ktgrok Posted August 2, 2016 Share Posted August 2, 2016 So, I've talked about needing a new vehicle before. I drive a 2006 Dodge Caravan that has had multiple problems, we just put another $600 into it and still isn't right. It has I want to say 160,000 miles on it? Maybe more. I drive 30 minutes or more here and there (one way) almost daily, and an hour plus each way to my mom's a few times a month. In other words, we drive a lot. In crappy traffic. It has some areas that are going to start to rust (not rusted yet, but there is some minor corrosion) and now it is in the shop to have a dent repaired from the car accident I was in a week ago. I wouldn't care bout the dent, but the paint is gone there too, and I am assuming that will rust if left exposed? Anyway, insurance is to cover the repairs, but I got a call today that the repair is over $2K, so they need to do an estimate of the vehicle's worth tomorrow. They may decide it isn't worth fixing. Whatever they give me for the car, it won't be anywhere near enough to buy a newer, more reliable van. We have some money in savings, but really don't want to blow through that, and it's not enough to get a newer, lower milage van. (we have about 10K in savings). We don't qualify for a decent car loan via our bank because of DH's bad credit...debt to income ratio is bad due to student loans (which we will be repaying forever) and he has some old delinquencies/medical bills. We don't carry a bunch of credit card debt or anything like that. We don't have any car payments currently DH drives a beat up pick up that we paid cash for but once the new baby comes there will be NO way to fit all of us in there if/when my breaks down again. At this point, I'm considering taking money out of some investments we have, inheritance money that is in an Edward Jones portfolio. I hate to do that, but at the same time, it makes more sense to lose interest there than to pay high/outrageous interest on a whatever crappy car loan we could get. We are looking at vehicles that are around 15K, to get something low milage (under 50,000 miles) and a bit newer. We wouldn't touch the 401K accounts, or the kids college accounts, just the "extra" money that we have in there. Bad idea? Quote Link to comment Share on other sites More sharing options...
ErinE Posted August 2, 2016 Share Posted August 2, 2016 Before you pull money out of the account, check with the dealership for financing options. We were able to get 0% financing for a used car. If that isn't an option, then yes, I would use the investment money to buy a car. It sounds like a reliable car is necessary for your situation. Quote Link to comment Share on other sites More sharing options...
QueenCat Posted August 2, 2016 Share Posted August 2, 2016 Yes, I would use the inheritance money for a vehicle. Quote Link to comment Share on other sites More sharing options...
Anne Posted August 2, 2016 Share Posted August 2, 2016 Echoing the check out your financing options, but also, yes, I would use inheritance money to buy a reliable vehicle. Anne 1 Quote Link to comment Share on other sites More sharing options...
Epicurean Posted August 2, 2016 Share Posted August 2, 2016 Ask about how much you'll be taxed when you take the money out. I'm guessing your investment is subject to capital gains. You'll have to weigh the penalty for taking it out vs getting a loan. But really, my answer would be that you don't need a new car right this second--you can still drive it with the dent. So I'd drive it for another six or eight months and save up enough in that time not to have to damage my investments. 9 Quote Link to comment Share on other sites More sharing options...
EmilyGF Posted August 2, 2016 Share Posted August 2, 2016 FWIW, we bought our 2005 Ford Freestar with 60K miles for $6K. It has been a super reliable car so far... we've gotten 90K on it so far and are hoping for two more years. Does salt from the sea cause your car to rust in your state? I wouldn't worry about rust on a Dodge Caravan with 160K miles. It'll die before it rusts... and I doubt it is worth more than $2K, especially if it has rust damage. Emily 1 Quote Link to comment Share on other sites More sharing options...
ktgrok Posted August 2, 2016 Author Share Posted August 2, 2016 FWIW, we bought our 2005 Ford Freestar with 60K miles for $6K. It has been a super reliable car so far... we've gotten 90K on it so far and are hoping for two more years. Does salt from the sea cause your car to rust in your state? I wouldn't worry about rust on a Dodge Caravan with 160K miles. It'll die before it rusts... and I doubt it is worth more than $2K, especially if it has rust damage. Emily Prices seem to have jumped...we bought this vehicle with about 60K miles about 4 or 5 years ago, for 6K. Now something similar is twice that much. Quote Link to comment Share on other sites More sharing options...
Carol in Cal. Posted August 2, 2016 Share Posted August 2, 2016 Check with State Farm--they do loans on used cars. Pretty good terms, I'm told. 1 Quote Link to comment Share on other sites More sharing options...
Epicurean Posted August 2, 2016 Share Posted August 2, 2016 Oh, and you can get a loan against your life insurance, if you have it. They have super low rates. Quote Link to comment Share on other sites More sharing options...
Liz CA Posted August 2, 2016 Share Posted August 2, 2016 Have you tried a local credit union instead of a bank? Also, income/debt ratio is not necessarily the same as bad credit. If it's too much hassle though, I agree to to take it out of investments and pay cash. Quote Link to comment Share on other sites More sharing options...
ktgrok Posted August 2, 2016 Author Share Posted August 2, 2016 We did try our credit union. They denied us. The bad credit is multiple things, dating back a ways. Basically, I have good credit but almost no income, and he has income but bad credit. I'm sure we could GET a loan, from some buy here pay here kind of place, but the interest would be ridiculous. Saving for a few more months would mean we could get enough together to cover a car, but we'd have nothing left in savings at all, which seems like a bad idea. Especially since we are talking a used car, either way. We also have midwifery bills coming up, God willing. Still waiting to hear if my insurance will approve an out of network exception, if they don't it will be several thousand dollars. Quote Link to comment Share on other sites More sharing options...
