Should we buy new?

[Thermo1223]

Originally Posted By: IndyIan
Originally Posted By: Thermo1223
Not getting rid of the Jetta! lol It's the Mazda!

Trust me on the need for awd part here it is a requirement and whatever vehicle that will be will also have snows! I don't drive in the winter with anything less.

So how can you still keep the Jetta then? I have a hilly 1/4 mile driveway which makes AWD nice to have, as some days the Neon with snows won't make it until I plow, or if its really really icy, so I leave it at the road and get some exercise. Once I'm out on the public roads though I've never got stuck with the Neon.


I will make due but one car with AWD isn't a horrible thing is it?

That was the point of this finding out if it is a good idea financially to risk cash on an older vehicle or buy new(ish) to get the warranty and such.

One side is a cash & done deal the other is a loan again.

For the record I am 5'11" but might as well be 6' in some cars.

 

[mpvue]

I've lived in Easton 17 years and have never 'needed' AWD. where exactly is your commute?
someone else talked about separating needs from wants. we just finished 2 years with ONE car; granted, my wife doesn't work outside the home, and it was still inconvenient at times, BUT we made it work to save some money.
we have 3 kids too BTW...
I'm not going to tell you what to do; honestly, this is the WORST place to ask for advice (you've already experienced pop rivit's advice; try talking to him about food sometime...)

 

[Dakota1820]

Amen!!!!^^ that was out of line going off on you like that. Thermo1223 I dont blame you for not taking it either. But don't feel bad every darn time I ask a question in similar form to yours I get attacked to. People dont realize they dont understand your life or your situation. Make a smart decision based on facts and you'll be fine. If it was me I wouldn't want a payment but you have to make sure whatever you buy wont be a money out either otherwise its easier having a payment. For 4 grand you can get a reliable something. I agree with above I like the vues a lot not sure I'd want to work on than kinda v6 though some ha e an scorecard easier to work on but probably not as rewarding to drive. Heck buy an Aztec no one wants them so they're cheap. I don't see anything wrong with them other than they were ahead of there time. Whatever you buy just be smart about it and don't let the annoying garbage people spout off bother you.

 

[Thermo1223]

My actual work commute is all in the city, her's is back roads or I78. In bad weather we both have to be at work. With her it is no excuses, with me it is a tad more flexible but I still must get there. That is why with snows on the Jetta it would be ok, not good or great but ok especially if I have to cart the little ones off to daycare which automatically means I'm taking again backroads or I78. My work is in Easton, her's Allentown. Daycare is in Hellertown so somedays I'm driving maybe 8-10 miles the whole day, others it is more like 50 depending.

I worked on the one car idea already, it would be doable as well. Inconvenient but doable...

We live off on 611 which like the entrance to our house is hardly plowed proper hence why I would "like" AWD again. I know I could get by without it but having the Forester before spoiled me to that really. I know it is a want but I have my reasons for it.

Edit: I know you get this on every forum just thought BITOG had a little more tact...

 

[Astro14]

Originally Posted By: Thermo1223
We do live on a mountain side...hence the need for AWD w/ snows. If you see the grade we climb daily you'd understand why and then to get to the highway is more poorly maintained(in the winter) roads which are usually unplowed for the better part of a day.

Like I said driving with the Forester w/ snows spoiled me because before that I was using fwd w/ snows and the difference was pretty drastic.

We do have a big dog though

I am not saying we will need an SUV 100% of the time but for the 75% of the time we do it seems a prudent choice.


Lived on one in Vermont - gave a few rides up that steep slope in winter (ice was worse than snow) to the out of state owners with their AWDs...on which they had all seasons...and yeah, it was really steep. I learned to drive well. Alternatively, how many days a year is your road undriveable? One? Two? Five? Sure would be cheaper to call in sick or miss pre-school on those days than to buy a new car...which you would only need, tops, about 2% of the time...

Again, I think you're stating "nice to have" vs. "need"...you even used the words "miss" and "nice"...

