Monday, November 3, 2014

HELP - I need your advice!

Good morning, blog world!

I mentioned in my monthly update post that it's time to buy a new car. Unfortunately, that means I'm adding on a car payment in the midst of trying to get rid of debt. It's safe to say this is not a happy decision for me but unfortunately it is necessary.

As I look at what I can afford, I am completely torn. A newer, nicer, reliable car will likely last me 10-15 years, but it hits the max of my budget, which is already as tight as can be thanks to this spending challenge. This loan will last 3-4 years, which means I couldn't incur any further expenses for the next 3-4 years unless my income drastically improved and I would barely make a dent in additional debt payments with my paycheck alone.

However, if I look at an older car with higher mileage on it, it will cost me a few thousand less total but will likely only last 5 years max and the chances of it requiring repairs is obviously higher.

Thankfully, I have found a wonderful credit union who is offering 2.99% interest on any car loan I get, which is the best deal I've found so far. That's the only silver lining I have found so far.

I am frustrated to be adding to my debt when I am trying so hard to reduce it. I'm frustrated that I have worked several jobs for my entire adult life and yet I'm always pinching to make ends meet. I'm frustrated that in all my years of learning about finance, I'm still in this situation. There are so many times I could have been smarter and I'm kicking myself for not applying what I've learned. I'm scared that I will take on more debt, be in over my head and not be able to get myself out of it. I'm scared that I'll take out a loan and something horrible will happen to the car and I'll be in big trouble financially.

I am trying really hard to set aside my emotions and do the smart thing. But to be honest, I'm not sure what that is.

Have you bought a used car? What models are good? How much mileage is too much? What would you do??

6 comments:

  1. I hope you get some good advice because I'll need it too soon :) We bought a used car last Dec. from Luther Hopkins Honda - but it was an atypical situation. The car was only 1 yr old, had been a company car, no accidents, and only had 15K mileage - and b/c of that it was a bit more $$, but worth it when we weighed the risks of other older, higher mileage used vehicles. However, we're looking to buy another one in 6 months and there's no way we can afford something the same price was last time.:/ So, we're in the same situation with the same concerns. Cheaper, more mileage that burns out faster. OR spend a little more for something better and hope it lasts longer. Such a dilemma!!! Wishing you good luck and if you end up with some great advice please pass it along to the rest of us used-car noobs :)

    ReplyDelete
  2. I would definitely go used. It certainly isn't as exciting as buying a brand new car with all the bells and whistles but right now for the situation that you're in, I'd definitely recommend going used. I bought used back in 2007... spent $15K for my Ford Escape which was 2 years old at the time. 7.5 years later I'm STILL driving that same SUV (knock on wood!) and while I've been tempted so many times to trade it for something new and 'sexy', it just makes no sense. I have no payment so I will drive that sucker until I can't anymore. Sure, I've had repairs here and there but nothing substantial at all... not even close to making me wish I had bought new. I'd buy something used that's as cheap as possible, all while being safe and reasonable, of course. At least in another few years you'll be in a much better position financially and can then go new if you choose. Good luck!

    ReplyDelete
  3. I bought a used Hyundai back in 2006. It was 3 years old with 30k miles and I'm still driving it today. Only maintenance has been routine oil changes and a few minor things here and there but definitely nothing big enough where upgrading would have been a better option. Seeing as my car is also always parked outside I have a fear of buying something nicer/newer if it's going to go through MN winters sitting in the snow and salt every day.

    ReplyDelete
  4. I think used is fine, but I would definitely get a Certified Used, so that way you know what kind of work has been done, any accidents it's been in, etc. so you can feel safer about what the future holds. You can often times get great deals on used cars, and many kinds (Honda, Toyota, Mazda, etc. can last YEARS and years and years)! Also, 2.99% is a fantastic interest rate, but also check with the local car companies! For instance, my Aunt just bought a brand new Nissan because the dealership was offering 0% financing for the first 24 months (not positive on the details on what it would be afterwards), but it was a great deal for her!

    Whenever we buy a car (new or used) I just tell the dealership how much I want my max monthly payment to be (I always say $25 less then I want because you know they will always make it higher), and tell them to show me whatever options they have that will give me that monthly payment.

    Good luck!

    ReplyDelete
  5. We purchased a 2006 Chevy Impala in November of that year from a guy who was getting a divorce, and as part of the settlement, he had to get rid of the car. We hit the jackpot when we purchased for his total loan amount, which meant the car would be worth more than we owed! Paid it off in two years, and it's been pretty reliable ever since. I've had a couple weird breakdowns due to the car's computer system, but overall I'm content driving that sucker into the ground. I can't help but feel that all the fancy computer crap these newer models have contributes to their downfall, making repairs costly. Then again, I don't take much of an interest in cars so I can only give you an opinion on the one I drive. :)

    ReplyDelete
  6. Great Content. I appreciate getting this reliable information from you.
    Thanks for sharing this great content. I love reading your posts. They are inspiring. I have some relevant information you can review below.
    buy car
    sell your car for cash

    ReplyDelete