Money Matters
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when to buy a car

Last week my 1999 Honda CR-V started acting up.  It was jerking, shaking, and the engine light was on.  I took it to my uncle who's a mechanic and he said that the 3rd cylinder wasn't firing and that all it needed was some plugs and wires...basically a tune up.  My mom had a 1999 Honda CR-V and it had this same issue about a year before it died completely.  My uncle and dad said that it's similar to what it did but this should fix it...but now it's in the back of my head that it may only be a matter of time until it does it again or dies completely.  I recently got a raise at work and plan on doubling up on a small school loan to get it paid off by the end of Dec.  I still have a student loan for $50,000 but it will be a huge relief to get the smaller of the two loans paid off.  However, I was thinking instead of doubling up on payments for school, maybe I would just buy a car.  My car is running fine now and is in good condition.  My husband thinks I could get maybe 3k-4k on a trade.  Or do I want to focus on paying off my school loan and then see about buying a car in January at the start of the new year.  BUT on the other hand, we have been hoping to buy a house around this time next year and I worry about buying a car and having that debt on top of my school loan debt.  Our original house plan was that I'd pay off the first bit of my student loan and what little I have on my credit card.  I don't currently have a car payment so that's a huge help.  My husband has a car payment and has a small amount of student loans to pay.  Ideally I know the best answer would be to just make do with my car until we can see how much we qualify for buying a house, but I'm worried that the longer I wait the less I will be able to get on a real fear is that my car will die completely and I won't be able to trade it for anything and I'll be forced to buy something to get by rather than something I really want.  This is a whole lot of if's and but's but just wondering if anyone could give their outside opinion on this.  My husband thinks I should wait until January and look for a new car to trade mine in on...but I don't want to screw us up on how much we can qualify for on a house.  Thanks!!

Re: when to buy a car

  • I would say when the car dies or you have to pay more to have it fixed than it is worth putting money into. I would just keep driving the car and saving on payments!
  • My brother is trying to make a similar decision about his 99 Cherokee.  For me, a repair costing more than $2,000 is when I consider the car dead. Otherwise it will almost always be cheaper to maintain than have a car payment.  Who knows, you might get another three years out of it.
  • Yeah keep the car. It may surprise you and last awhile longer.
  • I would drive it until the wheels fall off. Hopefully doing the small repair will help it "limp" along for a good while longer. That's what we have done with my H's truck. It is so much better than having a car payment!

  • I think the estimate is a bit high on the trade in...if you look at Kelly Blue Book values, they range from $1900-$2900 depending on the condition (fair-excellent).

    I'd keep driving it, but at the same time assume that you are going to need a new car in the next 2-3 years, and possibly at any moment.  Instead of doubling down on your loans, I'd probably save half of that "extra" money for a new car down payment.  I'd also research and have a type of car in mind so that if you need to buy a car ASAP you already have an idea of what you want. 

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  • For now - fix the car.

    Then pay off your credit cards

     Next,  add extra to your DH's car payment and pay that off.  I would get rid of his car payment before buying another vehicle.  Then only buy what you can afford and not finance longer than 3  years (better yet - pay cash for a used vehicle)

    Before buying a house - have an emergency fund in place, your down payment, closing costs and moving costs as well as start up/repair/renovation costs -- decorating, furniture/appliances and yard items along with tools.  AND keep your total housing costs no more than 25-28% of your TAKEHOME pay (30-35% in HCOL area)  That incluseds mortgage+PMI+insurance+taxes+utilities + HOA if applicable.

    Whew! - unless the student loan is at a high interest rate I would not primarily focus on it.  Perhaps split what $$ you have to work with on SL & Car loan & CC.

  • don't forget to factor in the increased cost of car insurance when you buy a newer car as well. I would assume you don't currently have collision and would need to get it if you financed a new car, that can more then double our insurance premiums. The longer you can drive that baby the more money you will be able to save, honestly you aren't losing much in trade in value at this point that you wouldn't gain in a couple months of not paying a car payment.
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