So what? It would be nice to have a new Jag convertible, or maybe a '63 split window Vette...I live near the beach, I sure could use a fun car for beautiful sunny days like today...and I could easily borrow the money from my 401K to do it...and pay that money back...shoot, I could buy a new MB with that loan...and it sure would be nice...

But until the kids are out of college, and I have my long-term goals met, those are still just wants.

Look, from what you've stated so far, you really don't have enough scratch to buy anything right now, and you're talking about scraping up $2K here and there...what happens to your cushion for emergencies if you do the "cash and done" deal?

Dial back your expectations to fit your budget...I could write a check, from my checking account, for a new Accord...but I don't...that $$ is set aside for College and unforeseen expenses...

That's where you need to focus, on budget first, car second...then, when you're my age, you'll be glad you did...

 

[Astro14]

Originally Posted By: HerrStig
It's amazing what bling bling people think is necessary these days.
WHat will the neighbors think? How did families ever get on without an SUV?


When I lived in Colorado, SUVs first were becoming popular - I was making good $$, saving nearly 50% of my after-tax income, driving an 18 year old MB 240D...and looking at all my neighbors' fancy new SUVs...someone said, "wow, all these people must be making more than you..."

I replied, "I doubt it...but they sure do spend more than me..."

 

[KrisZ]

Quote:
I sold the Forester ouright because it had a loan with higher interest & a higher monthly payment... So it was a smart financial decision considering the terms on the new loan for Jetta and other factors like fuel economy & transmission...


I'm not exactly sure that it was such a smart move as you claim, more details would be nice. If you were upside down on the Forrester, then that did not magically go away, but instead got rolled into your existing Jetta loan, unless you put down a sizeable down payment. Since the value of a 04 Jetta TDI should be comparable to a 05 Forrester, the only way the monthly payments are lower is because the loan is stretched out over a longer period. In the end you traded in a higher monthly payemnt for a lower one that lasts longer, at least that's what I'm getting.

Look at it this way, you are still paying off a car that is 8 years old, that alone sends red flags.
Assuming that your Jetta is in good mechanical shape and since you're so keen to use your 401k to buy another car, I would use the 401k money to fully pay off the Jetta (assuming the interest is lower) and buy a 5-6k SUV or CUV as a second car with that money as well, it should be in descent shape for short trips. Then I would focus on paying off that 401k.

 

[Dakota1820]

If he wants and kind of needs a awd and can afford it what's the problem? Don't go into debt and strap your self but if you could go out and get a4-5k vehicle and pay 2000 down in it and make payments on the rest as lo g as the payments aren't to high and the vehicle is decent that's not a bad way to go. I agree with having a savings and its great to have one and is important but if you can afford 2 cars and it makes life a lot easier as long as you do it practically what's the problem? Having one car is doable for most people but if you don't absolutely have only have one. Say his wife breaks do w while out somewhere or something bad happens having two cars isn't stupid as longas you have a reasonable approach to what your getting sounds like having a awful isn't that far fetched. Sounds reasonable to me. If you were wanting a Lamborghini that would be foolish and bad money but buying an awd doesn't seem ridiculous. If you are going to buy a car anyway and you dobt already have an awd one and it would be better for you I say go for it. Where I grew up we bought cars and they were trashed in a couple years because are road was so bad. We bought a Jeep and it held up much better. The door trim used to fall off of our car's because the road was so rough. Some people just need suvs and such. Find something you can afford don't break the bank or put yourself under to much load and you'll be fine.

 

[Dakota1820]

Krisz: that's good advice. More than one way to skin a cat!!

 

[Thermo1223]

I sold the Forester outright(IE not traded in) to another person and by definition that paid the loan off in full. Nothing was rolled over. It did however have negative equity from another car purchase I made years prior. That is why the payment was so high at that point I was paying for 2 cars.

The Jetta was bought below market value and is being payed Bi-weekly through my credit union. Their rate is 30% lower than the Forester was. I also make higher payments when I get the chance, so it will be paid off a lot quicker.

