1200 on a new turbo charger. I think it will last awhile, but it is annoying to fix these old cars. Also I am not skilled enough to make advanced repairs such as replacing turbo-chargers.


OK any takes on this would be great. I hope I have stumped you beyond the normal, inflation is coming what do I do with this pile of cash question.

-Nick
« Last Edit: May 20, 2010, 01:55:23 PM by ladieu »

Offline joeinwv

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Re: new car purchase advice
« Reply #1 on: May 20, 2010, 01:59:59 PM »
Option C - you do not deplete your emergency cash on hand for a capital purchase. Get a decent used car and pay 75% cash. Then you have a small loan with minimal payments you can double up on when funds are available.

Another option would be to nurse your current ride a few more months and save more cash. I drive about 35-40k annual for work. I can't have a beater car with downtime. I typically buy a 3-5 year old, low mileage car. Most recent was a 2006 Crown Vic with 16,000 miles I got for $13k. Will be paid off within next 12 months. I owe about $3500 on it. I don't feel too bad, since loan is 4% through credit union.

BTW, you can fit a big GHB in the trunk of a Crown Vic. I average 20-23 mpg, mix town and hway.

Offline ladieu

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Re: new car purchase advice
« Reply #2 on: May 20, 2010, 02:04:58 PM »
I do have a beater van I can drive when my beater car breaks down...LOL so I'm not totally screwed when the focus breaks down. I'm thinking I might keep driving the focus until winter gets closer and stockpile cash until then, then get something before the winter sets in.  Hopefully this thing can make it through the summer

-Nick

Offline bkt

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Re: new car purchase advice
« Reply #3 on: May 20, 2010, 02:05:27 PM »
Borrow against your 401k, then pay yourself back. I'm not sure how this works outside of New York, but I know a bunch of people who borrow against their 401k to buy cars, then they pay back the money into their own retirement which they get later on.

Offline ladieu

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Re: new car purchase advice
« Reply #4 on: May 20, 2010, 02:18:34 PM »
Nice... that seems to be an option. I know a friend did it to pay for a wedding here in PA so it is possible.

Side note: people spend WAY to much to get married.

+1 ..I'll research that.

Offline ladieu

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Re: new car purchase advice
« Reply #5 on: May 20, 2010, 02:27:24 PM »
an analysis of 401k loans and considerations

http://www.stretcher.com/stories/980525a.cfm

Offline tamo42

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Re: new car purchase advice
« Reply #6 on: May 20, 2010, 04:28:43 PM »
My vote goes for option A.  Keep driving until the focus until the wheels fall off.  Build up a cash savings for your future purchase.

Offline ncjeeper

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Re: new car purchase advice
« Reply #7 on: May 20, 2010, 07:01:47 PM »
My vote goes for option A.  Keep driving until the focus until the wheels fall off.  Build up a cash savings for your future purchase.
X2. You wouldnt get much for the focus if you sold it now so adding another 10k miles on it wont make a difference. It does suck getting nickled and dimed on repairs, but at least it doesnt need any major work and you can drive it until it does.

Offline javabrewer

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Re: new car purchase advice
« Reply #8 on: May 20, 2010, 09:06:33 PM »
Regarding taking a loan from the 401k, keepnin mind that a lot of those pros and cons comparison articles you see assume a good rate of return each year on your balance, usually 8 or 9 percent.  I have had my 401k for almost 10 years now and in reality it hasn't kept up with inflation.  I am ahead because of employer matches, that's about it.  Had I taken a loan from it back in 2007 when I bought my house I would be way ahead.  Unfortunately I listened to my family and friends against my judgement on that one.  Food for thought.

Offline Texasbound

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Re: new car purchase advice
« Reply #9 on: May 20, 2010, 09:55:29 PM »
I would take the Focus to a good mechanic and get a thorough checkup.

If the car seems to still be fairly solid, I would continue driving it as it is.  You will most likely spend far less on maintenance than a car payment.  Any money you don't spend on fixing it up, can be banked away for a future purchase.  If it isn't smoking or having any major issues right now, you should be able to run it for quite a few more miles before if totally craters on you.   Things like water pumps, alternators, brakes are just typical maintenance for any vehicle the is more than 5 years old.  Some of this is just to be expected.   

Offline LdMorgan

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Re: new car purchase advice
« Reply #10 on: May 20, 2010, 10:20:09 PM »
Whatever car you buy next, get the simplest and most durable one you can find.

Talk to a few mechanics, and find out what they drive--it won't be something
they have to work on a lot, and it will be something that is relatively cheap and easy to fix.




Offline Crusher13

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Re: new car purchase advice
« Reply #11 on: May 20, 2010, 10:40:03 PM »
Drive the focus until it falls apart. Even a few consumable repairs every few months don't add up to a car payment.

