So mad right now!

[mateosbaby]

Our 2005 Dodge Grand Caravan is making funny noises. We just bought it a few years ago, used, and just passed the 100,000 mile mark. I suspect the tranny, as that is usually what goes bad around this time, according to several websites (in addition to TONS of other problems with this van - don't buy one!!!). The bad thing is, though, you can see in my siggie how much I owe on it. Even if I sell it 3rd party, it's only worth $5700. Trading it in it's only worth $3500. If I fix the tranny and whatever else is wrong with it, I only gain another $600 or so for it! We are in the process of buying a house, so we absolutely cannot get another car right now. Spending the $2000 or so to get the tranny fixed means digging into our down payment fund (we don't have this much stored up in the car repair fund, even though I do put some money into it every month). What to do??? Obviously we also don't have money to buy a car outright, plus finish making the payments on this one. I am SOOO mad right now! Please give me some advice, from someone who's not mad and not thinking clearly.

[rudypoo98]

My son-in-law is a mechanic if you can tell me what the noises sound like maybe he can help.He had a Dodge van not long ago that the transmission went out of.

[Greebo]

You're in the DR forum, so here's what Dave would tell you to do.

Dave would tell you it's not time to buy a house right now - because you're in Baby Step 2. You're not in the right place financially, to add new house debt. That's BS 3B - after the fully funded EF is in place.

He would, therefore, tell you to use the house money to fix the car, then pay off debt with it.

[mateosbaby]

Rudy, the noises are kind of a grinding noise while idling, and it gets really bad when in reverse, especially when having to go uphill. Sometimes it's hard to get it into gear, too, kind of sticks in Park and you have to "force" it to move.

Greebo, I know what Dave would say, but renting in this case just isn't going to work. It is actually cheaper for us to buy a house and pay those payments rather than renting with all the people and pets we have in our family (between rent for a 3-bed and all the extra rent we'd have to cover the 2 cats, who have claws). We cannot keep living in my grandparents' basement, it's simply out of the question. That's why we decided to buy instead. (See my previous thread on this topic.) In this economy, when house prices are SO cheap, sometimes it really is more economic to buy and pay smaller payments than renting for more money each month. By my calculations, I'll have about $500 a month to throw at debt once we are in our house, whereas renting I would have only had about $200-$300 a month extra.

Other than that, what would you (or anyone) recommend? BTW, we did check with the Kelley Blue Book before buying this van to make sure we weren't overpaying.

[Greebo]

The car is worth more than the repairs, so based on that, I'd fix the car.

Out of curiosity - what would a 3br rental plus pets cost vs. the kind of 3br house you're interested in?

[mateosbaby]

We offered $122,000 for the house, so a payment of $973 a month. Rentals for a 3bed apt start at mid$900s, before adding on pets. This way we get a yard, a potential 4th bedroom (add wood, drywall, and door, and voila), and our own space. Plus no storage fees anywhere for all the stuff for the house (lawnmower, etc). Plus our own laundry facilities, which is really nice for such a big family. We really feel this is definitely the best thing for us. Even taking into account maintenance and heat, etc, for what we're getting vs. what we'd have at an apt, we feel this is the better value in the long-run.

[mateosbaby]

Oh, and Greebo, I understand your point about the repair cost vs. the car's value. So if a repair (or multiple repairs at once) end up costing more than the value itself, THEN you'd sell and replace the car?

[Greebo]

We offered $122,000 for the house, so a payment of $973 a month. Rentals for a 3bed apt start at mid$900s, before adding on pets. This way we get a yard, a potential 4th bedroom (add wood, drywall, and door, and voila), and our own space. Plus no storage fees anywhere for all the stuff for the house (lawnmower, etc). Plus our own laundry facilities, which is really nice for such a big family. We really feel this is definitely the best thing for us. Even taking into account maintenance and heat, etc, for what we're getting vs. what we'd have at an apt, we feel this is the better value in the long-run.