Hilltopmom Posted August 2, 2016 Share Posted August 2, 2016 We just had this exact conversation last night. I think we are going to sell off some stocks to do it. Quote Link to comment Share on other sites More sharing options...
mommyoffive Posted August 2, 2016 Share Posted August 2, 2016 I asked some of these questions last time, and I forgot the answers. Do you have an e-fund? Do you have to pay capital gains on your investments? Do you have money month to month for a car payment? With all the debt you have would it be a better idea to pay off the debt? Is it at a high % rate? How much is the birth going to cost you? Will that be a monthly debt for you too? Are you on track for retirement? Quote Link to comment Share on other sites More sharing options...
SparklyUnicorn Posted August 2, 2016 Share Posted August 2, 2016 I think it's a worthwhile use of the money. Quote Link to comment Share on other sites More sharing options...
ktgrok Posted August 2, 2016 Author Share Posted August 2, 2016 I asked some of these questions last time, and I forgot the answers. Do you have an e-fund? Do you have to pay capital gains on your investments? Do you have money month to month for a car payment? With all the debt you have would it be a better idea to pay off the debt? Is it at a high % rate? How much is the birth going to cost you? Will that be a monthly debt for you too? Are you on track for retirement? Not sure about the details of the fund, honestly. Normally when we've taken money out (once for our wedding/honeymoon - we knew we may never travel again, and a private wedding just the two of us in Scotland, eating on the cheap while there, and then having a casual party at our house where I cooked all the food myself, once for the downpayment on our house, and once to cover medical bills) it's always worked out that we paid little to none in taxes, partly due to our broker managing the process well. Not sure how, exactly...something about taking some losses to balance it out I think? We could do a small car payment month to month, but not a large one, with high interest. The dept is 100K in student loans, most at low interest rates. There is no way to pay it off significantly. Paying off a big chunk wouldn't reduce our monthly payment much at all, because the payment is based partly on income I believe, not the principal. Student loan payment is about the same as our mortgage right now. Not sure about the birth. IF we get the network deficiency gap exception thing, and they cover it in network, less than 1,000. If we don't, closer to 3-4K I think. We have some out of network benefits but a $1,200 deductible, plus then they only pay 60% after that. Normally her fees are around 5K I believe. (first appt is tomorrow) Yes, we are on track for retirement. We've both always contributed to our 401Ks, well, I don't anymore as I don't work, but DH does. Quote Link to comment Share on other sites More sharing options...
mommyoffive Posted August 2, 2016 Share Posted August 2, 2016 Not sure about the details of the fund, honestly. Normally when we've taken money out (once for our wedding/honeymoon - we knew we may never travel again, and a private wedding just the two of us in Scotland, eating on the cheap while there, and then having a casual party at our house where I cooked all the food myself, once for the downpayment on our house, and once to cover medical bills) it's always worked out that we paid little to none in taxes, partly due to our broker managing the process well. Not sure how, exactly...something about taking some losses to balance it out I think? We could do a small car payment month to month, but not a large one, with high interest. The dept is 100K in student loans, most at low interest rates. There is no way to pay it off significantly. Paying off a big chunk wouldn't reduce our monthly payment much at all, because the payment is based partly on income I believe, not the principal. Student loan payment is about the same as our mortgage right now. Not sure about the birth. IF we get the network deficiency gap exception thing, and they cover it in network, less than 1,000. If we don't, closer to 3-4K I think. We have some out of network benefits but a $1,200 deductible, plus then they only pay 60% after that. Normally her fees are around 5K I believe. (first appt is tomorrow) Yes, we are on track for retirement. We've both always contributed to our 401Ks, well, I don't anymore as I don't work, but DH does. Ok, well now I want to hear more about your wedding. Sounds amazing. I wish I would have done that. Could you pay off your Student loans with the inheritance? Or is it not enough. It sounds great that your inheritance has already been used to your benefit a few times and you know it won't have a lot of taxes. It sounds like using it for the car, the student loans, and or the birth would be a great idea since you are on track for retirement. Oh do you have an e-fund outside of your retirement? Quote Link to comment Share on other sites More sharing options...
ktgrok Posted August 2, 2016 Author Share Posted August 2, 2016 Not sure if this makes a difference, but I should add we don't live in an area with good public transportation. At all. My son will be going to the local community college, about a 25 minute drive. If he were to take the bus it would be a 3 hour trip, each way! Simiar type things for getting to the shops, etc. Orlando requires a car, pretty much. In dire straits we could get down to one vehicle, and I could drive DH to work, but it's a 40 minute trip each way. So not a great option either. And we'd still need a different car, because his vehicle won't hold all of us once the baby comes. Obviously, not an issue right now, but if mine finally breaks down, that's where we will be at. Waiting to see what the insurance people say today, about my van. Quote Link to comment Share on other sites More sharing options...
