The Car Situation

auto-trader-1f6aa863I’m eagerly awaiting the 1st of February.  By then all debt payments will have cleared and I can update my numbers and see if I’ve made any real progress.  Until then, I give you a post about our car situation.

At this moment in time we own four vehicles outright. No debt attached to them.  I want to sell three of these and get DH something newer, and more reliable, since he does a majority of the driving (work and personal.)

These are all older vehicles.  I’ve had my vehicle since 2005 when I bought it brand new.  Well, I made the mistake of leasing (young, dumb, broke), then purchased at the end of lease (finance.)  Finally in 2013, when I took out an equity loan for a home renovation, I paid off the car.  I love my car and it’s still going strong.  I have no plans to upgrade, as nice as it would be to have more space.  It has around 125,000 miles on it.

Two vehicles belong to DH.  A 2004 Honda, which we intended to sell once he got his other car, but the landscaper shattered a window on it.  It has been sitting in the driveway ever since.  We finally bought a replacement window on eBay for $64.  Once that is installed, we can list it for sale as-is.

DH’s second (primary use) vehicle is a 1999.  Low mileage, comfortable, etc.  But it’s starting to act up.  We’re dealing with a lot of “small” repairs lately, but those are adding up quick.  $60 part here, $80 part there, $110 labor here, $100 labor there, etc.  It may be time to say goodbye to the 90’s and find something newer.

The 4th vehicle , 1997, is a bucket of junk.  A relative recently moved here from another country and needed a cheap car.  We loaned the money to buy it.  He still owed us $250 when he was arrested and the car was impounded.  We repo’d the car (cost $190 impound fee’s) with the intent to sell it and recoup our money.  We had to buy a part on eBay for $36 for a minor repair, and need to get the title.  Then we’ll get rid of it as well.

Selling at least one vehicle would also save a minimum of $45/month on car insurance.  That’s $540/year we’re wasting by having a 3rd vehicle we don’t even use on our insurance place.  I’ve kept full coverage on all our vehicles (minus the 4th), which in hindsight seems unnecessary, but I’m paranoid.  We have terrible luck with vehicles.

Best case scenario:

  • 1997 – $750
  • 1999 – $3000
  • 2004 – $4500

Worst case scenario:

  • 1997 – $400
  • 1999 – $2500
  • 2004 – $3000 (or trade-in?)

Ideally I’d like to pay cash for a new-to-us vehicle and avoid having a car payment again.  There’s something about not having a car payment that is freeing!  Unfortunately we’ve learned that cash is not king, and the likelihood of getting a great deal with paying cash is slim.  Dealerships want you to finance.  They get a kickback from the banks that provide these loans to customers.  We experienced this first hand recently, more to come on that experience later.

We’d like to stay in the $15,000-$22,000 range, with a payment around $300/month.  We’d pay this off in full when our rental house sells later this year.  It must fit our family of four (carseats!) and offer good gas mileage.  We’ve narrowed it down to Honda and Toyota.  I quite like the newer Fords, but our past experience has soured us on the mechanical reliability with that brand.  We’ll stick with imports, sorry America.

I will add that we aren’t in any rush to buy a new vehicle.  We’re taking our time, keeping an eye out for a great deal.  We’ll hang on to DH’s primary vehicle for now, but the 2004 and 1997 cars need to go asap.  Especially when it’s tax refund season.  Perfect opportunity to sell a vehicle!  The money made from selling the cars will go towards a down payment, or debt, depending on when they sell.

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9 Responses to The Car Situation

  1. Kyle says:

    Stick with paying cash! Don’t trap yourself in another car loan, just go for a slightly older model (maybe 2010ish). The trick to dealing with a car dealer is to not mention that you’re paying with cash until you agree on a number. If they don’t like your number, then walk away. Keep your freedom!!!

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  3. I agree with Kyle. Pay cash! Try some smaller mom and pop type of dealer…and refuse to give your SSN. That way you are also assured no credit report will be pulled. We have bought a number of vehicles this way with cash. We do always make sure we get the history of the vehicle. Buying from a private party can also save you a lot of money.

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    • We’ve bought all but one vehicle with cash through private sellers. Cheapos! Like $2500 or less usually. Definitely my preferred method of car buying. But DH is going to need something a lot more reliable soon and I definitely want a warranty. That’s the only reason we were looking into a dealership!! As much as I hate it, paying cash may not work out. Our recent experience was at a small dealership 😦 They run your credit regardless of cash or financing these days. Car buying has taken a backseat for now after our recent experience!

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