Should we buy new?

[Thermo1223]

Situation is as follows:

Sold Forester to get rid of a high monthly payment because of the negative equity from a previous loan before it. I consider it a smart move.

I then purchased a 2004 Jetta TDI to act as the family shuffler on long trips but I do miss the AWD and driving a manual everyday. Granted I will not be driving a manual again for quite some time. Payment is much, much lower and biweekly so it will be paid off quicker.

Wife's lease on the Mazda 3 will be over in a year or so and with child #2 quickening arrival(less than 2 weeks) I am again wondering if 2 car seats in the back of Jetta will be a struggle. Wife's lease payment is more per month than the Jetta's loan. Getting that out of the monthly budget would be great! I can easily sell the Mazda outright and be a bit ahead on the deal.

So I am left with a dilemma. Should we buy a new SUV with some form of AWD or what I prefer a Certified Pre-owned. This is big money to the tune of at least $20,000. We could work the payment but I would prefer not to. This would be the wife's DD.

Or,

Buy a used SUV max $2k-3k 4x4/AWD vehicle as the new family hauler in bad weather and let my wife commute with the TDI(she drives more). I would then DD the 4x4/AWD vehicle since my commute is 1/5 what she drives daily. No payments, lower insurance, easier budget for the monthly quota.

We have the money in cash from her 401k, we pulled a good chunk out for home repairs/renovations. I could also maybe get my in-laws to loan me another $2k as well but I really don't want too because well, I hate asking considering the help they already provide.

My thoughts if the vehicle last till my 2nd child turns 3 it was a good choice. I am seeing a lot of older Jeep GC w/ the I6 in this range so that certainly seems plausible since that I6 well could be used as boat anchor and still run. Fuel economy isn't a huge concern considering we will need an SUV, we know this and will just deal with it accordingly.

Open for opinions!

 

[Quest]

LOL! 2 car seats at the back of jetta would struggle? Think honda fit where I now have 2 child seats to shuttle my kids between daycare, schools, etc. and it's been serving me/ma kids/family well.

Q.

 

[IndyIan]

I was thinking a TDI wagon would be a great family hauler.
I guess its up to you if "need" an SUV, unless you tow something bigger than 1500lbs or need 4wd with low range. I find for our normal uses, a FWD wagon with snows does everything an SUV would.
A $2-3k GC sounds kind of risky but I guess if you have a good mechanic, they can fix alot of issues for car payment money in a year.
If the buy out is lower than market value for the mazda3, I'd wait and buy it and see how you get along with the two wagons. Smaller car seats and double strollers exist as well so you don't need a huge vehicle to go places with the family.

 

[Quattro Pete]

Using money out of a 401K to buy a car just does not sound like a smart financial decision to me.

I don't have any kids, so I may be a little uneducated here, but why would 2 car seats in a Jetta be a hassle? Is the back seat really that small?

 

[Eddie]

Don't take money out of your 401K. Buy used SUV and no more leases. JMO.. Ed

 

[azjake]

How old is your wife? If she's less than 59 and a half there are tax implications of pulling money out of her 401K. Unless it's treated as a loan that has to be paid back within a certain number of years (I believe it's five) you will owe tax on that money plus a 10% penalty.

 

[dave1251]

I have been guilty of this so take it from someone who has been there done that. Do not borrow money if you do not have to.

 

[MrCritical]

A $2-3k 4wd is going to be a money pit.

 

[Thermo1223]

It is a loan(sorry, crucial info!). Paying yourself back at 3% isn't a bad deal if you ask me all things considered. We didn't take it out for the car though but are considering using some of it if we must.

While I don't think it will be a struggle in the Jetta Wagon it certainly will in the 3. The back seat isn't made for the huge car seats of today.

Towing(maybe) and with snows our hill & backroads are passable with AWD. I wouldn't want to try with FWD but then again I've been spoiled by the Forester as it would cut through anything with ease.

The whole reason the Mazda is a lease was we'd know our situation would change and it fit our monthly budget better than buying. It has been a great car(sans the early trans replacement) but it just won't be big enough. We were looking at compact SUV's mostly as well.

 

[supton]

I found that the enormous rear facing child seats do fit in my '04--however, I hope you're short. I'm 5'7" and sit relatively close to the steering wheel (not sure how far) but luckily I didn't have to move my seat forward. But the wife in the front passenger seat would have had to move forward--ergo, the rear facing seat was always behind me.

Reaching the LATCH anchors was a problem with the leather seats. Not impossible, just hard to feel them down there, and the seats are kinda stiff too. I believe three boosters will go across the back, but I've never tried (my kids are 5&7 now, so we're in the much smaller seats now).

I'd keep the car. You can always sell it later. I run 185's with dedicated snows in the winter; and as long as I don't highside it, or try to go up a hill, it does ok. The mpg's and driver's comfort go a long ways on the commute. I know some people have done the conversion from 4speed auto to 5spd stick; but I don't know if anyone has bothered to do that on the latter 5 speed autos.

 

[JTK]

I've done loans several times from my 401K. It's nice if you take out that chunk of money when the market is high, then it tanks shortly thereafter. Other than that, you have to consider that amount isn't 'working' for you while you've got it out on loan.

Regardless of all that. Is a small car a struggle with two car seats? Not really. Coming from a father of four. Now 10, 8, 6, 1, I'd consider it a piece of cake now. You will be able to safely place two full-sized car seats in something like a Jetta.

Our break point was with 3 kids that required car seats. That's when the primary vehicle became a minivan, which I've grown to LOVE to own.