mommyoffive Posted August 2, 2016 Share Posted August 2, 2016 Not sure if this makes a difference, but I should add we don't live in an area with good public transportation. At all. My son will be going to the local community college, about a 25 minute drive. If he were to take the bus it would be a 3 hour trip, each way! Simiar type things for getting to the shops, etc. Orlando requires a car, pretty much. In dire straits we could get down to one vehicle, and I could drive DH to work, but it's a 40 minute trip each way. So not a great option either. And we'd still need a different car, because his vehicle won't hold all of us once the baby comes. Obviously, not an issue right now, but if mine finally breaks down, that's where we will be at. Waiting to see what the insurance people say today, about my van. Does your son have a car or are you driving him? What is the plan for your dh's car when it dies? If you have the e-fund it sounds like it might be a good use of the money and a great time to get the new car. Quote Link to comment Share on other sites More sharing options...
JustEm Posted August 2, 2016 Share Posted August 2, 2016 Hmmm. If they don't total the car will they just give you the money for the dent repair? If they do that, don't get it repaired and just save that cash for a car fund and then start saving monthly for it. If they do total the car I'd take money out to pay for it in that situation. 3 Quote Link to comment Share on other sites More sharing options...
Annie G Posted August 2, 2016 Share Posted August 2, 2016 If you have the discipline to make a car payment back to your investment account, it sounds like a reasonable idea. Figure out how much you can afford and try to get an automatic transfer set up. But that's only if your budget can support it...a new baby is going to bring more expenses so you don't want to overextend yourself. Hope you receive a nice sum for your van! Quote Link to comment Share on other sites More sharing options...
Pam L in Mid Tenn Posted August 2, 2016 Share Posted August 2, 2016 This might be an unpopular opinion around here but..... I think it is OK to have a car loan. In my opinion good, reliable, working vehicles are as important as your home. NOT an investment, mind you.... but the peace of mind that comes with a newish and reliable car far out weighs the interest charges. Just my opinion. Keep in mind that we live 20 miles in the country... 8 to nearest grocery store or gas station. And we've had to deal with broken cars alot. 3 Quote Link to comment Share on other sites More sharing options...
zoobie Posted August 2, 2016 Share Posted August 2, 2016 Have you tried applying for a loan with your credit and joint income? It varies by state how that works, but here, it asks for total household income, not personal income. Child support and maintenance may be included in monthly income as well. Quote Link to comment Share on other sites More sharing options...
Heatherwith4 Posted August 2, 2016 Share Posted August 2, 2016 Around here, we do what is necessary to have a reliable safe vehicle. We don't live where walking is an option, and I don't think you do, either. It's a safety issue, to be honest. Especially since you're pregnant. 1 Quote Link to comment Share on other sites More sharing options...
Garga Posted August 2, 2016 Share Posted August 2, 2016 Hmmm. If they don't total the car will they just give you the money for the dent repair? If they do that, don't get it repaired and just save that cash for a car fund and then start saving monthly for it. If they do total the car I'd take money out to pay for it in that situation. This seems like a good plan. Drive your almost-rusty car until it dies or until the next expensive repair, and in the interim save up to get something new. Your old car isn't dead yet. It still does work. If you can eke out another 1/2 year or so, with the dent repair money socked away, then you wouldn't have to touch the inheritance money. 3 Quote Link to comment Share on other sites More sharing options...
ktgrok Posted August 2, 2016 Author Share Posted August 2, 2016 Does your son have a car or are you driving him? What is the plan for your dh's car when it dies? If you have the e-fund it sounds like it might be a good use of the money and a great time to get the new car. I'm driving him. Honestly, he's not in a huge hurry to drive on his own (has his permit) and given the horrible horrible horrible traffic/drivers in Orlando, I'm not pushing him. I think it's wise to wait a bit longer. He is saving up money for a car and insurance, but it will be a bit longer. I think he's got about 2K right now. I'm encouraging him to keep saving for another year. We have some of the highest rankings for car accidents in the country, it's really really bad. Since I moved here 8 years ago I've been rear ended twice and my husband once. This is the first time the other person actually had insurance. For my husband's car, i don't know. He's pretty mechanical, and it is an easy to work on truck, so he's keeping it limping along. It also gets less milage than my car, as he's at work all day not driving to various activities. If it truly died I'd drive him to work in my vehicle temporarily, assuming I had one that worked, lol. Otherwise, he could and would get by with a beater for a few thousand, bought out of savings, but he doesn't want us in something like that. Quote Link to comment Share on other sites More sharing options...
ktgrok Posted August 2, 2016 Author Share Posted August 2, 2016 Hmmm. If they don't total the car will they just give you the money for the dent repair? If they do that, don't get it repaired and just save that cash for a car fund and then start saving monthly for it. If they do total the car I'd take money out to pay for it in that situation. That's what I don't know. If they don't total the car, then that's what we will do. If they total it is more what I'm worried about. Quote Link to comment Share on other sites More sharing options...
ktgrok Posted August 2, 2016 Author Share Posted August 2, 2016 Have you tried applying for a loan with your credit and joint income? It varies by state how that works, but here, it asks for total household income, not personal income. Child support and maintenance may be included in monthly income as well. Yes, that's what I did, but they still pulled his credit too. Quote Link to comment Share on other sites More sharing options...
