I have a guest post up today at My Money Design, which you can check out here. I think you’ll enjoy it. But now, back to your regularly scheduled programming.
For my 17th birthday, my grandparents gave me their 1998 Honda Civic that had only 14,000 miles on it. Little did I know how lucky I was. Since that time, it’s gotten me through high school, college, those crazy post-grad years, a marriage, and the first 15 months of fatherhood. It’s been good to me. I love it.
But over the last few years it’s been slowly dying. It’s needed between $500 and $1,200 in repairs each year, and I think I’ve finally hit the end point. I don’t know for sure yet, but I had to take it in to the shop again last week and was told by my mechanic that it likely needs a new engine. That’s a $2,500 part on the low end, $4,000-5,000 on the high end. If that’s indeed what we’re looking at, then we’re going to replace it.
So today I’m asking you, my readers, for some help. I’ve never bought a car before so I’ve been looking far and wide for good information. The comments here are always insightful and many of you are much wiser than I in the ways of the world, so I couldn’t think of a better place to get some good advice.
What car to buy
We have two big criteria in terms of what we’re looking for:
1. Long term cost. We’re willing to spend more up front if it means we can save money over the life of the car. We plan on driving this thing into the ground and want long-term reliability.
2. Space. We’re planning on a second baby in the very near future, so we’re looking at two car seats in the back. We won’t have a third person back there on any regular basis, but we’d like the option to do so on rare occasions, even if it’s a little tight. Trunk space is also important what with strollers, groceries and the crazy amount of stuff you need to take for babies on family vacations.
Other information that affects what we’re looking for:
My wife has a Scion XA, which is a great car but incredibly tiny. It’s likely that we’ll want to replace it within the next 3-5 years, simply because it won’t be practical as our family grows. (We’re going for 3-4 kids. Wish us luck!). Our thinking is that we’ll probably be going the mini-van route at that point, so we’re not looking for a mini-van now. We want something big enough to fit our immediate needs, but it doesn’t need to be big enough to fit our bigger plans for expansion.
We don’t put a lot of mileage on our cars. This car won’t get more than 15,000 miles per year and it will likely be closer to the 10,000 range.
Neither of us care about a superior driving experience. My Civic has like 90 horsepower, so whatever we get will automatically be a HUGE upgrade. As long as the car can stop, go and turn with relative ease, we’ll be happy. Long-term reliability is the big draw for us (we’re so exciting!).
We have the cash on hand to pay for a new car, so we won’t need financing. We don’t have a particular preference new or used as, like I said above, our biggest factor is long-term cost. If it costs more now for a better long-term return, we can handle it. But any opportunity to save money would certainly be attractive.
How to buy
John at Frugal Rules wrote an incredibly helpful article on his buying process just a few weeks ago: 5 Great Ways to Save Money When Buying a New Car. It has a lot of really good information and it’s serving as my starting point for advice. I particularly like the tip about emailing multiple dealers and asking what they can offer. Doesn’t the internet make negotiating so much easier!
If any of you have any other tips on navigating the purchase process, I’d love to hear them. Particularly if you have any good advice on finding a deal on a used car. Again, this isn’t something I’ve done before, so anything you’ve got would be welcome.
My research so far
The cream of the crop in terms of what we’re looking for seem to be the Honda CR-V and the Toyota RAV-4. Both cars are spacious and incredibly reliable. Unfortunately, that also means that it’s incredibly difficult to find a good deal on a used one. They just don’t lose value, which has me thinking that if we’re going that route, buying new is the way to go. You get the warranty, you aren’t dealing with any wear and tear, and you aren’t facing the immediate depreciation of a lot of other cars. I’d love to hear other opinions though.
Beyond that, some popular choices seem to be the Subaru Forester and the Hyundai Santa Fe. I have a list with about 15 more options as well that I’m trying to narrow down. I haven’t done enough research on these yet to determine what the new vs. used tradeoff looks like.
Call for help!
So that’s where we’re at right now. If I have to go through with this, it’s going to be the biggest financial commitment of my life to this point, so any and all advice is much appreciated. Thanks in advance for anything you have to offer. I already know you guys are going to come through with some awesome stuff.