Help me help a friend - car dilemma

[max9505672]

Hey!

I am looking for advices to help a friend take the best decision regarding her car situation. First, I have to say that this friend is not mustachian at all, but I'm hoping I can influence a little bit in that regard.

So, she owns a 2012 Mini Countryman with 105,000 miles. She borrowed money to buy the car and still owes 9K$ (CAD) for it. The car is starting to show some wear and she'll have to spend money to either be able to sale the car at a reasonable price or keep it. I estimated 1.5K$ (will have exact diagnositc in the next few days). For the purpose of the exercice, let's say that she could sell the car for 10.5K$ if she repairs it, therefore be able to pay the debt (or do something else with the cash).

What she wants to do now: Because the car is ''getting old'', she wants to rent a brand new Audi Q3 for 4 years and give the Mini in exchange to the Audi dealer. Of course, the dealer will give her a ridiculous price and she'll end up still owing money on the Mini. I suspect Audi will offer to finance the difference at a ridiculous rate too, but I am not even sure. This, of course, seems like a very bad idea knowing that she also has small credit card debt, bad credit and no savings.

What I would do : Repair the car, save money, sell the car, pay the debts, buy a cheaper car. But this is too much a big chunk for her, I know it.

So my question: What would be a good compromise? Keep her plan, but convince her to rent an entry level car for now? Convince her to keep the Mini for a while and save as much as possible to buy a good used one? Sell after repairs, keep the loan and buy a cheaper used car while paying off debt? Any other suggestion?

*Since I don't have exact number yet regarding rent price, Mini sell price, repairs, rates on loan, etc., I acknowledge it might be hard to answer. Will update as I get more details.
 
Thank you all!

[Ecky]

Minis have "chronic reliability issues".

http://www.dashboard-light.com/vehicles/MINI_Cooper.html

Anecdotal evidence I've collected over the years strongly supports this. They also have BMW-expensive parts.

Audi is also ranked pretty low, but their Q5 and Q7 seem to be pretty reliable:



Source

Question is, if she's set on European luxury cars, do you think you can convince her to get into something like, say, a 3 cylinder Mitsubishi Mirage? It might be productive to inquire into why she's choosing the cars she's choosing.

[chemistk]

I think the best you can do is outline the math for her. Very clearly and concisely write out what she stands to lose (or gain) if she follows through with her plan. Explain what it will cost to lease the Audi. Then, also draw up some other quick calculations such as leasing a Lexus/Acura, or a higher-end Toyota/Honda.

She sounds like (as do so, so many other folks) she only cares about the image of the car and how she'll feel when driving it. It would be hard to convince her to take your word for it without at least showing some numbers.

If after all that she is still bent on her initial plan, accompany her to the dealer while she negotiates (gets cleaned out by?) with the salesperson. When presented with the numbers, help her untangle everything and show how close your initial projection was.

Finally, recommend that she also look into lower-end cars or lightly used ones - urge her to try them out and see just how similar they really are to her dream VW Audi.

You can only go so far with this, hopefully reason and logic will prevail.   

[Dr.Jeckyl]

Fix the MINI and keep the MINI. The problem as an earlier poster pointed out is that while the MINI is not known as being reliable or cheap to fix neither is an Audi. The other issue is I'm not sure your friend would actually get that much for the MINI with that many miles. I could be a little off on my conversion but 11.5k CAD is a little under 9k USD. You can find Countymans (Countrymen??) for that price with less miles around my parts and that's from a dealer not an independent seller. If they buy the new car and trade the old for it they would be underwater on the loan. They would either need to come up with cash to put on top of the trade or borrow more money than the Audi is worth. Not too mention that leasing a car will leave you poorer without a car at the end of the lease vs. buying which leaves you poorer but at least you still have a depreciating transportation device at the end.

What I am about to suggest while not mustachian will likely save her money. Since she seems to like fancier cars like the Audi could you steer her to a pre-owned Lexus? It would be a much more reliable car with lower maintenance costs. But yet still be a luxury car.

[Goldielocks]

Canadian cars cost more, you can't just use the exchange rate.

[Dr.Jeckyl]

Canadian cars cost more, you can't just use the exchange rate.

Good point, I'm not thinking today. I should've thought of that. One of my favorite car shows on Youtube is based in Canada and I'm always amazed at the prices. If you like car reviews check out The Straight Pipes. However, after looking at autotrader.ca I'm going to stand by the earlier statement. I found cars with less miles (if miles is what the OP meant) for less money. Then again, I could be off because I don't know where in Canada so I picked Toronto. Keep the devil you know.

[max9505672]

Thanks everybody for your answers!

I finally managed her to keep to Mini until it's paid (somewhere is 2020). The thing is the engine is in pretty bad shape, it burns oil like crazy so it basically has 0 value on the second hand market. We'll keep a close eye on the oil level and hopefully no other major issue comes up until then. In the meantime, I'll push for her to get rid of her debts and save some money. Once the car we'll be paid, she could either sell it for peanuts on second hand market or give it in exchange to the dealership for a new (hopefully) entry-level, reliable car that she'll keep for 10 years.