magnificent_baby Posted August 2, 2016 Share Posted August 2, 2016 I would discuss this with your Edward Jones agent. They've never steered us wrong. I'm not an expert, but if I were in your shoes I would strongly consider using your inheritance and 401K to pay off your student loan debt. That may significantly improve your credit and take a huge burden off your bills. I'm guessing what you are paying in interest is way higher than what you are making on the investments. Quote Link to comment Share on other sites More sharing options...
ktgrok Posted August 2, 2016 Author Share Posted August 2, 2016 Around here, we do what is necessary to have a reliable safe vehicle. We don't live where walking is an option, and I don't think you do, either. It's a safety issue, to be honest. Especially since you're pregnant. that's kind of where I'm finding my own thoughts. I had previously driven some pretty old beat up cars. But it was just me, you know? Then when I got divorced I did invest some of the profit from selling the house into paying cash for an almost new, compact Hyundai, back when they were less expensive. At the time, I felt VERY insecure due to the divorce, and knowing I had a reliable, under warranty vehicle, made a huge difference in peace of mind. Now, I don't need something under warranty, we have savings to handle emergency repair and my husband is handy, BUT, safety is a huge factor. I live in an area now with really really bad, super awful traffic and bad drivers. Lots of tourists who are switching lanes quickly, not looking where they are going, etc. And I'm going to be honest, the last time my van died it scared me. The fuel pump broke, and the gauge read that I had over a quarter tank and it was actually empty, and I ran out of gas on a busy road. Thankfully, I was in the far right lane about to turn into a gas station, so I just coasted in, with no power, and stopped a few feet from the pump. Had there not been a gas station RIGHT there, or somewhere safe to pull over, I am scared to think what would have happened. Again, I've been rear ended twice since moving here, and that was without my car breaking down in the flow of traffic. At the time I was just thankful, but I think it has really shaken me. We had the fuel pump replaced but it is still acting weird. I really don't trust it anymore, is what it comes down to. It's had engine lights come on and then go back off for no reason, a few times was slow to start for no reason anyone can find, and now this. When I drive to my parent's house it is on a fairly remote highway, with no cell phone reception in several spots, and no gas stations, no exits, no nothing for miles and miles. About a year ago it did break down on that road, but thank heavens I was actually, once again, right by the ONLY gas station for about 50 miles. Yeah...i think typing this out I'm realizing I really need to talk to DH about how much we could pull from investments. His career, thankfully, is on a very upward trajectory. He makes 3 times what he did when we got married, and it should continue to climb somewhat. Future income looks much better than present circumstances. A year from now he'll get a good bonus (it's built into his contract the exact amount, so not some nebulous thing...he can get more than that amount, but not less), but I really don't think I can wait a year for a newer car, which was the original plan. I think it makes more sense to take the money out, if we can, then re-invest his bonus next year, when we get it. 1 Quote Link to comment Share on other sites More sharing options...
TranquilMind Posted August 2, 2016 Share Posted August 2, 2016 So, I've talked about needing a new vehicle before. I drive a 2006 Dodge Caravan that has had multiple problems, we just put another $600 into it and still isn't right. It has I want to say 160,000 miles on it? Maybe more. I drive 30 minutes or more here and there (one way) almost daily, and an hour plus each way to my mom's a few times a month. In other words, we drive a lot. In crappy traffic. It has some areas that are going to start to rust (not rusted yet, but there is some minor corrosion) and now it is in the shop to have a dent repaired from the car accident I was in a week ago. I wouldn't care bout the dent, but the paint is gone there too, and I am assuming that will rust if left exposed? Anyway, insurance is to cover the repairs, but I got a call today that the repair is over $2K, so they need to do an estimate of the vehicle's worth tomorrow. They may decide it isn't worth fixing. Whatever they give me for the car, it won't be anywhere near enough to buy a newer, more reliable van. We have some money in savings, but really don't want to blow through that, and it's not enough to get a newer, lower milage van. (we have about 10K in savings). We don't qualify for a decent car loan via our bank because of DH's bad credit...debt to income ratio is bad due to student loans (which we will be repaying forever) and he has some old delinquencies/medical bills. We don't carry a bunch of credit card debt or anything like that. We don't have any car payments currently DH drives a beat up pick up that we paid cash for but once the new baby comes there will be NO way to fit all of us in there if/when my breaks down again. At this point, I'm considering taking money out of some investments we have, inheritance money that is in an Edward Jones portfolio. I hate to do that, but at the same time, it makes more sense to lose interest there than to pay high/outrageous interest on a whatever crappy car loan we could get. We are looking at vehicles that are around 15K, to get something low milage (under 50,000 miles) and a bit newer. We wouldn't touch the 401K accounts, or the kids college accounts, just the "extra" money that we have in there. Bad idea? Yep, right there with you and looking for a reliable vehicle right now. I drive them til they stop and then donate them. However, now that I am getting older, I'm less adaptable to sitting in subzero weather or blazing heat waiting for someone to get me. Yes, I purchase cash because it saves thousands of dollars over time. So I would do it. You drive a lot more than I have, but now that one is moving to campus, I will be doing it more. Don't just accept a figure from the insurance company. Do your own research and present an argument to them about why your vehicle is worth X dollars. Pull up ads, and sold costs wherever you can. Do a "What's my car worth" analysis on edmunds.com. Fight for it. They will try to give you as little as possible. 1 Quote Link to comment Share on other sites More sharing options...
