Sunday, August 1, 2010

Is it too early to be thinking about this?

Look, I know I am no where close to being debt free.  I am shooting for 36 months.  So I know that I am just on the third or fourth brick on The Yellow Brick Road.

But my car.....

My car is paid off, and we plan on running it into the ground.  Please believe me, I have absolutely no plan to purchase a car until this one is held together by duct tape.  But at 10 years old, I also know that it is possible that one large repair might sway us towards thinking more seriously about it.

The plan has been to pay off G-man's car (December 2011, or maybe January 2012) and then consider what to do about my car.  This plan has been in place since we purchased his car in December 2006.  We said as long as my car can outlive his loan, we will be a-ok.

Back then, we were still living on credit.  This was before our babies died and before the housing bubble.  Before 2008 when gas prices were outrageous.  Before we were committed to live debt free.

So, we are less than 18 months away from his car being paid off.  And my thoughts are moving towards what to do at that point.  More we roll that money into our debt snowball, or do we keep socking it away towards a down payment (or if we were really really lucky, to actually BUY) on another vehicle?

Realistically, the car we will purchase will be 2-3 years old, so assuming that this purchase is in 2012, my new used car will be a 2009 or 2010 model.  In otherwords, it is a new car now.  I have been looking at 2009/2010 models on line just to get a feel for them.  I would like to have already picked out a car by the time my car dies, so I already know what I want and I don't have to waste time deciding.

I would really love a Hybrid.  Right now, I am leaning toward a Mazda Tribute if I could even find one.  We haven't had much luck with American cars, and will probably go with a Foreign one.  Maybe Nissan.  I am not really wedded to one thing or another.

It is fun to look.  But if I could find a car I like, and track it, then I will have a better idea what I can expect to pay when the time comes.  Right?  Maybe?

Thoughts?  Especially from you car people, and you know who you are!!!!


  1. On the foreign car front, I would just say to consider the cost to repair the vehicle. For instance, my coworker has a Volvo. Very reliable vehicle. She loves it. Until her friend backed into it and she needed to replace the wiper on her headlight. (I still think it's hilarious that it has headlight wipers but anyway...) The wiper cost $700!!! For a wiper! An unnecessary wiper! However, my mom had a great experience with a Nissan Altima. (Actually saved her life!)

    That being said, I think it's very smart to have a plan in place for when your car does bite the dust. You don't want to be in that kind of situation, desperate to find a new vehicle and get sucked into a bad deal because you were under time constraints.

    Are you planning to buy used? Because that would save a lot of money, but it would also mean you can't prepare AS MUCH. You never know what will be on the used car market when your car is gone.

    Being out of debt is uber important, but you won't get out of debt any faster if you take on a car loan in the process. So I think you should determine how much money you'll be willing to spend on your next vehicle. Try as best as you can to determine how many months your vehicle has left on it. Then put that much money away every month. (Total willing to spend divided by number of months left before your car dies = how much to save each month) You might get lucky and have enough left over that you could still apply some of it to your debt.

    And whatever you do, don't fall in love with a vehicle so much now that you consider letting your car go before you need to! Good luck! :)

  2. @Red - We currently have an American car (each of us) and it could just be the brand, but we have had nothing but problems. We don't plan on getting a high end foreign car, so I am anticipating that repairs will be reasonable.

    Used car...definitely.

    I would love to avoid a car loan, but at this point, I don't see that as an option. We can't afford to save for another car right now, which is why I am debating what to do with the $358 a month we are paying on the car loan now.

    Once we don't have a car loan, that is a hefty chunk of change to roll into getting out of debt. In one year, that is almost $4500.

    I am not a car person....I run them into the ground and that is that. No way I would fall in love with a car. Never have. My current car will be just about dead when I get a new one.

    With any luck, my car will make it 4 more years....which will mean we will be debt free, and have saved up for the car!!

  3. Im weary of hybrids.. i heard After 5-7 years they require new batteries which can be over $2000

  4. @Kasey...hmm, I hadn't heard that. Good point....worth a further examination.

    Any thoughts on the saving for a car, vs rolling it into the snowball?

  5. My van is paid off too and I plan to drive it until the wheels fall off...hubs car should be paid off in January...I want a new one so bad, but trying to stick with the plan of wheels falling off first. LOL
    Debt snowball for sure.

  6. Actually, this is a current discussion with us right now. Hubs' car is slowly falling apart: we just replaced his starter. It's still a good car (Toyota) but it's 11 years old with 140,000 miles. He's also eyeing current models, the idea being that in a couple years we'll get one 3-4 years old.

    So. How to pay for it? Ideally, for us it will come from our emergency fund, which we will bulk up between now and then. Then we will re-bulk the fund. I don't think we will do a separate car fund. Of course, this emergency fund will be more than the $1000 while we were snowballing our debt!

    It's interesting. Right now our snowball is on hold b/c our house is on the market, and every leftover penny each month is just going into a regular savings account. It's so nice seeing that balance build! We have no idea how much we may need of it at closing... But it's hard for me not to plan different scenarios in my mind of what we'll do with that money if we end up not needing it for the house! Of course, it should go into long-term savings...

    I'm rambling, but I guess my answer for you w/b to set money aside, but plan on spending less than $5k when it comes time to buy another car.

  7. I know that paying off the debt snowball is a great idea, because you'll be getting rid of all that interest, etc.

    On the other hand, if you don't have money saved for a car, then buying one will put you into more debt. So it is a difficult decision, isn't it?

    Knowing us, we would just run the car into the ground and hope that it last for 10-12 years! Sorry I'm not any help!

  8. My opinion... snowball - that will get you somewhere so fast - and then if something happens & you have to get a car & take on a loan, then you will have $ in the budget to pay for it (but you just may be debt free at that point!)

  9. My car is a 2000 with 140k miles. Figure an average of 13k per year, so if it lasts until we are debt free, it will be about 13 yrs old with almost 180k. Is that realistic????

    Right now I am leaning towards snowball. But in 18 months when G-man's car is paid off, I might feel differently.


  10. This is all hypothetical as you currently have functional cars.

    Shut up and pay off debt.


    the Dad,
    Climbing Out

  11. Debt snowball.. that is my plan. Once the credit cards are paid off, I will attack the car loan.

  12. There is much to be said for a reliable used car. I think I'd sock half of the extra payment into my emergency fund and build that up towards the down payment for your next new-to-you car, and add half of it to your debt snowball. I lurrve Dave Ramsey but this all or nothing stuff doesn't work for me and my high-anxiety self. That way you smash interest and you hedge against your car giving up the ghost prematurely at the same time. My two cents. :-)

    For what it is worth, I have a used Honda Civic that has been wonderful. I sing the praises of used Hondas. Go Honda go!