Buy Car with Cash or Take up Payments?

[BamaClark]

Hello everyone. I have posted here before and laid out my financial situation in another thread. I received awesome advice and now I’m looking for more. Since posting last, I’ve had a new twist to our debt situation. Here goes…

We (my wife and I) had two car payments that were basically sucking us dry every month. Three weeks ago, we were blessed. My wife was hit by another car and her car was totaled. Fortunately everyone was ok. The insurance is paying the vehicle off and we’ll have $3,200 leftover from the insurance payment. On top of that, I can bring another $1,500 in cash to the table to buy something else totaling $4,800 to get a used car. I currently own a Honda Accord, making payments, very reliable car. I drive 50 miles to work, one way. I’m giving my wife the Honda Accord because she totes the kids around to school, her work etc, and the car is safe. I’d rather put her and the children in it because it’s safe and reliable. So I have to buy something else. Remember, I drive 100 miles per day round trip – 4 days a week, so mileage adds up fast, and so does the gas bill. I DO NOT WANT NEW PAYMENTS. I’ve looked hard and all I can find are used Hondas, Toyotas, Nissan’s etc for roughly $10k . These are very reliable cars, with on avg 100-120k miles on them. I really really don’t want to have to finance anything. Should I go ahead and bite the bullet, finance something, OR there are other cars for ~$5000 that are less reliable but will be paid for. Of course, I’d have to do more maintenance on them. For instance there is a BMW with 120k miles for $4300. I don’t know if I should go ahead and buy it, or finance something else.

Thanks for any and all advice!

[dancemommy]

We were in your shoes recently trying to find a car for under $5000. We couldn't find a thing that I didn't feel like we would be making repairs to soon. I didn't want to add unexpected car repairs to our budget. So then we started looking at $10,000 cars knowing that we would have to finance half of it. We ended up actually leasing a car for my husband- he drives fewer miles than I do. Got a new car for under $200 a month so under $2400 a year with no unexpected repair costs. We've never leased before so I was hesitant as I know so many people are so anti-leasing, but then I really started talking to our friends and most of them have been leasing for many years and heard no negatives. For us it will mean less money out of pocket- $7200 for 3 years including all taxes and no repairs. In 3 years we will reassess. But when I think about it had we spend $7200 for a car it most likely wouldn't last much more than 3 years or would require way more than that in repairs. AND if we had to finance some if it, we would have been paying interest as well upping that cost. Best thing is it has such great gas mileage- 40 mpg!! In your situation you drive to many miles, but it is a thought for your wife. Good luck!

[HappyMama]

I would look into used Mercedes , or Volvo's they are some of the safest cars on the road, reliable, and if maintained you will be set. Look for both under the year 2004 trust me. I would only buy if there is maintenance records or you can see maintenance has been done.

There is nothing more expensive that a used Mercedes that has not been maintained with regular service.

Mercedes 94 are the most reliable, great body frame, classics, leather and if maintained well can go over 300,000 miles. I should know I have a couple of paid off Mercedes. Just make sure the harness was redone ( well known in that age to have a "green" disposable harness....sigh don't ask)

I have many friends with leases, car payments etc who are jealous of my Mercedes and Volvo that I just got. They don't look their age, have been maintained , are classics and drive incredible.

I just picked up a Volvo with a turbo , voted one of the safest on the road. Was 33,000 new. Now this is an oldie, but looks brand new interior, leather, fantastic exterior but needed a new hood. Already replaced hood, fan relay, timing belt ( should always do this at 70,000 miles) , water pump, serpentine belt , and PCV flame kit, oil change, fluid check, cam shaft seal ( for small leak) etc. Some needed done, some just preventive maintenance. I bought the parts for a fantastic price. We did this ourselves saved thousands . She looks brand new, drives smooth, and we will probably get 200,00 commuter miles out of her. I won't even say how cheap I got her , as the owner wanted it gone , needed a new hood and smoked from the dipstick . Which in researching is common for that car and needed a new PVC flame kit, it was regularly 150.00 for the kit I got on sale for 85.00 free shipping. Like my friend says she looks brand new. She drives incredible and certain family members love the turbo ...LOL that can go up to 150 but no we won't drive it to that !

Mercedes diesels are great highway commuters, great on mileage, and have been know to go over 400,000 miles if maintained.

Hope this helps. Did I say I love no car payments, classy cars, with leather, power everything, smooth rides and did I say no payments ...LOL I would never trade my Mercedes for a BMW ( sorry BMW lovers, I have heard you either love Mercedes or BMW...well mine have never let me down. But we have been willing to research , join boards for help, get the parts for a good price and do the work ourselves.

Hope this helps sorry for the book, and if no help disregard.

Best wishes in your decision.

[Pianolady]

I don't think lease will work for you either unless it's for your wife....but you still have payments there. So, you might as well finance something. I managed to get an '03 Nissan Frontier truck for about $10k with 47,000 miles on it just a few weeks ago. It's the 4cyl, I averaged 23mpg on my first tank (city driving), I think they get 28mpg highway. With your kind of cash down payment, you'd end up with a very, very low car payment, probably lower than leasing. A Ranger would probably be in the same ballpark (no room for passengers though).

Chevy Cobalts aren't a great car, but they are cheap and get very good gas mileage. I was getting about 30mpg combined on the one I had (4cyl). You should be able to find a lower mileage one for about $10k.

Oh! Dh found a '05 Dodge Magnum for $10k, 70k miles. I guess we only buy cars that cost $10k, lol. That's pretty much our limit. He loves that Magnum for his commute, and you can fit lots of people/things in it. It gets pretty good gas mileage for it's size, and is peppy (he has the 3.5 V6).

