My .02
Keep the current car as your "beater" car. Drop all the insurance on it but liabilty.
Buy a CPO used car in only your wife's name, do some analysis and see if you can tweak her score a bit, but likely she can get close to tier 1 rates. Drive a hard bargain by reading the stickies on the board. If you don't walk out at least once during the negotiation, you haven't done it right. Have your financing lined up, but don't tell the dealer until after you have negotiated the best price, let him think you are going to let him make money on the financing. Make sure whatever pre-approved rate is close to what everyone else on the board is getting. Don't get talked into doing it jointly by anyone. Once you are ready to do the deal, put down 4K of your 5K. The other 1K goes in the Auto reserve Savings Account at your local Credit Union. This is your auto emergency fund. Even though it is a CPO something might go wrong. Each month something doesn't go wrong, add $50 to the reserve. The beater is your backup car for emergencies and breakdowns.
WHen it comes to picking the car, use the net's available resources to make an informed decision about reliability, insurance costs etc.
@Anonymous wrote:
So ... my wife and I have a car that's on it's last legs and are trying to make the right decision on how to replace it. We've got about $5k in cash to spend and were planning to buy a used car in decent shape but I'm having seconds thoughts as I do some travel for work and want something that's going to be really dependable. We have a decent combined income, but I'm still recovering from defaulted students, and the loan provider for the ones I've already rehabilitated can't seem to get the rehabilitation updated correctly to the credit bureaus, which is an extra hit on my score.
Here's the data:
Combined gross income: $115k
My FICO score: 580
WIfe's FICO score: 670
I guess there are three options: buy another cheaper car with $5k cash, use the $5k cash as a loan downpayment for a better used card (maybe in the $10k-$15k range?), or use the cash as a downpayment on a new car.
I'm kinda stumped here and have historically made terrible car buying decisions, so any help or direction would be fantastic and much apprecated.
