I’ve mentioned before that D’s parents loaned us a car while he was in grad school. It was technically already loaned to his sister, but since she lived in a very car unfriendly city, she was OK with us taking it for a few months. However, she’s now moving, and our loan has been called in.
This, by the way, is perfectly reasonable. We were very lucky to have that car, but now that we are back to having two incomes, it’s more than fair that we pass it along. Unfortunately, though,this means we’re now down one car.
The way I see it, we have a few options:
1. Live with one car.
We did this for over a year when we lived in LA, and on and off while we lived here in VA. It wasn’t impossible then, but things are a bit trickier now. Before, we either worked in the same city or one of us could take the Metro. Now, D works nearly an hour away, so I would have no access to car all day. This is not an insurmountable problem, since my job is very close to our apartment. I could walk or bike many days, or D could drop me off and pick me up.
I’ll be honest: D is not interested in this idea. He’s not a personal finance blogger, he doesn’t care how much money we’d save by going down to one car. All he sees is how inconvenient is would be – and has always been – sharing one car. We make decent salaries and could buy a new car in cash, so in his mind, there is no good reason to have only one car.
My inner cheapass is quieted only because I know that when we move in a few months/a year, my commute will no longer be 2 miles and then we WILL need a car. It would probably be easier to spread out these larger costs so we’re not simultaneously wrestling with buying a car and making a down payment on a house. Which leads us to our other choices…
2. Buy a used car.
I’m afraid that this post is going to make D sound like a wanton spendthrift, but he isn’t. I tracked my spending obsessively for 4 years when we lived in California and saved almost $40,000. D didn’t track anything for those 4 years, and he also ended up with $40,000. I’m into spending on lots of little things with a complete inability to spend on large purchases. D doesn’t spend much money day to day, but he is willing to splurge hard on something he likes.
That entire paragraph is leading up to this confession: we’re getting an SUV. A small one, but still.
I railed against this choice for days. How it’s socially irresponsible to get anything but a Smart Car. I offered to take a scooter on the highway every day. I pulled out EPA Fuel Economies for dozens of vehicles. I even started throwing hybrids into the mix (then quickly retracted that since the cost of the car is also a huge factor)!
It was no use. D wants the cargo space, the leg room (he’s 6’1″), and he’s not willing to give up on that. Even hatchback sedans couldn’t change his mind (which, you know, good call. Because they are ugly.).
Here’s the thing about late model used SUVs. They aren’t that cheap! We searched for a little while on CarMax, but there was nothing that met out requirements for space, attractiveness, MPG, and cost. And that’s when we decided that we might want to make the worst PF decision of our lives (dun dun dunnnnnn!)…
3. Buy a new car.
I bought my car, a 2006 Toyota Corolla, new. I was right out of school, had just moved to LA, and that was what I thought you were supposed to do. I didn’t (don’t) know anything about cars, so buying new just seemed safer than buying used. I got an OK price but terrible financing. Still, that car probably ended up making me money over the years. I was so bereft over the crappy interest rate on the loan that I started looking on the internet for financial advice on getting ridof debt. I discovered MSN Money, The Simple Dollar, and the world of blogging. A monster was born! Despite being the worst blogger ever, I have done well financially.
We’ve test driven a few cars recently, and can I just say that new cars are NICE these days? My car is 7 years old and I always thought it was a big deal that it had a 6 CD changer and nice speakers. The cars we’ve been testing have iPod hookups and touchscreens and even refrigerated glove boxes.
Yes, they probably had us test drive those types of cars so they could sucker us into the upgraded packages. IT WORKED.
Even though I still yell at D about how much cheaper a used car would be, no matter how ugly he thinks it is, I secretly want all of the nice new car stuff. And of course, now I’m ashamed because I used to think I was above all that, but instead I’m just as shallow as all the normal people. My financial asceticism does not extend to Bluetooth, apparently.
If it’s not totally obvious by this point, we are seriously considering going new. We have the cash to pay for it (although I may still go for financing if I can get one of those sweet 0% loans), and my hope is that we will be able to keep it for years and years, or at least until society starts breaking down because there’s no more oil left.
So! My hope when I put this out into the intertubes was to get some others’ inputs/experiences. Did you buy a new or used car? How did you decide? How did you haggle? And if the loan interest rate is 0.9% and my savings earn 0.84%, does it make sense to pay cash?