Jetta TDI's(especially wagons) are ridiculous when it comes to pricing almost like paying over $5k for a 200k+ mile Civic or Corolla. Their resale is stupidly high, I was lucky to find one below market so I ponced on it.

 

[KrisZ]

Originally Posted By: Thermo1223
I sold the Forester outright(IE not traded in) to another person and by definition that paid the loan off in full. Nothing was rolled over. It did however have negative equity from another car purchase I made years prior. That is why the payment was so high at that point I was paying for 2 cars.

The Jetta was bought below market value and is being payed Bi-weekly through my credit union. Their rate is 30% lower than the Forester was. I also make higher payments when I get the chance, so it will be paid off a lot quicker.

Jetta TDI's(especially wagons) are ridiculous when it comes to pricing almost like paying over $5k for a 200k+ mile Civic or Corolla. Their resale is stupidly high, I was lucky to find one below market so I ponced on it.



That makes more sense now, still I would try to pay off that Jetta before getting into another loan and get something used as a second car, provided the Jetta can be trusted as the main family hauler. Pay the loans off and continue paying the loan amount to myself for few years, otherwise you will be always stuck chasing lower monthly payments.

 

[Thermo1223]

Ya and that is what makes more sense to me but I have the nagging thought of the other used car biting me in the butt.

 

[PandaBear]

Originally Posted By: DemoFly
Never buy new. Financial masochism.

Used doesn't have to mean 50k to 100k miles. As long as you are not the first owner and don't drive the car off the lot you save thousands.

When I bought my Saturn VUE (BTW Fantastic vehicle with Honda V6 and AWD) we got it for $6k less than new with only, IIRC 5-8k miles?


Depends on the car. Many extremely reliable models with good quality are hardly any cheaper after 1 year and 10k miles compare to a new car with factory incentive. I've seen some friends who sold their car at 1 year and break even or made money from their new purchase price (that's extreme, and not a guarantee).

But for a car that has very high resale value (i.e. a Prius or a Civic), it doesn't make sense to buy used unless you are looking at 6+ year old model. On over produced models with rental car fleet sales, I agree with you that you should never buy new.

 

[JHZR2]

Originally Posted By: PandaBear
Originally Posted By: DemoFly
Never buy new. Financial masochism.

Used doesn't have to mean 50k to 100k miles. As long as you are not the first owner and don't drive the car off the lot you save thousands.

When I bought my Saturn VUE (BTW Fantastic vehicle with Honda V6 and AWD) we got it for $6k less than new with only, IIRC 5-8k miles?


Depends on the car. Many extremely reliable models with good quality are hardly any cheaper after 1 year and 10k miles compare to a new car with factory incentive. I've seen some friends who sold their car at 1 year and break even or made money from their new purchase price (that's extreme, and not a guarantee).

But for a car that has very high resale value (i.e. a Prius or a Civic), it doesn't make sense to buy used unless you are looking at 6+ year old model. On over produced models with rental car fleet sales, I agree with you that you should never buy new.


+1. Agree totally. Need to look at it on a case by case basis. Key takeaway is that debt is not putting people into "better" positions unless used VERY carefully and with a very specific plan, AND that the user of said debt is capable, both fiscally and maturity-wise to shed it ASAP.

Otherwise it is a trap.

There is a reason why so many are in such poor situations in this country - its not all "icantfindajobitis"... Its poor decisions.

Sounds like the OP is making good ones to walk their way out of the bad ones. Good.

I can also understand the perceived need for AWD for folks who HAVE to be somewhere. Ive spent 30 years in and out of Monroe County, PA in the mountains, and only a handful of times in the snow has there been an issue. But can appreciate the mentality for certain jobs, e.g. if the OP's wife is a nurse.

I just would recommend again to the OP to set a workable, managable plan that leaves good buffer for the unforeseen, and avoid debt at all costs on a depreciating asset. May have to get the hands dirty though!

The first detail the OP needs to provide is the full situation on the Mazda. Condition? Tires? Dents? Overmileage? Leasing is always a poor decision as the interest is higher and they have you over a barrel at the end, just for the vanity of a "new" car. But the OP is in the situation he is in, so full disclosure can help work out the best plan. Also OP should disclose budget for a car, savings, monthly payment capability (usually assume only one spouse is working as a good bet).