So that's a 15 year mortgage right?
122k at 15 years at 4.5% (going rate) is $933.29

That's principle and interest only.

Then there's taxes. What are your state/county/city property tax rates? Around here on a 122k property that's $1,324 a year give or take.
Then there's insurance - which for your property would be 400-500 a year I think.
Then there's maintenance and repair, which a good # to use is 5% of the value of the property per year. That's $6,100 a year. That's on a NEW house. On older homes you can go as high as 20%
Water is usually covered on a rental - what's water cost in your area?
What other utilities aren't covered when you own a home vs. rent?
What will lawn care cost?

On the numbers I could come up with alone, your monthly cost has gone up now by $600 a month.

You are better off renting in baby step 2.

Period.

[Greebo]

Oh, and Greebo, I understand your point about the repair cost vs. the car's value. So if a repair (or multiple repairs at once) end up costing more than the value itself, THEN you'd sell and replace the car?

If the CRITICAL repairs cost more than the value of the car, I'd start thinking about it, yeah.

If the car is worth 7k and it needs 3k, I'll fix the car.

I fell into that trap once - my wonderful old Lexus LS400 that I *LOVED* had electrical problems. It was worth 6-7k easily. I got a 3k repair bill and freaked. Traded it in for 5k, bought a 40k Highlander as stupid tax.

The Highlander? I'll own that till it dies. I paid the stupid tax on it - I am gonna keep it going as long as I can.

[frugalfriend]

My last car was a Dodge Grand Caravan. Constantly had problems. So did a friend of ours who had the same car, in fact everyone I've talked to who has had a Caravan said the same thing. From my experience with our Caravan I would have to say not to dump money into this car. So sorry for the situation you are in!

[mateosbaby]

So that's a 15 year mortgage right?
122k at 15 years at 4.5% (going rate) is $933.29

That's principle and interest only.

Then there's taxes. What are your state/county/city property tax rates? Around here on a 122k property that's $1,324 a year give or take.
Then there's insurance - which for your property would be 400-500 a year I think.
Then there's maintenance and repair, which a good # to use is 5% of the value of the property per year. That's $6,100 a year. That's on a NEW house. On older homes you can go as high as 20%
Water is usually covered on a rental - what's water cost in your area?
What other utilities aren't covered when you own a home vs. rent?
What will lawn care cost?

On the numbers I could come up with alone, your monthly cost has gone up now by $600 a month.

You are better off renting in baby step 2.

Period.

30 year mortgage (don't throw tomatoes at me!!!). There's no way we can pay a 15-year mortgage unless we're in a piece of crap house. We're in the Twin Cities, and house prices are still high (in our opinion) compared to incomes. If we wanted a 15-year mortgage, we'd be in the middle of downtown Minneapolis in a REALLY bad neighborhood. So if you want a safe neighborhood, outside the Cities (where my husband works), you pretty much have to do it this way or you're in a dilapidated old house that needs way more repairs than you should sink into it. A 30-year is the way to go for now, so that you can concentrate on paying down the other debt. Our long-term plan is to get completely out of there in 5-7 years or so. We plan to pay down our debt ASAP, then save up for wooded land up north, then build alternative housing (shipping containers, hopefully) as we can afford it. Then we'll move up there permanently. So we do have a plan, and we have the motivation to make it happen.

