topic Re: Advice Needed: Lease/Finance New Car or Fix/Invest in Current Cars? in Auto Loans

Advice Needed: Lease/Finance New Car or Fix/Invest in Current Cars?

peter1974 — Sun, 25 Oct 2020 18:21:14 GMT

We are about to close on a house and one of the things we are considering after we close and are settled, is possibly buying or leasing a new car.

My wife and I both drive vehicles that are 15 years old. We haven't had a car payment for almost 4 years. No major repairs have been needed, just a few annoying things here and there but most I have been able to fix myself. However, it can become like whack-a-mole when you have two cars that old.

With that said, we don't "need" a new car yet, just a nice to have. I enjoy not having a car payment which is the main factor of me not getting a new one, so I'm split between just investing a little more money in fixing the cars up and making them last longer or trading one of them out. But I also feel like the vehicles can only last so long before the repairs become too numerous.

If it helps to know: my wife's car is the commuter/daily driver. I work at home, so I drive the larger "family" SUV.

Any thoughts?

Re: Advice Needed: Lease/Finance New Car or Fix/Invest in Current Cars?

Brian_Earl_Spilner — Sun, 25 Oct 2020 18:39:34 GMT

I enjoyed not having a car payment as well. It came to a head when I had a starting problem that would leave me stranded a couple of times a month. Nothing serious, but it became an annoyance. By the time I figured out the problem, I was over it and bought a new car. While I miss having the extra money, it was worth it to have a new car. Still have the truck and and it's fixed and runs, but I rarely drive it now, if ever.

Re: Advice Needed: Lease/Finance New Car or Fix/Invest in Current Cars?

Shooting-For-800 — Mon, 26 Oct 2020 11:59:18 GMT

I would drive them till they become unreliable.

Mileage matters too.

Sales Tax alone on a new car is as much as a major repair.

On the other hand, if you keep cars 15 years, it is easy to justify a new one.

Maybe buy your wife a new one and hold of on yours until hers is paid off.

I have the same debate myself.

We bought my wife a brand new car in because she drives a lot.

My SUV is reliable but 13 years old.

I just can’t handle spending $50k on a newer one or $70k on a brand new one.

GL!

Re: Advice Needed: Lease/Finance New Car or Fix/Invest in Current Cars?

ccquest — Mon, 26 Oct 2020 13:52:00 GMT

I would more or less split the difference so you have one newer and one older at any given time. Cycle through about every 5 years at most.

As for when to replace, I'd say if the repairs add up to more than 6-12 months worth of equivalent car payments then it's time to move on. Or if you're repeatedly getting stranded and can't figure out the issue. If neither of those happens, ride it til it dies.

Re: Advice Needed: Lease/Finance New Car or Fix/Invest in Current Cars?

peter1974 — Mon, 26 Oct 2020 14:46:40 GMT

@ccquest wrote:
I would more or less split the difference so you have one newer and one older at any given time. Cycle through about every 5 years at most.

As for when to replace, I'd say if the repairs add up to more than 6-12 months worth of equivalent car payments then it's time to move on. Or if you're repeatedly getting stranded and can't figure out the issue. If neither of those happens, ride it til it dies.

Thanks! To answer your prior question, they both have about 190K miles.

Only been "stranded" once in each vehicle and by stranded, I mean a temporary issue that I immediately knew and was able to get rolling again in about 30 minutes. So, technically they both have been fairly reliable.

At this point, I'm mainly just replacing worn parts due to age.

Re: Advice Needed: Lease/Finance New Car or Fix/Invest in Current Cars?

sxa001 — Mon, 26 Oct 2020 19:16:34 GMT

How many miles per year do you put on each? Having to replace two vehicles at once would be pretty rough. Certain vehicles can go 300k + if they are well maintained so maybe you could have longer on each car without huge expenses. I would keep driving them and maybe make a plan to replace the more heavier used vehicle. But in the end do what is right for you, if having a payment for 6-10 years (buying two new vehicles one after another and paying them off on 36-60 month loans) and then keeping them for another 15-20 years is an acceptable plan that seems pretty solid.

It is really tough because we end up spending so much per year for the luxury to have absolute freedom in mobility in so many different ways, but that is a topic for a different thread.

Re: Advice Needed: Lease/Finance New Car or Fix/Invest in Current Cars?

peter1974 — Tue, 27 Oct 2020 01:33:08 GMT

@sxa001 wrote:
How many miles per year do you put on each? Having to replace two vehicles at once would be pretty rough. Certain vehicles can go 300k + if they are well maintained so maybe you could have longer on each car without huge expenses. I would keep driving them and maybe make a plan to replace the more heavier used vehicle. But in the end do what is right for you, if having a payment for 6-10 years (buying two new vehicles one after another and paying them off on 36-60 month loans) and then keeping them for another 15-20 years is an acceptable plan that seems pretty solid.

It is really tough because we end up spending so much per year for the luxury to have absolute freedom in mobility in so many different ways, but that is a topic for a different thread.

We both put about 12K miles a year on our vehicles. Wife's miles are all commuter, mine are mostly long distance as we use my SUV to travel out of town.

Re: Advice Needed: Lease/Finance New Car or Fix/Invest in Current Cars?

peter1974 — Sun, 22 Nov 2020 04:00:29 GMT

Hello everyone. I have some updated info that may change your advice:

Turns out my wife's car will need some major repairs due to some leaks, and other issues....to the tune of $3.5K+.

The car is only worth $3K. It is a Lexus so it will last while if we repair it. But we have to make a decision soon.

Since we are closing on a house at the end of December, our options are limited to:

1) Repairing the car for $3.5K+ cash

2) Trading it in and paying cash for a reliable used car (financing a car is out of the question before we close), spending a total $7-$8K after trade.

Any thoughts?

Re: Advice Needed: Lease/Finance New Car or Fix/Invest in Current Cars?

Shooting-For-800 — Mon, 23 Nov 2020 12:25:11 GMT

If you like it, I would fix it.

The devil you know...

Worth a little more when selling...

5-7 normal car payments...

etc.

Re: Advice Needed: Lease/Finance New Car or Fix/Invest in Current Cars?

ccquest — Mon, 23 Nov 2020 13:06:56 GMT

Worth $3k non-running or after the $3.5k in repairs? If you plan on keeping it another 2+ years, I'd say it could be worth it as you won't have any payment and you also won't be out the full $7-8k to replace like you mentioned. Plus you mentioned financing could be an option after closing, so in a couple years you'd be way past that and probably in a different financial situation where you might be looking at a newer car.

Re: Advice Needed: Lease/Finance New Car or Fix/Invest in Current Cars?

peter1974 — Mon, 23 Nov 2020 14:25:39 GMT

@ccquest wrote:
Worth $3k non-running or after the $3.5k in repairs? If you plan on keeping it another 2+ years, I'd say it could be worth it as you won't have any payment and you also won't be out the full $7-8k to replace like you mentioned. Plus you mentioned financing could be an option after closing, so in a couple years you'd be way past that and probably in a different financial situation where you might be looking at a newer car.

That $3K in value would be as-is, running but without any repairs. Probably could add another $1.5K to the value after the repairs are done.