Joel

 

[Thermo1223]

Ya the wagon is definitely staying and when the 5sp auto does fail it will be going to manual. It drives fine now but doesn't have ESP which kinda annoys me considering it has everything else for the model year. It is her Mazda that is the pressing matter. I will have to look into snows for the winter only the because the current tires that were new from the dealer aren't snow friendly for the Jetta.

 

[supton]

Just re-read the OP, for some reason I was thinking it was about getting rid of the Jetta. Must be a Freudian slip on my part.

New is always nice, but pricey. Plus, are you planning on sticking with just two kids? Three is going to be miserable in anything w/o a third row.

How far is your commute? You might be on the right track with the ancient 4wd for 3k. If only because you could always walk/bike if it's in the shop. That way, you're out the least, and have the most open in case things change the in future.

 

[Thermo1223]

LOL I wish I could answer on the third child part. Who knows...

I do agree and as much as I hate to admit to owning one(gulp) I've looked at Highlanders...

3-4 miles when the children won't be attending daycare. I considered riding a motorcyle and sticking to one car only for a while as well.

 

[Astro14]

Several thoughts:

1. Learn to separate "need" from "want"...I see a lot of wanting, but in my case, until the 3rd child came along, along with a big dog, a Volvo 240 wagon fit the older 2 children and their stuff just fine. I did need a larger vehicle, once the family size increased...I bought an Expedition. Now, I don't need anything that big since we don't haul the kids all around (the cars in the signature are for them, me, and my wife...).

2. You don't need AWD unless you live on a mountainside and need to climb it. What you really need in the mountains of PA, is 4 dedicated winter tires on a car with ABS. Aforementioned Volvo (RWD) was great in climbing the mountains of Vermont and went by many stuck AWD cars thoughtfully equipped with all season tires by their flatlander owners.

3. Live within your means, don't borrow anything from your 401K, buy only what you can afford. Pay cash or take a max of a 36 month loan if you have to...but cash is best.

4. The greatest expense in vehicle ownership is depreciation. So, if you're on a budget, don't buy new. Buy a vehicle that is 3 - 6 years old - the "knee" in the depreciation curve. Case in point: bought my 2002 Volvo when it was 5 years old, for $13,000. 5 years later, I am still driving it. It's worth about $6,000 now. So, I've lost about $1,400/year in depreciation. The original owner paid $42,000 for the car - he lost over $5,000/year in depreciation (traded it in...). My old 240 was even better - paid $3,400 cash, fixed it up for $600 in parts. Drove it for 10 years...do the math...

Time to get off the spend/debt cycle in which you're trapped. You're going to need to be solvent when these kids get to college - and buying too much car, paying interest on that loan, eating the depreciation, are all ways to burn through your income when you can least afford it...

FWIW - all the cars in my signature are paid for, I have no car loan. Most of them were bought for cash, all were bought used. I have a substantial 401K/invesment portfolio, built over 20 years of saving/investing...I could have been driving really nice cars (and making big car payments) over those 20 years...guess which was the better choice?

 

[Oregoonian]

Originally Posted By: Quattro Pete
Using money out of a 401K to buy a car just does not sound like a smart financial decision to me.

I don't have any kids, so I may be a little uneducated here, but why would 2 car seats in a Jetta be a hassle? Is the back seat really that small?
Totally agree.....taking money from a 401K...was not a wise and prudent move....to purchase a depreciating vehicle.

Be satisfied with what you have...and live with it.

 

[Oregoonian]

Originally Posted By: Quattro Pete
Using money out of a 401K to buy a car just does not sound like a smart financial decision to me.

I don't have any kids, so I may be a little uneducated here, but why would 2 car seats in a Jetta be a hassle? Is the back seat really that small?

Totally agree.....taking money from a 401K...was not a wise and prudent move....to purchase a depreciating vehicle.

Be satisfied with what you have...and live with it. Purchasing a NEW vehicle is foolish as well.

 

[supton]

I've looked into adding ASR, and I'm told it's as easy as changing the ABS pump. The harder part is putting in the disable switch on the dashboard. At least that's for the manual transmission model I have.

If I were buy new or slightly used, right now, I'd probably go RAV4 on my part. The ability to lock the center diff (granted, it will unlock at 25mph or so) and high mpg's in the 4 cylinder model apeal to me (plus we have the Camry, so it could go to the same dealer). The V6 model is rated for 3,500lb with the towing package. No towing package on the I4 -- but -- since it's the same frame you aren't forced into a Class I hitch. I'd add a transmission cooler if I was going to tow up to 2k or so, otherwise, it'd just need trailer brakes for anything over 600lb (as per manual). Of course it lacks 4LO, but I really don't need that for my sedate driving.

I'm not sure I'd pack the family into an older car for long trips. Partly safety, mostly reliability. That, and the Jetta is going to do better on mpg's for long trips. We only take our Camry on long trips as it's just got more interior space (and is more quiet). I'd think an older 4wd would drive me bonkers on long drives.

 

[fxrider]

Stick with what you have.

 

[supton]

Originally Posted By: Astro14
2. You don't need AWD unless you live on a mountainside and need to climb it. What you really need in the mountains of PA, is 4 dedicated winter tires on a car with ABS. Aforementioned Volvo (RWD) was great in climbing the mountains of Vermont and went by many stuck AWD cars thoughtfully equipped with all season tires by their flatlander owners.


I disagree. Not strongly, and I agree with need vs want: but I get my VW stuck about every other year, despite aggressive snow tires. I'm not sure how much different the hills of NH are relative to PA. But any time the front end of my car points upward, it's liable to lose traction.