StephanieZ Posted August 2, 2016 Share Posted August 2, 2016 You might be surprised at how long your old van can limp along if you're willing to muddle along. We had a 2003 Volvo that "needed" $4500 in repairs 2 years ago, according to the three different shops we took it to . . . As it was old, beat, high mileage, and worth less than half that, we skipped all those repairs and did only $500 worth of stuff that was safety related. It kept running for 18 months with no significant problems, then got increasingly "rough" the past few months. It finally died last week after a relatively minor accident shook things up too much, lol. When it was officially totaled and dead, we went out and bought a new car. Anyway, we were shocked and very pleased to have gotten 2 "free" years out of that car. It allowed our teens to "get their accidents out of their systems" in a car that wasn't worth anything but was still very safe. Since I calculate that we "use up" about 5k of value per year per car (we drive a lot of miles), pushing off the new vehicle purchase by 2 years saved us nicely, especially if you add in the several minor accidents that the "old" car got in that we didn't bother to fix (or fixed on the super-cheap) but DEFINITELY would have fixed properly on a new car . . . During these entire 2 years, we knew we'd need to replace that car soon, but we figured we'd just eek out as many miles as we could, and replace it when it drops. That was fine. I kept in mind what sort of car we'd get to replace it with when needed, and when we finally decided to replace it, I had the deal struck on the replacement vehicle in under an hour, and bought it later that day. Realistically, any car, even new cars, break down every so often. So, I wouldn't let that drive your replacement vehicle purchase just yet. If the van was breaking down regularly (say more than a couple times a year) and you couldn't figure out how to fix it (or it wasn't worth the $$ to fix it), then, sure, it's not reliable enough . . . But age alone isn't something I'd replace a vehicle for. So, anyway, my vote is to take whatever money the insurance gives you, add it to your savings, and start adding a "car payment" amount into that savings as well. Hopefully, but the time your van actually drops dead, you will have the cash ready to replace the van. At that time, if needed, cash out enough investments to make up the full cost. I wouldn't cash out the investment accounts since you have cash in savings. I'd use the cash first, then take investments if you run out of savings. 2 Quote Link to comment Share on other sites More sharing options...
ktgrok Posted August 2, 2016 Author Share Posted August 2, 2016 Realistically, any car, even new cars, break down every so often. So, I wouldn't let that drive your replacement vehicle purchase just yet. If the van was breaking down regularly (say more than a couple times a year) and you couldn't figure out how to fix it (or it wasn't worth the $$ to fix it), then, sure, it's not reliable enough . . . But age alone isn't something I'd replace a vehicle for. I think we are paying for repairs at least three times a year right now. Which monetarily is still cheaper than buying a different car. However, safety is more what I'm concerned about right now. I'm concerned it's going to break down on the road, honestly. I am not sure how to explain all that is acting wrong with it, but I'm starting to think a priest instead of a mechanic may be the way to go, lol. We spent $600 a few weeks ago on it, and it still isn't right. When it gets to just over 1/4 a tank the gas gauge starts wildly going up and down and the light comes on that it is near empty. Even though it isn't. When I put gas in it, it let's me put in about 1/2 the volume of the tank. So not only wasn't it empty, but not even at 1/4 tank. And in the past two weeks twice it wouldn't start right away. I try again and it starts, but something smells like it is burning, then quickly goes away. Quote Link to comment Share on other sites More sharing options...
StephanieZ Posted August 2, 2016 Share Posted August 2, 2016 Ugh!!! Sounds to me like time for a new car. I'd personally prefer to use savings first, then dip into investments. Have you looked at a new Kia Sedona minivan? We bought a new one 5 years ago, for, IIRC, right $25k. WAY cheaper than alternatives. We had a DEAD AND DEADER, barely running, beat up, 120k+ miles, 6+ years old, body damaged, broken doors, broken entertainment system, needing over 5k in repairs for body damage and defective doors, etc, almost dead Toyota Sienna, and the Kia dealer gave us about 12k (yes, you read that right! It was insane) for it. So, our net cost on the new van was like 12k. Nuts! That Kia minivan is now 5+ years old with over 155k miles on it, never a single problem with it. We just tuned it up and cleaned it out for our college girl to take back to campus next week. I'm hoping/expecting to get several more (lower mileage) years out of it, and I don't have any reason not to expect that to work out. I've bought one used car, and it was a total disaster. I won't buy used, so I'm no help there. Other people can do it, but not me, never again. If I were you, I'd find a Kia dealer, find the cheapest NEW Sedona I could, see what they'd give me for trade-in on that dying old van, and probably just go with that. See if the dealer will do financing for you (doesn't hurt to try), and if they won't, then spend your savings + however much investments you need to cash out, and call it a day. You'll have a reliable vehicle until your eldest is "up and out" and then you can consider a smaller vehicle next time (which are a lot more affordable). 1 Quote Link to comment Share on other sites More sharing options...