Our effective APR (not the "advertised" one, which is 4.875%) is 5.621%. Again, we OFFERED $122,000, but we are putting down 3.5% (FHA loan). According to the papers from the loan officer:

Sales price: $122,000
Down payment (3.5%): $4,270
Base Mortgage Amount: $117,730
Mortgage Insurance Financed: $2,648 (need to look into this - maybe we can pay that outright right away)
Total loan amount: $120,378

Monthly payment:

P&I: $637.05
Hazard Ins.: $70
Property taxes: $212.50
Mortgage Insurance: $53.59
Grand total each month: $973.14

Of course, there's heat/water/elec/etc on top of that. Lawn care is easy. A little gas to get us through the year, little bit of oil, and we mow. If we really wanted to, we could get an old-fashioned pushmower, but let's not get carried away. It's only .24 acres, I think we can handle it. Hee, hee! The house was built in 1986, so the heat should be WAY better than our last house. We paid over $400/month usually in the winter at our last house, built in 1924, and in rough shape. This house, while twice the size, is also much more efficient, and a gas fireplace downstairs should also help a lot. We are practicing for a self-sufficient lifestyle, so we will cut way back on water/elec./gas usage, too.

So if I average out heat/water/trash, it's maybe $200/month to cover year-round. That's $1173. Pretty close to what it would be renting a 3-bedroom apt. Sure, we have to take care of our own lawn, and we have to pay water for the laundry (but we would anyway at a laundromat or down the hall with quarters). But in the end, I really think this is way more worth it. Even mileage/gas to get hubby to work and back is the same (there was only one apt complex that even seemed to want to allow cats with claws).

Does this make more sense?

[mateosbaby]

My last car was a Dodge Grand Caravan. Constantly had problems. So did a friend of ours who had the same car, in fact everyone I've talked to who has had a Caravan said the same thing. From my experience with our Caravan I would have to say not to dump money into this car. So sorry for the situation you are in!

Yet another person to add to the list of dissatisfied Caravan owners. *cry* SOO wish there had been one other van somewhere in Milwaukee that night!!!

[rudypoo98]

My son-in -law asked how far do live from here because it wouldn't cost much for him to rebuild it.He said if you know someone that is mechanically inclined or your husband is those transmissions aren't hard to rebuild.Get a 2005 Dodge Caravan Chiltons book and rebuld it.He said if it's still making it around now these transmissions are bad about clogging up.So change the transmission fluid and filter get a can of Seafoam transmission conditioner to put in it.You need new gaskets and gasket sealer when you put the pan back on.He said try this first because it might solve it.If not rebuild it like I put on here first.He's on the phone telling me all this right now.He said if you want to know more about it just ask.He said if it was him fixing it for you he would charge $650- $700 .

[mateosbaby]

My son-in -law asked how far do live from here because it wouldn't cost much for him to rebuild it.He said if you know someone that is mechanically inclined or your husband is those transmissions aren't hard to rebuild.Get a 2005 Dodge Caravan Chiltons book and rebuld it.He said if it's still making it around now these transmissions are bad about clogging up.So change the transmission fluid and filter get a can of Seafoam transmission conditioner to put in it.You need new gaskets and gasket sealer when you put the pan back on.He said try this first because it might solve it.If not rebuild it like I put on here first.He's on the phone telling me all this right now.He said if you want to know more about it just ask.He said if it was him fixing it for you he would charge $650- $700 .

Hee, hee, I'm in MN. Quite the distance.... I've been asking around on a few forums and car diagnostic sites to see what this noise is. Waiting to hear back on those. Thanks for all the research. Saves me some time in case it is the tranny. I hate when those go out... Grrrr.... My dh is also going to look around at garages here that will diagnose for free. We are new here (although my family is all here), so all the places are new to us.

[a.nonymous]

I'm absolutely with Greebo on the house topic.

You really, really should not buy. I'm fairly certain we won't be able to change your minds, because it seems all but made up.
But renting would be the better way to go. Especially compared to a 30 year mortgage. If "there's no way" you can pay a 15 year fixed mortgage, then there's no way you're in the right position to own a house.

As for the car, I'd go a different route. Sell the car for those $5700 and get a beater for less than that. I'd rather have a beater for $2k and a $3400 loan to get rid of than sinking extra funds into a troublesome car every month. That'd improve my monthly cashflow, as well as having less money tied up in something that goes down in value everytime you turn the key.