Friday, February 24, 2006

New Car Concern #2

Some may have wondered why the last post was titled "New Car Concern #1." Naturally, it is because I have another concern about cars right now. The last post was about someone elses interest in buying a new car, a pretty expensive new car at that. This post is about a new car for Mrs. RS and myself.

As I mentioned previously, I am driving a 7-year old Honda Civic that I bought new out of college. It currently has just over 80,000 miles on it. My wife is driving a 2000 Toyota Corolla with about 60,000 miles on it. By today's standards, this is probably nothing, but at some point we will need new cars. Both of our current cars are close in age and mileage (about a year apart) and it stands to reason that we will both need new cars around the same time.

So my dilema is as follows...rather than being on basically the same time schedule for cars, I am wondering if one of us should get a new car now while the other keeps driving their car into the ground (maybe not that far, but for a while longer). This would hopefully allow us to not both have a car payment at the same time. I just worry that if we both wait, we will end up having $700-$800 in payments at the same time. I know that my wife would like to get some kind of SUV as her next car and I would probably just get another Civic. Anyone have any opinions on what would be best course of action for us?

11 Comments:

Blogger bored said...

You're right. At some point you will both need new cars...

But I'm assuming you bought a Honda and a Toyota for their reliability....as long as it gets you from point A to point B, a car is a car...

I myself have a 2000 Honda Civic and my wife has a new 2005 Toyota Sienna. The Sienna was paid with cash from savings from the previous vehicle. The civic does the job (drives) and hasn't let me down. The maintenence is minimal compared to a new car loan or lease (like wheels, brakes, timing belt, etc...we have 95,000 miles on our Honda)

If you want the assurance a new car brings (along with the pricetag) and you can afford it, by all means, reward yourself. The troubles cars bring are devistating when they happen...but if you're like me, that's why you bought a Honda and a Toyota...so those things don't happen.

But in my opinion, as we are doing ourselves, take care of your vehicles and drive 'em forever.

Save the money for your future purchase, so when its time, you're financially ready to take on the new burden.

I'm from the Detroit area, where cars are precious....of course my intimacy with the big 3 is why I own 2 Japanese vehicles! :P

2/25/2006 2:31 AM  
Anonymous Phil said...

My parents have a 1993 and a 1994 Camry, both with over 150,000 miles. In that time, they've kept up the maint. and never had something just fail completely on them (unlike the two previous Chrysler minivans).

If you've taken care of the cars and try to sell them, you'll never get what they're worth (thus spake Tim Hartford, the Undercover Economist) because the buyer has to assume that they're junk or you wouldn't be selling them.

Chances are that they won't both die at the same time since the lifespan is both long and highly variable, so you should be able to space out the payments. I agree with the last commenter that you should start saving now, and act like you still have a car payment.

2/25/2006 3:50 AM  
Blogger Mechanic said...

My girlfriend and I recently faced this dilemma as well.

Our solution was to buy one new car (a really nice one) and keep both of the older cars. We did this because 1) we live in a part of the country that can get really cold really quick, so it can be dangerous to have your car breakdown (especially in a snow storm or when the temperature drops at night), 2) I really don't drive that much because the city I live in provides free bus service if you work downtown (ecopass), 3) my girlfriend has to commute to the next city over for her job. Another reason, one that I will deny saying if it is brought to light, is that my girlfriend really wanted a new car...

I drive the nicest older car and my girlfriend drives the new car. This seems to work for us. Since the older car isn't worth much and it is hardly ever driven, we were able to reduce the insurance coverage to next to nothing (uninsured motorists property damage vs. comp and collision combined with a really high deductible), the only maintenance for this car is my changing the oil once every year or two, the car wouldn't pass inspection so we just forego that expense as well. When the older car finally gives in, I plan on driving the other older car for a few years. If they both go, at least we have one good car.

I suspect my girlfriend will want a new car in five or six years, so I guess I might be driving the new car at that point and she will be driving yet another new car... This may not sound fair, but I do really feel better that she is safe given where we live and it frees up some cash to use for other things.


Gary Brolis
http://www.MechanicsofMoney.com
http://www.MechanicsofMoney.com/blog.php

2/25/2006 10:58 AM  
Blogger D-Day said...

If you're worried about keeping up with two car payments at once, open a savings account now and start making the equivalent of one car payment every month. Then keep driving the cars you have for as long as possible. Who knows - by the time you actually have to replace the cars, you could have enough cash on hand to just pay for one outright, and you'll already be accustomed to making a $400 payment so it shouldn't be a stretch on your budget.

2/25/2006 1:06 PM  
Anonymous bjk said...

My wife and I have an Oldsmobile with 117k miles, and a Mitsubishi with 107k miles. Our plan is to use the Olds on weekends and for any long trips - the plan is to kill that one first. I would suggest picking the car that you think will last the longest, and just use the other one more in the meantime. I figure my wifes car will die a good year or two sooner than mine. I wouldn't run out and buy a new car now.

As Phil points out, you probably won't get much for them when you're ready to sell.. so you might as well bury them. I plan on letting her get a new (to her) car when she thinks the time is right, and then I'm going to resurrect her car and kill it again.

Also, you both live fairly close to work and are lucky that you work at the same place, so if need be you could share a car for a little while.

2/25/2006 6:13 PM  
Blogger Bill said...

Take a look at Paul is Dead. AskUnclebill.typepade.com

2/26/2006 10:10 PM  
Blogger ncnblog said...

D-Day is on the right track.

Since both cars are in good shape and running fine (I have an 3 paid for cars, all over 100k, all doing just fine)...why not just "make" a car payemnt to yourself in a savings account, and then when the time comes, you can buy a car with cash. Then, if you need to borrow for the other car, at the same time, you will only have one payment. This works out the same as if you bought one new now, except, instead of paying interest on those monthly payments, you are making interest.

(Honestly, I think both of those cars sound good for the next 3 to 5 years, AT LEAST. I have a 2001, a 2000, and 1994, and I plan to drive them until 2010, and beyond.)

Last thought...Think long and hard... Is this really a "financial" question, or are you jonesing for a new car. If so, take a cold shower and rock on with your paid for stuff! Great Blog! Keep it up,
ncnblog.com

2/26/2006 10:49 PM  
Blogger SL said...

The idea to put some money into another savings account and "pay" for your next new car is a great one. That way you'll also avoid debt.

The two cars you have probably will drive into the over 150K range. My friends who are driving civics and toyotas have over 200K miles. Your car has just hit its "40s" in my book

Not sure about avoiding inspection, that seems a little illegal

2/27/2006 10:11 AM  
Anonymous Anonymous said...

Budget, but don't be pennywise, pound foolish. A corolla and a civic are reliable transportation and will most likely last a lot longer. But think about safety. One way to rationalize a new car purchase is to realize that if you get your leg/arm crushed in an accident, that can be pretty costly...

2/28/2006 12:30 AM  
Blogger RS said...

This is all great advice...thanks everyone. I will have a post coming up soon about what I decided to do. Appreciate the comments.

2/28/2006 8:53 PM  
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