[Contrary Housewife]

The Honda Accord is an excellent car, both for its safety rating and its gas mileage. You'll be hard pressed to find as good a car with that mileage anywhere.

If you can get a 2nd high MPG beater for 10k, I say do it. Put your $4800 down and finance the rest -- and then pay off that loan ASAP.

[HappyMama]

By the way seeing gas mileage I get 30 mpg highway on Mercedes older, 26-28 town.

Diesel Mercedes older about 33 mpg

Won't go into the SUV very good for a SUV though but know you aren't in market

Volvo new to me but seems to be getting 31 mpg highway and 28 city so far, with new tune up.

And these are full size luxury cars, safe, reliable and rated also some of the safest.

Up to you, I just like looking at safety, mileage, mpg and luxury with no car payments. I won't sell my soul for a good ride.

[mh3rdwheel]

BamaClark,

Here is a really good suggestion, if you get really friendly with a used car dealer, ask them if they could take you to the car auction and choose a car or truck you choose the vehicle then (first decide on a price that you are willing to pay for vehicle) give the dealer $200 to $300 for taking you, when you get back to the lot with a vehicle you pay for tax, title, etc and pay for the cost of the vehicle for a lot cheaper then going and buying one on a lot.

A lot of banks repossess vehicles and they are sold at auction cheap, or lease vehicle, you can get vehicles at auto auctions for less than half of what you would pay at the auction.

I used to be a used car person, I have been to a lot of auto auctions, I know what the charge and what you would pay at the lot.

You can spend $4,800 and get a decent vehicle. Worth checking into.

[mh3rdwheel]

BamaClark,

Here is a really good suggestion, if you get really friendly with a used car dealer, ask them if they could take you to the car auction and choose a car or truck you choose the vehicle then (first decide on a price that you are willing to pay for vehicle) give the dealer $200 to $300 for taking you, when you get back to the lot with a vehicle you pay for tax, title, etc and pay for the cost of the vehicle for a lot cheaper then going and buying one on a lot.

A lot of banks repossess vehicles and they are sold at auction cheap, or lease vehicle, you can get vehicles at auto auctions for less than half of what you would pay at the auction.

I used to be a used car person, I have been to a lot of auto auctions, I know what the charge and what you would pay at the lot.

You can spend $4,800 and get a decent vehicle. Worth checking into.

I meant to say that you can get the car for less than what you would pay at a car lot. I was a used car dealer for 3 years.

[mndtrp]

100,000 miles means next to nothing when it comes to Toyotas and Hondas. My coworker, who is very hard on his camry, has over 230,000 miles and no problems.

[Preston]

BamaClark,

Here is a really good suggestion, if you get really friendly with a used car dealer, ask them if they could take you to the car auction and choose a car or truck you choose the vehicle then (first decide on a price that you are willing to pay for vehicle) give the dealer $200 to $300 for taking you, when you get back to the lot with a vehicle you pay for tax, title, etc and pay for the cost of the vehicle for a lot cheaper then going and buying one on a lot.

A lot of banks repossess vehicles and they are sold at auction cheap, or lease vehicle, you can get vehicles at auto auctions for less than half of what you would pay at the auction.

I used to be a used car person, I have been to a lot of auto auctions, I know what the charge and what you would pay at the lot.

You can spend $4,800 and get a decent vehicle. Worth checking into.

I did this years back and it worked out wonderfully! I got a Ford Taurus that was around $7000 for $3000 and it lasted me to almost 200k miles before I sold it.

Just do your homework if you go this route.

[Sumacaroni]

We had an older Mazda 626 that we bought for $3000, I drove it 50 miles round-trip on my work commute for 2 years plus I had an opposite direction 50-mile round-trip commute to school twice a week. Many miles, 29mpg, was a good reliable little runner and we were able to sell it for $1800 after I got through school.

But! I wish we could have gotten an Accord! Love them, love their reliability. Before we decided on our van, we were looking at used Accords but just needed more seating. If you're vigilant looking around, I hope you can find another Accord

If you can't find anything for your cash, I second the idea of working with a salesperson to find the kind you want at auction, smaller lots were willing to look every week for us. And at the very least, I hope you only have to take a small loan to supplement your great downpayment!

[mh3rdwheel]

We had an older Mazda 626 that we bought for $3000, I drove it 50 miles round-trip on my work commute for 2 years plus I had an opposite direction 50-mile round-trip commute to school twice a week. Many miles, 29mpg, was a good reliable little runner and we were able to sell it for $1800 after I got through school.

But! I wish we could have gotten an Accord! Love them, love their reliability. Before we decided on our van, we were looking at used Accords but just needed more seating. If you're vigilant looking around, I hope you can find another Accord

If you can't find anything for your cash, I second the idea of working with a salesperson to find the kind you want at auction, smaller lots were willing to look every week for us. And at the very least, I hope you only have to take a small loan to supplement your great downpayment!

Sumacaroni I LOVE YOUR AVATAR, IT MADE ME AND DH LAUGH.

[SwirlyThing]

Look at buying used from private party. Have a mechanic check it out for you before you buy.

My last car I bought for $3500 (off of craigslist actually). It was a pontiac sunfire. Drove it for 80,000 miles and never had to do anything more than oil and breaks. Sold it recently for $2500, and it was still running fabulously... I just wanted somthing newer and had the cash to buy it.


DH drives a truck that he bought used for $4000. Has been driving it now for 6 years, and it has not needed anything other than routine maintenance. For 3 of those years, he drove 150 miles per day for work. The thing sill runs great.

Do not finance another car if you do not have to. Spend some time hunting for the right used car. You can put that couple hundred per month into an emergency fund, and you'll sleep better at night without the debt.