 

[SteveSRT8]

around here if we buy something new we keep it forever. Minimum of 8-10 years if it's a good vehicle. Then it's no hardship.

Last new car we bought was expensive, but we paid it down in 2.5 years and it has proven to be a great car so it is also going into the long term ownership program. I still hit the auctions frequently and always keep a nice little cash kitty for a hot deal on something nice, but it has to be exceptional.

Our fleet vehicles are always purchased new as they make money.

 

[crinkles]

we have three child seats across in an 05 Camry. Can be done. Two seats in the back of a Jetta? Don't see the problem.

 

[Shannow]

Me, if I had the need for a roomy SUV for low miles per annum (and didn't live in Oz with ridiculous insrances etc.), I'd get a guzzler, like a 4Runner.

Reliable and rugged, can go anywhere, people are leaping out of them for mileage, but at only a couple thousand miles a year, it doesn't really matter.

 

[dwcopple]

Originally Posted By: JHZR2
Leasing is always a poor decision as the interest is higher and they have you over a barrel at the end, just for the vanity of a "new" car.

So my lease of my '11 Civic (0 down, 0 first month payment, 35 mos @ $190) was higher interest and they have me over a barrel even though I fully intend on walking away from the car when it's done?

 

[KrisZ]

Originally Posted By: dwcopple
Originally Posted By: JHZR2
Leasing is always a poor decision as the interest is higher and they have you over a barrel at the end, just for the vanity of a "new" car.

So my lease of my '11 Civic (0 down, 0 first month payment, 35 mos @ $190) was higher interest and they have me over a barrel even though I fully intend on walking away from the car when it's done?


If your Civic will be within mileage allowance, will have no dents, paint chips and scratches, will have tires with enough thread and brakes that can pass safety, then yes, you can just walk away from it. But at the end of the day you will have no car to show for even though the deal was great. From a purely financial view, leasing is the worst form of car ownership for majority of people.

 

[JHZR2]

Originally Posted By: KrisZ
Originally Posted By: dwcopple
Originally Posted By: JHZR2
Leasing is always a poor decision as the interest is higher and they have you over a barrel at the end, just for the vanity of a "new" car.

So my lease of my '11 Civic (0 down, 0 first month payment, 35 mos @ $190) was higher interest and they have me over a barrel even though I fully intend on walking away from the car when it's done?


If your Civic will be within mileage allowance, will have no dents, paint chips and scratches, will have tires with enough thread and brakes that can pass safety, then yes, you can just walk away from it. But at the end of the day you will have no car to show for even though the deal was great. From a purely financial view, leasing is the worst form of car ownership for majority of people.


+1.

dwcopple, the real question is,what is the money factor on your lease? Let us know and then we can see how good of a rental deal it actually is. Most just look at it as what's my payment, and then that's it. A civic likely has a good retained value, so the amount you are actually renting is a smaller slice.

But why not tell us the MF and we can see from there.

Look at the current civic lease...

http://automobiles.honda.com/current-off...p;sf=2&ft=2

You (Im not saying you, dwcopple, just 'you' for convenience in typing) end up paying out $7700 on a car with capital cost of $19100, and an option to buy at the end of $11952.

You started off giving them $595 just to originate the lease.

Then you end up paying $7148 (capital - residual) to use the car over 35 months... Since the monthly fee is $220 in this case, you are paying the delta ($552) to rent it (on top of the $595 you paid at the start). $552/35=$15/month in interest

int cost = MF x (net cap + res), so MF = int cost/net cap + res) = $15/(31052) = 0.000483

MF * 2400 = APR = 2400*0.000483 = 1.16%

Sure, that's not bad, but the purchase of the car is actually at 0.9%.

If you consider the origination fee into the interest, the effective rate is actually double, so the leasee is paying 2.3% when the purchase was at 0.9%.

Rough numbers. See how I got that?