topic Re: Should we buy a new car? in Auto Loans

Should we buy a new car?

Anonymous — Mon, 17 Jan 2011 17:59:04 GMT

Our question is:

My wife drives a 2008 Ford Fusion SEL. According to Edmunds, the TMV Private party is $12,788, and the trade-in is $11,305. We owe approximately $7,000 on the car.. so we are about $4,000 - $5,000 in a positive situation.

We have a 4 month old daughter now and compared to my Honda Accord, we have found she has very little space in her car (car seat barely fits, etc). Although we don't need a new car currently, she has been pondering the idea of trading hers in to get an SUV, or something a little larger to make it easier for a child, and for our next child (as there will be more soon).

The interest rate on her current loan is 4%, and has 21 payments remaining at $345/month.

Is it worth the while for us to look at replacing the car now (especially considering most interest rates are 0 or 1%, or just payout the loan and look at the end. I

Re: Should we buy a new car?

Anonymous — Mon, 17 Jan 2011 18:24:41 GMT

Your not upside down and have positive equity in the car , I don't see a problem with trading it in on something different.

Re: Should we buy a new car?

Anonymous — Tue, 18 Jan 2011 03:12:52 GMT

No I do not think you should. Unless you are financially well off that is.

If you ever follow the guys who write Freakenomics/Superfreakenomics they did a study that the child car seat "industry in the United States is actually a scam, where except for the at certain ages there is really no difference in death/injury rates between car seats and seat belts.

Yet people have to buy entire vehicles and upgrade vehicles as their family grows. I think Car seats have kept the SUV industry alive in the economic down turn.

The facts are if your wife is simply "inconvenienced" I think she should keep the car, the payment, the gas mileage and costs of ownership is still lower then a new SUV will bring.

At some point you daughter will grow into more convenient seats.

The huge issue I have is lets say you guys upgrade in the next few months, and then your wife gets with child again...and its twins. the car you just moved to will be too small. Heck even if it is not twins the car you upgrade to may not be able to seat both seats you will have to have- and now you are back to trading out and trading into another vehicle.

If the Fusion fits, keep it. Unless her tubes are tied.

Re: Should we buy a new car?

Tazman81 — Tue, 18 Jan 2011 18:09:15 GMT

IMO: No, you should not buy a new car. Use that extra money (instead of subsidized student loans) to pay off your credit cards. You said your vehicle is big enough for the carseat. If that is the case, your wife can use your car while the child is with her and vice versa.

Re: Should we buy a new car?

andre181 — Wed, 19 Jan 2011 08:57:04 GMT

Why don't you drive the Fusion and let the wife drive the Accord?

You also have to consider the price of gas. Gas is supposed to get to $4/gal by Spring time, and I believe it. IDK how much gas is where you are but where I live its $3.29.

I feel sorry for anybody who own an SUV with prices like that...

But seriously, if you can afford it, go for it. But consider all your options first.

Re: Should we buy a new car?

Anonymous — Wed, 19 Jan 2011 15:08:18 GMT

My husband and I were in a similar situation. Personally, we ended up swapping our cars between one another a lot to accomodate our son. I will say as a parent, having that extra space is tremendously nice though... we bought a new minivan that gets the same gas mileage as our old sedan, has a lower payment over 5 years (same term as our previous car), and honestly it just makes life easier. It is so much easier getting kids settled in in a larger car, and I must add the added storage space is a huge plus. Not to mention, the tvs built into the roof are tremendously helpful for kids on trips.

In my opinion, I don't see any reason why you couldn't purchase a new car. It sounds like you are in a positive equity situation which will give you a nice down payment, and her car payment is rather high for that car.

Take care!

Re: Should we buy a new car?

Anonymous — Wed, 19 Jan 2011 18:09:43 GMT

@Anonymous wrote:
My husband and I were in a similar situation. Personally, we ended up swapping our cars between one another a lot to accomodate our son. I will say as a parent, having that extra space is tremendously nice though... we bought a new minivan that gets the same gas mileage as our old sedan, has a lower payment over 5 years (same term as our previous car), and honestly it just makes life easier. It is so much easier getting kids settled in in a larger car, and I must add the added storage space is a huge plus. Not to mention, the tvs built into the roof are tremendously helpful for kids on trips.

In my opinion, I don't see any reason why you couldn't purchase a new car. It sounds like you are in a positive equity situation which will give you a nice down payment, and her car payment is rather high for that car.

Take care!

Just positive equity is not the only factor in the decision. i understand what you are saying, I just do hope the OP weighs all the outcomes.

Re: Should we buy a new car?

laz98 — Thu, 20 Jan 2011 02:38:18 GMT

@andre181 wrote:
You also have to consider the price of gas. Gas is supposed to get to $4/gal by Spring time, and I believe it. IDK how much gas is where you are but where I live its $3.29. I feel sorry for anybody who own an SUV with prices like that...

hey, we have an SUV but we also do not live in $4/gal country