katilac Posted August 2, 2016 Share Posted August 2, 2016 Yes, if there's no painful tax penalty, I would definitely pull the money. Depending on how much money is in there, I would be quite willing to pull it all out to buy a new car if possible. We are big savers and very frugal in many ways, but we always buy new cars. Used is just not worth the headaches for us, and we haven't found it to be true at all that even new cars need repairs every now and then. I've had my Honda CRV for 7 years now; zero trouble, zero repairs. I can't quite remember for my old Nissan Quest, but I would say it was at least that long and likely more like 9 years before it started needing repairs. I had my Quest for 11 years; it could have gone longer, but they were having trouble getting the A/C permanently fixed, and we took advantage of the Cash for Clunkers program at the time to trade in (they were giving extra money if you went to a vehicle with better gas mileage). My CRV, I will be amazed if it doesn't last for 15 years or more. Super reliable cars tend to hold their value, so you only save so much buying used (and if you keep it very long-term, it evens out). And, just to add advice that you haven't asked for, I would not automatically place all of dh's future bonus back into long-term investments. It might make sense, because it seems like you have fairly easy access to it, but I'd discuss it with the financial guy. You have a lot of expenses coming up. 1 Quote Link to comment Share on other sites More sharing options...
ktgrok Posted August 2, 2016 Author Share Posted August 2, 2016 I hadn't thought about the fact that trading it in they might give us more than it's technically worth. Might be worth looking into! Even if we didn't buy new at that point, buying something still under warranty might be something we could do. I'm definitely willing to look at Kia but 'm not sure it's less expensive than another Grand Caravan. The warranty is better though. 2 Quote Link to comment Share on other sites More sharing options...
StephanieZ Posted August 2, 2016 Share Posted August 2, 2016 I hadn't thought about the fact that trading it in they might give us more than it's technically worth. Might be worth looking into! Even if we didn't buy new at that point, buying something still under warranty might be something we could do. I'm definitely willing to look at Kia but 'm not sure it's less expensive than another Grand Caravan. The warranty is better though. Well, if the Carvan is cheaper and comparably good car, then that's great, because now you have two new vans to compare and to let the dealers compete with each other to get it to you for the best price. Find good Kia and Dodge dealers (hopefully 2 or more for each brand) and let them give you their best price and best deal on the trade in. Check out TrueCar for price ranges and for incentives, etc, so you know what to look for in a good price/deal. Ask around locally for the best salespeople at the dealerships you have available within a day's drive. (We drove 100 miles to get our Kia -- it was several thousand dollars cheaper there than at our local dealer.) We found a great sales person at our local Subaru dealership, and we've bought 2 new Subarus from him in the last 7 months -- having a great sales person makes it SO MUCH less painful. (I hate car shopping and I hate haggling!) Also, be aware that car loans are generally MUCH MUCH easier to get than mortgages, etc. So, just because you can't get credit for a mortgage doesn't mean you can't get a car loan. Go ahead and ask the dealers for financing; you might be surprised. Super cheap financing (1.49% on each of our new Subarus -- one for 3 years, one for 4) can make it more financially sensible to finance a new car than pay cash, sometimes. Quote Link to comment Share on other sites More sharing options...
ktgrok Posted August 2, 2016 Author Share Posted August 2, 2016 So...looking, the Kias are significantly more. However, I did find that there are brand new Dodge Caravans for about $20,000. Used ones with under 60K miles are about $16,000 to $17,000. At that point, if we can swing it, it does seem to make more sense to buy new, with a good warranty. IF we can swing it. And looking online, with my husband's credit, we are looking at more like 6% interest, possibly higher. Quote Link to comment Share on other sites More sharing options...
hornblower Posted August 2, 2016 Share Posted August 2, 2016 But the Kia is way more reliable than the Caravans. In a couple years you'll be in the same spot with an unreliable car. I would buy a used Kia or Toyota van, even a well used one, over a new or newish Caravan. My 99 Sienna is still going strong. 2 Quote Link to comment Share on other sites More sharing options...
Hilltopmom Posted August 2, 2016 Share Posted August 2, 2016 Siena's rock, btw. And after you drive them for a decade, you can still trade them in for like $13,000! BTDT, looking to get another:) Quote Link to comment Share on other sites More sharing options...
ktgrok Posted August 2, 2016 Author Share Posted August 2, 2016 Siena's rock, btw. And after you drive them for a decade, you can still trade them in for like $13,000! BTDT, looking to get another:) Yeah...but that means it will cost me more than that to BUY a decades old one, lol. Quote Link to comment Share on other sites More sharing options...
ktgrok Posted August 2, 2016 Author Share Posted August 2, 2016 I'm going to read up on the issues, reliability, etc, but I will say I've had more than one mechanic tell me that the real reason the Toyotas and Hondas seem more reliable, and last longer is that the people that buy them EXPECT them to last, so they do all the routine maintenance on them that the people often don't bother with, and that is what makes the difference. Quote Link to comment Share on other sites More sharing options...