Offline JGreene

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Re: new car purchase advice
« Reply #12 on: May 21, 2010, 05:15:28 AM »
Keep the old one IF you can live with the consequences of its inconsistency.  Some of us can't and that's understood.  I know what you mean about the car coming to a point where you're sinking money into it so often.  I started thinking of that cost in terms of 'how many car payments is that?'...   So $800 for a state inspection = 2 car payments... covering 6-12 months, sounds like a deal.

I did buy my last car new, never again.  I'll let someone else take the hit and buy a used low mileage vehicle with cash if at all possible.

Don't get too caught up on the mileage spec.  I guess it depends on your usage, but (an extreme example) a hybrid isn't worth paying $10K+ more to get a few more MPG.  I've done the math to figure out if replacing a V6 we have with something with twice the mileage and it doesn't even come close to the payment.

Offline LICountryBoy

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Re: new car purchase advice
« Reply #13 on: May 21, 2010, 05:53:23 AM »


Side note: people spend WAY to much to get married.



+12

Offline ladieu

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Re: new car purchase advice
« Reply #14 on: May 21, 2010, 07:14:25 AM »
thanks for all the good info.

I'm keeping the 401k option open. For the near term we have decided to keep driving the focus. I actually get around 30mpg now with that car so it is OK.

To be fair to the focus it has been a dream vehicle in terms of maintenance. It has only started acting up this past year.   I have put 1000s into the car this year. My mechanic is next to my work and he actually told me I was being stubborn to keep fixing it... sell it now he says. It's fun when your driving to work and your car just shuts off in the middle of rush hour... oops there goes the alternator. Fun!  Other than the tranny and the engine I can't really think of too many things I haven't just recently replaced. New AC, alternator, battery, water pump, struts... the list goes on. When it rains it REALLY pours... well at least as far as this 2003 focus is concerned. :/

The wife and I have decided to stockpile cash until winter closes in and re-evaluate at that time.

I hate to spend the money now, because I want to start paying on my house, i feel like this money pit is holding me back, every time I get ahead.. SMACK... $1000

Offline javabrewer

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Re: new car purchase advice
« Reply #15 on: May 21, 2010, 10:18:21 AM »
Hey ladieu, all those replacements could mean the car is good for another 50-75k miles with just routine maintenance.  Take it easy on the tranny and your driving habits and you could be ok for a while now.

Offline joeinwv

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Re: new car purchase advice
« Reply #16 on: May 21, 2010, 08:41:32 PM »
That is a lot of the wear items. If the focus is a 5 speed, that will hold. Clutch could go. As long as you don't blow a head gasket, should run fine for the near term.

Offline JGreene

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Re: new car purchase advice
« Reply #17 on: May 21, 2010, 11:26:50 PM »
Just a thought.   From what I understand with other 'capital' purchases, its a good idea to spend the money up front and buy something of quality that will last.  Why is this different when it comes to our vehicles?    I'm not saying a new car will last longer, believe me I know, but buying a used German car for instance over something else.

Offline liftsboxes

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Re: new car purchase advice
« Reply #18 on: May 22, 2010, 04:22:06 AM »
It sounds like you're moving down this track already, but ...

Have the 401k option ready to roll in the event you need to deploy it quickly.

Those repairs are normal and each one adds life to the Focus.

You have a perfect opportunity to learn how to fix cars.

Offline ladieu

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Re: new car purchase advice
« Reply #19 on: January 31, 2011, 07:52:57 AM »
Hey guys, i realize it is an old thread, but thought it might interest everyone to know how this turned out.

I finally succumbed to the wife's desire for a "new" (used) car. This was due to her being pregnant and wanting a bigger vehicle.

When I finally ditched the focus I had 170k miles on it.

I was dumping engine coolant in it every other week, it would shake if I went greater than 70 mph (combination of alignment/bad tires), i had to bang the key with my palm to loosen it up to get the key to turn (part ordered but I never installed it because my aversion to banging on keys was less than my aversion to working on the car in 20 degree weather) If you turned left it made some really heinous noises.. lots of dents, etc... ended up getting about $800 in the trade-in... Probably could have gotten $1200 or so on craigslist but decided not to bother with it.

LOL... all in all though it was because of this thread I decided to keep it and we were able to save up enough buffer to pay for the new car without having to take the emergency fun down to uncomfortable levels.  I'm fairly certain I could have met my goal of driving the car until spring... but the wife was like my husky with the scent of a squirrel.

She had her heart set on getting a Scion Xb for some reason... yeah  I know ... seriously I don't understand it either... ha ha

The only reason I finally relented is, #1 she always gets her way, #2 and it is built on the honda accord platform so I convinced myself it would last a long time.

Got a 2008 with 30k miles on it for just under 11k which i thought was a decent deal.

Anyway I'll drive it until the wheels fall off!! LOL


Here is me sliding on ice last week just before we got rid of it! (my last commute in it ROFL)


Offline NotAGrasshopper

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Re: new car purchase advice
« Reply #20 on: January 31, 2011, 09:24:49 AM »
Until two weeks ago I had a 1998 Acura Integra with 218k miles on it.  I paid it off in 2002 so have enjoyed eight years of no car payments.  Very little maintenance - nothing major at all - and I did it all myself.  Probably $400 per year on average including tires and brakes.

