WWBOTBD? Re: insurance and new car

hippotree · October 2010

The insurance company totaled our car, which we had paid off. We do have a second car that is not paid off. The monthly payment is super cheap ($150) and we actually usually pay double that amount and apply it to the principal. However, the interest rate is like 6-7% (I think).

Between the car and PI settlements, we have enough for one of these two options. What would you do?

[Poll]

war_eagle · October 2010

I've become a huge fan of buying used, so that is what I voted for. Nice to have those options!

hippotree · October 2010

war_eagle:
I've become a huge fan of buying used, so that is what I voted for. Nice to have those options!

I guess I am just worried that we won't be able to find one that was as well taken care of and with low miles like ours.

DrBeepersWife · October 2010

I'm with kdodge, I never buy new. Buy used and payoff car #2.

YAY for no car payments!

weelass24 · October 2010

If you go with option #2, will you own both cars outright? I am assuming with option #1, you will pay cash for the whole thing, correct? Also, how many more payments are you making at 7%?

pinkflipflops44 · October 2010

hippotree:
war_eagle:
I've become a huge fan of buying used, so that is what I voted for. Nice to have those options!
I guess I am just worried that we won't be able to find one that was as well taken care of and with low miles like ours.

I have honestly only ever bought used and if you go to the right dealer you will find a great deal. The car I drive now was 2 years oldwhen I got it and had not a lot of miles and I have only had to take it in twice to get things worked on (a timer and something came loose underneath). I have owned it for almost 4 years now. I am waiting for 2012 to buy the 2010 model of the vehicle I want next.

hippotree · October 2010

weelass24:
If you go with option #2, will you own both cars outright? I am assuming with option #1, you will pay cash for the whole thing, correct? Also, how many more payments are you making at 7%?

Yes, with option 2 we would own both outright. And with option 1 we would only buy what we have cash for.

I am not sure how many more payments we have on the second car - lots - but it's such a small payment.

ETA: We'd be looking for a 5-year old car with about 50k miles. I just feel like a lot could go wrong with a car like that.

weelass24 · October 2010

hippotree:

weelass24:
If you go with option #2, will you own both cars outright? I am assuming with option #1, you will pay cash for the whole thing, correct? Also, how many more payments are you making at 7%?
Yes, with option 2 we would own both outright. And with option 1 we would only buy what we have cash for.
I am not sure how many more payments we have on the second car - lots - but it's such a small payment.

I can't answer until I know what is left. Smile Do you know when you took the loan out and for how long? (60 months? 72 months?) Also, what kind of car is it?

weelass24 · October 2010

hippotree:

weelass24:
If you go with option #2, will you own both cars outright? I am assuming with option #1, you will pay cash for the whole thing, correct? Also, how many more payments are you making at 7%?
Yes, with option 2 we would own both outright. And with option 1 we would only buy what we have cash for.
I am not sure how many more payments we have on the second car - lots - but it's such a small payment.

ETA: We'd be looking for a 5-year old car with about 50k miles. I just feel like a lot could go wrong with a car like that.

That is what extended warranties are for. Also, shop online. You are not limited to your area anymore. It might be worth it to drive a few hours for a really good deal.

hippotree · October 2010

weelass24:
hippotree:

weelass24:
If you go with option #2, will you own both cars outright? I am assuming with option #1, you will pay cash for the whole thing, correct? Also, how many more payments are you making at 7%?
Yes, with option 2 we would own both outright. And with option 1 we would only buy what we have cash for.
I am not sure how many more payments we have on the second car - lots - but it's such a small payment.

I can't answer until I know what is left. Do you know when you took the loan out and for how long? (60 months? 72 months?) Also, what kind of car is it?

We owe 9K on it - I'm pretty sure it was a 60-month loan. It's a 2008 Mazda 3.

The other car was a 2006 Honda CR-V.

weelass24 · October 2010

Well, if you are paying $300/ mo, and stick with that, you are looking at another 2.5 years of car payments. Now, I am a new car person, but I also loathe a car payment.

I would say if you can find a used car that you are comfortable with, then do that and pay off the Mazda. Most of the manufacturers are looking to clear out their 2010 inventories, so you might be able to get a very good deal on a new car and still have some left to pay down the Mazda.

I would also consider what you would do with the addtional $300 a month, if you were to pay off the current loan. Is the benefit to you greater putting that money somewhere else?

Lyssapee · October 2010

I'm not a fan of debt, I would buy new and keep the car payment Obviously your car was great but I would get something with new because it will have newer safety features. Maybe something a little bigger too.

OR what you could do is get something that's practially new and pay off a chunk of the car payment.

I got a corolla that was 6 months old and had about 4k miles onit. It was a loaner car and I saved like 4k because of that.

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