JustEm Posted August 2, 2016 Share Posted August 2, 2016 (edited) This might be an unpopular opinion around here but..... I think it is OK to have a car loan. In my opinion good, reliable, working vehicles are as important as your home. NOT an investment, mind you.... but the peace of mind that comes with a newish and reliable car far out weighs the interest charges. Just my opinion. Keep in mind that we live 20 miles in the country... 8 to nearest grocery store or gas station. And we've had to deal with broken cars alot.But they can't get a good loan with a reasonable interest rate. If they could that would be the better option. But when you have bad credit and money it is usually a better idea to spend the money and avoid high interest rates because you end up spending more with high interest rates. Now if their car loan rate was lower than what the investment is earning in interest then it would be a smart idea to get the loan Edited August 2, 2016 by hjffkj Quote Link to comment Share on other sites More sharing options...
Guest Posted August 2, 2016 Share Posted August 2, 2016 You might be surprised at how long your old van can limp along if you're willing to muddle along. We had a 2003 Volvo that "needed" $4500 in repairs 2 years ago, according to the three different shops we took it to . . . As it was old, beat, high mileage, and worth less than half that, we skipped all those repairs and did only $500 worth of stuff that was safety related. It kept running for 18 months with no significant problems, then got increasingly "rough" the past few months. It finally died last week after a relatively minor accident shook things up too much, lol. When it was officially totaled and dead, we went out and bought a new car.(snip) This (and the rest of your post) is exactly what we have been doing with my 2002 Volvo. :0) My son drives it now. Same experience with the "you neeeeeeed $$$$ repairs"--we did $$, and it just keeps rolling. The brakes needed to be replaced, and that was going to be umpteen hundred dollars. My dh got on the internet, found the instructions, bought the parts and a few tools and did it himself. So proud of him! (He is an MBA/software geek.) Then he figured what they hey and did the brake replacement on his own car. The serpentine belt broke the other day while my son was driving to work. DH took him to work, looked up on the internet how to repair the belt, figured out that other parts didn't look right and so he fixed THAT. No tow, no expensive mechanics. Good for him. My ds is beginning to despair, "Will this car never die???????" Well, when he wants to, he can get what he wants with his own money. :0) Quote Link to comment Share on other sites More sharing options...
Miss Peregrine Posted August 2, 2016 Share Posted August 2, 2016 I'm going to read up on the issues, reliability, etc, but I will say I've had more than one mechanic tell me that the real reason the Toyotas and Hondas seem more reliable, and last longer is that the people that buy them EXPECT them to last, so they do all the routine maintenance on them that the people often don't bother with, and that is what makes the difference. Not the case, here. We do oil changes half as often as suggested and other than a timing belt at 100,000, we don't do anything else but drive it. It's pushing 200,000 here soon. We had a Kia Sedona years ago and it was a great car. We only got rid of it because dh gave it to someone, lol. Very reliable and I believe they still have a 10 year warranty. 1 Quote Link to comment Share on other sites More sharing options...
Mom2pandc Posted August 2, 2016 Share Posted August 2, 2016 I am about as anti-debt as they come after fighting my way through debt and out of all debt over the last several years. I'm also a Dave Ramsey follower after following his financial advice for years and have completely flipped our financial situation into a very very positive one. I don't think that you can get ahead while in debt. You are feeling defeated by your student loans and saying you will never pay them off. Debt is debt. Trying to get financing on a car is not a good idea. You already stated you've been denied. That's for a reason. You have a lot of debt already! Adding more to the mix is not going to make your life better. Ask yourself, "if I had a paid for $15k car, would I go take out a loan against it for the whole value in order to put $15k more in my Edward jones account?" I'm guessing the answer is no. And it's really the same thing. If you finance the car, it's an illusion that you have kept the $$$ in your account. You owe the bank that amount. I would not touch the retirement accounts or college accounts, or your $10k savings/emergency fund. This isn't an emergency it's just a really big inconvenience that does need to be addressed sooner rather than later. So here are a couple suggestions 1. If they total the car based on a dent, see if you can 'buy back' the car for a cheaper amount than the insurance check. Limp it along for a few months. In the meantime, I would TEMPORARILY stop putting money in retirement, college, emergency savings, and pile up as much cash as you can to put with the remainder of the insurance check and buy a van with that as soon as you get enough together to buy a cheap van. Then continue saving for another 6 months or so and keep moving up in vehicle until you're in a decent priced reliable vehicle by selling your current one and putting that $$ with the $$ you save. As soon as that's taken care of, jump right back into investing in retirement, etc. although part of me thinks you need to keep that on hold longer and pay the student debt off. 2. Take the $ out of the inheritance to make up the difference of what you get from insurance. I would lower my price point to about $10k. You may have to look farther out or for less of a car, but you should be able to find something reliable for that price. It might not be super pretty, and it might not be exactly the kind you want, but you need to protect your investment and you also are in hundreds of thousands of dollars in debt between house and student loans. I encourage you to pick up a copy of the total money makeover at the library. It has seriously changed our outlook on money and improved our marriage and financial life drastically. Honestly, if you try the method for 6 months and hate if, you can always go back to the way you are currently doing things.....what do you have to lose? 1 Quote Link to comment Share on other sites More sharing options...