So I can certainly recommend a low-mileage Acura or Honda as a great reliable car.

But it got stolen from my driveway...

As thrilled as I am with Hondas and Acuras, I went a different direction and opted for a super clean 2006 VW Jetta turbodiesel that I paid cash for.  I couldn't be happier with my decision.

A diesel typically gets better mileage (though fuel is slightly more expensive) and diesel engines last *forever*.  There is no reason, with proper maintenance, that a light diesel engine shouldn't last 400,000-500,000 miles.  The car will fall apart before the engine does.

Fuel is easy to find and in a SHTF, fuel can be found in unlikely places.  I am *not* advocating theft but if it comes down to life or limb, fuel can be found:  In parked construction equipment (those Caterpillar graders that you see on the side of the highway), small airports (a diesel will burn jet fuel no problem), on the edges of farmers' fields in tanks, behind office buildings in backup generator tanks, etc. 

Biodiesel is also an option.  I am getting ready to start making biodiesel using free oil from two local donut shops.  My total cost will be about $0.50 per gallon for the chemicals (methanol and KOH) needed to do it.

Another nice thing about diesel is that it stores for a *very* long time (10+ years) if kept water-free.  If it gets water in it then bacterial growth can be an issue but this can be prevented with a biocide.

So diesel is my vote.  Otherwise, find a clean used Honda civic or similar.

Offline ladieu

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Re: new car purchase advice
« Reply #21 on: January 31, 2011, 10:29:00 AM »
@notagrasshopper

I hear you man... i jumped on the TDI bandwagon. I got a 2000 jetta TDI for my daily commute

paid $3500 (cash of course)

has 165k miles on it currently.  My wife stole it from me when I bought it and forced me to drive the focus, but gave it back now that she has her new car.   ;D ;D

Offline thezoo

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Re: new car purchase advice
« Reply #22 on: January 31, 2011, 11:59:45 AM »
I realize its maybe too late to throw my 2 cents in, but the way I decide these things now, I have never had a car payment under $250 so as long as the repairs cost less than $250 a month your still cheaper than buying a new car, ( i posted thisw incase someone else had your issue) :)

Offline summer98

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Re: new car purchase advice
« Reply #23 on: February 01, 2011, 05:37:15 AM »
We had to make the same decision last fall. Our Taurus was going fast -when Fords fall apart, they REALLY fall apart. My old T-Bird did the same thing. It got to the point where we were putting more money into it than a car payment, and more things were going wrong all the time, so we said enough was enough. We have a tiny payment on our Kia -150 a month -and should have it paid off before long.
Congrats on the new car.

Offline Jimmy

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Re: new car purchase advice
« Reply #24 on: February 17, 2011, 04:10:49 AM »
Please don't borrow I really do not see the point I have never borrowed to buy a car. Is there  a reason it has to look good? If not then get something old - maybe better off with a japanese car as they last better maybe a toyota.

I have had scruffy cars my whole life (apart from one time when it got me badly in debt). I am not poor but really don't see the point in paying for something that I really don't appreciate. To answer this question properly you really need to add up the costs of repair over the last two years and then look at the costs of any other option. I suspect you are (albiet unintentionally, using the financial cost as justification for a choice you want to make and if you do the sums it will not add up.)

Normally to save money the best I found is run your car until it costs more to fix than its worth. When that happens get a new used one. In the mean time save some cash for repair. In the mean time you need to save some money so you have a contingency for repair and other problems .

FYI I am currently driving a noisy 15 year old toyota hilux diesel (not everyones cup of tea).

Hope it helps

Paul

my blog www.paulayling.me

Offline Amator

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Re: new car purchase advice
« Reply #25 on: February 17, 2011, 05:22:59 AM »

She had her heart set on getting a Scion Xb for some reason... yeah  I know ... seriously I don't understand it either... ha ha

The only reason I finally relented is, #1 she always gets her way, #2 and it is built on the honda accord platform so I convinced myself it would last a long time.

Got a 2008 with 30k miles on it for just under 11k which i thought was a decent deal.

Anyway I'll drive it until the wheels fall off!! LOL

Interesting.  I have a 2006 Scion xB.  Got it in July 2008 with 18,018 miles for $12,300.  I got it because I needed a dependable(Toyota) fuel efficient (xB is basically a Corolla with a different body), car for my commute but didn't want the same Corolla/Civic/Camry/Accord that everyone else was driving.  I've been very happy with it so far.  It's now at 68,xxx miles and I've had to replace are the tires.  I average around 32mpg with mostly Interstate driving, but can get 40mpg if I hypermile.  The 2008 is the Gen2 xB and I think the mileage is not quite as good.

I've been surprised by how much I can carry in this thing if you keep a good supply of bungee cords around.  So far I've hauled a washing machine, 6ft desk, entertainment center, a big propane grill, etc.  Just keep the back door open and bungee the hell out of it.