ktgrok Posted August 2, 2016 Author Share Posted August 2, 2016 I would LOVE to find something for around 10K. I don't need pretty, or fancy. Just reliable. However, once you start getting closer to 100,000 miles it's hard to know it WILL be reliable, isn't it? I'm okay with older, but as much as I drive, I am not sure it's worth it to risk a vehicle that already has close to or over 100,00 miles...or am I thinking of this wrong? DH does fix some things, he's replaces brakes, changed belts, etc. I don't count those things in repair costs really. But we are getting to where his time (working two jobs) is worth as much as it is to take it to the shop, for big things that would take up more than a day's work. 1 Quote Link to comment Share on other sites More sharing options...
prairiewindmomma Posted August 2, 2016 Share Posted August 2, 2016 Question1: Would I take money out of investments? ---------I would consider it after crunching numbers and ranking priorities. After the bills are paid, having some sort of decent emergency cushion would be a top priority. There are too many things that can easily hit an emergency fund--ours has been hit a few times so far this year. The inheritance money you have right now is a decent cushion, and I'd be hesitant to target it unless I had to. No car = yes, I'd use the money. Car in the process of dying = maybe. For us, in making the same decision last month, the answer was no. Do you have a AAA membership with towing, gas delivery, etc.? We do, and that's helping us get by with a mostly reliable but questionable minivan. We've used AAA twice so far this year. Question 2: What would I buy? My friends who have had Caravans have all regretted buying them. My BFF had THREE transmissions go out in hers....while it was under warranty. We are getting either a Sienna or Odyssey when we replace our current minivan. 1 Quote Link to comment Share on other sites More sharing options...
Guest Posted August 2, 2016 Share Posted August 2, 2016 I would also check on the car loan rates. We bought that aforementioned Volvo using a 1% loan, even though we could have paid cash for the car. Our money could get 4% (at the time) in a ridiculous bank account, so it made no sense to spend that 3% difference. Once we proved to the insurance company that we could pay the loan off at any time, we didn't have to pay for comprehensive on insurance, which would have erased the benefit of the loan. Sometimes debt can work FOR you. But not very often. The other thing that has worked for us is buying way *under* what we could afford and often below what we really wanted. I seriously wanted a suh-weet car about 22 years ago. I could taste it, I wanted it that bad. It was $38,000. We ended up buying a completely boring car which cost $18,000. It was so banal, but it did what we needed a car to do. I drove it for 7 years, at which time we needed to upgrade so I could participate in the school carpool, In that 7 years, the $20,000 we didn't spent on my Lustmobile had doubled to $40,000, which is the cash we could have paid for the Volvo (had we not got the 1% loan). FREE CAR. That was an enormous lesson to me...and even when we got the Volvo...we pared down from the one we could have afforded...so it was "free car plus change." :0) And my sister got a free Boringmobile which was just in time. My point is this: limp along as long as you can, figure out what it is you really need--safety, reliability, number of seats--and find out where there might be a little desperation to sell. You want the seller to be more desperate to sell than you are to buy. And until you find that person or you absolutely HAVE TO buy, keep collecting cash any way you can. I'm super happy for your dh being on his way up, and for you having the new baby, by the way! Both of those things are so good to hear! Quote Link to comment Share on other sites More sharing options...
idnib Posted August 2, 2016 Share Posted August 2, 2016 (edited) I think you could get a car for ~ $10k. My car is 14 years old, worth about $4k, and I wouldn't hesitate to drive it. It's never given me a single problem and I'm somewhat lax about maintenance. For $10k around here, in a very high COL area (SF), I could get the same car, but 3-4 years newer, for $10k. I'm not saying you should get a 14-year old car, but that you can find a very reliable car in the ~$10k price range. Talk to your Edward Jones person or a tax person before you make any decisions based on feedback here. You may be surprised at how much you owe in taxes if you pull the money. It may be more than the high interest rate you're worried about. Another idea I know some people won't agree with but I'm hesitantly throwing it out there because it's not been mentioned yet: a home equity line if you own your own home. Interest rates are pretty good and it should be safe to borrow against it as long as you keep the money in investments so you could pay it off in full if you had to. I'm pretty anti-debt and I don't usually suggest a home equity line for a car, but you're in a pickle and as long as you keep the balance in investments and maintain discipline about paying it down, it could work. Edited August 2, 2016 by idnib Quote Link to comment Share on other sites More sharing options...
ktgrok Posted August 2, 2016 Author Share Posted August 2, 2016 (edited) We do have roadside assistance via our car insurance. (who by the way, have been excellent to work with so far - Progressive). Most of the time I call DH though, so he can see if he can get it started, evaluate if we really want to tow it or what it needs, etc. A flat or whatever they would deliver, yes. Although again, DH might be faster :) Stuck on the side of the road for an hour or two, I can deal with. Breaking down in traffic is what scares the creeping crud out of me. And to help brainstorm what we need, We will have 3 in various car seats (two in Graco Nautiluses, plus the new babe i whatever we get for the babe) plus one tall and lanky teenager, plus DH and I. We routinely drive an hour and 15 minutes to my parents' house, 45 minutes to my sister's house, plus 30 -45 minutes to local activities. In bad traffic. (I know..I keep complaining about it, but I hate it so much) Features wise, the only thing I really want next time is the rear air conditioning. My poor kids in the back seat of the van roast in Florida heat most of the year, as my current van only has A/C in the front, and the windows don't open. SaveSave Edited August 2, 2016 by ktgrok Quote Link to comment Share on other sites More sharing options...
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