Author Topic: Advice on a Car Purchase  (Read 920 times)

marie123

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Advice on a Car Purchase
« on: October 06, 2018, 08:32:43 PM »
I have a question about a car purchase.  I always get anxious when I make large purchases.

About my financial situation:  I am in the military and make around 98,000 dollars before taxes.  I don't have any debt.  I have about 120,000 K in an emergency fund.  I also invest 20 percent of my income in a Roth IRA that is set up through the military.  I have been doing that since I got in, but I don't actually know the exact amount that I have saved. I also have some stock and vanguard mutual funds but they are under 15,000.  I rent apartments because I move every two years and am single. I am new to this site and mostly drawn to it because of the self-dependence and environmentally friendly tips that you all have.  I don't actually want to FIRE because I love my job and do not see myself wanting to retire early. I drive a ton for work (I travel to different states regularly (almost weekly) and an airport that is two hours away).  I am also required to drive my car when I have to move which is every two years to a different part of the country.

I bought a new hyundai accent sedan for 15,000 when I got in the military and drove it for 6 years and put 85,000 miles on it.  I got rear-ended and it is totaled.  I am getting 6,500 in insurance money. 

I need a new car. I want something that I can drive for at least 10 years or 150,000 miles. I hate dealing with car repairs because I am super dependent on my car for work and can't take a cab or uber onto the military base. I am also single and moving all the time sometimes to isolated places so I hate it when my car isn't working. I bought my accent new because I drove beaters throughout college and law school in the northeast and got stranded so many times on the side of the road. This time I want a hatchback or very small crossover (I don't like driving larger cars).  I am looking new again because I want some of the new self-driving features.  If not for this, I would be looking for a slightly used this time around.  I know these features are a want versus a need, but I do drive a ton.  The main things I want are blind spot warnings and adaptive cruise control.  Unfortunately, these are not on many used cars except for luxury brands and they push me into higher trims on everything. I am between two cars. 
 
I can get a Honda Fit for 21,000.  I can get a subaru crosstrek for 27,000.  The prices are beyond the base trim because of the self-driving features. I like the subaru because it is off the ground and has all wheel drive.  I don't need the all-wheel drive now but would like it in case the military puts me an extremely snowy or isolated local (I never know where I am moving next).  Do  you all think I am being crazy for looking at something so expensive under the circumstances?  I would pay for both in cash.

« Last Edit: October 06, 2018, 08:56:39 PM by marie123 »

Ecky

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Re: Advice on a Car Purchase
« Reply #1 on: October 06, 2018, 09:52:37 PM »
I highly suggest watching this video. It's not related to your question, but a few items in your post jumped out to me and motivated me to share it.



Based on your income, a new economy (ish) car isn't entirely unreasonable, but there are plenty of millionaires on here who drive 10 year old Honda Civics, purchased used. Your prerogative how you want to spend your money.

Dashboard-Light is an excellent resource for finding historical reliability statistics for various makes and models. From the data, you really can't go wrong with any Toyota. The Honda Fit is also phenomenally reliable. Most Subarus don't rank very highly - all of their engines have higher than average failure rates from head gasket issues, but some are more higher than others.

Generally speaking, a manual Toyota or Honda is likely to serve you well past 300k, some few having zero non-routine maintenance to half a million miles. Automatics don't last as long, and with DCTs and CVTs in particular you're not highly unlikely to see some major maintenance before 200k.

Hope that helps.
« Last Edit: October 06, 2018, 09:55:38 PM by Ecky »

Awesomeness

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Re: Advice on a Car Purchase
« Reply #2 on: October 07, 2018, 08:35:41 PM »
I highly recommend my car.  Itís a 2014 Scion xB.  They stopped making them in 2015 but there are plenty out there w nice low miles.  You could probably find a nice 15 model w 20kish miles for about 15,000$.

Yeah itís a boxy thing but itís a hatchback. I have filed mine to the max hauling the college kid cross country. Itís nice finding a small dresser for 12$ at the thrift store and knowing I can haul it home myself. Or grabbing a couple clearance patio chairs at Loweís. You canít do that w a sedan.

Only negative is city mpg is 26. I will average 30 on road trips.

I had a 2013 fit before this. Really nice car. People would tailgate a lot in that farm not at all in my Scion. The Scion feels safe than my fit. Not as fun around the city and I like hwy driving better in my Scion.

They also made a Scion iM is now the Toyota Corolla I believe. If you find one w a Scion badge itís the exact car but will be cheaper than the Toyota version. 


Sailor Sam

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Re: Advice on a Car Purchase
« Reply #3 on: October 07, 2018, 09:25:07 PM »
Hey Ho, @marie123. Are you JAG DCO? I'm USCG O-4, just about to get my 12 year longevity raise.

I have no great answer for cars, because (shame, shame) I just buy new ones. But I'm going to push you towards a better understanding of your retirement contributions. I susect you're putting 20% base pay into the TSP, which is a 401(k) equivalent, not a IRA equivalent.

I really encourage you to visit tsp.gov, and figure out your login. Once you've got the info, login and check your allocation. The automatic allocation for those who don't choose otherwise is the G fund, which won't earn you much more than a plug nickle in gains.

How many YOS? If you're under 8-ish the. Go, go, go opt into the Blended Retirement System. Free money!

Let me know if you need help. I'm an XO.  This stuff is what i do, and I'm damn good. Also, check out @Nords stuff. He's our ambassador, and will never steer you wrong.

marie123

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Re: Advice on a Car Purchase
« Reply #4 on: October 07, 2018, 10:20:09 PM »
Thank you all for your help.  I did login before and change it to different funds.  I think I did fifty percent a fund based on the US stock market and another fund based on the international stock market.  I'm pretty sure I changed it to a roth IRA as well.  It was a confusing process though!! Could you tell me how to make sure it is a Roth IRA? I will check out his posts.  Thank you!!
« Last Edit: October 07, 2018, 10:21:50 PM by marie123 »

BuildingFrugalHabits

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Re: Advice on a Car Purchase
« Reply #5 on: October 08, 2018, 09:21:54 AM »
I would test drive and then decide.  I heard a lot of good things about the Fit and we drove one a absolutely hated it.  Road noise and finish made the car feel cheap vs the crosstrek which we also looked at.  I would highly recommend a Prius for it's efficiency, quality and reliability.  Ours is 12 years old and has not needed anything beyond oil and filter changes yet.  It's my primary mode of transportation to the ski areas in the winter with a second set of wheels and blizzak snow tires.  The other car to consider would be the Volt or a Leaf if your state offers rebates on those. 

Dave1442397

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Re: Advice on a Car Purchase
« Reply #6 on: October 08, 2018, 12:17:32 PM »
I'll second a test drive, especially on the Fit. I think it's a great car for shorter trips, but it would drive me insane on long highway drives.

Instead of the Fit, maybe check out the Honda HR-V. The EX trim level (starts at $23,700 and above have the following safety options:

Collision Mitigation Braking Systemô (CMBSô)*
Road Departure Mitigation System (RDM)*
Adaptive Cruise Control (ACC)*
Lane Keeping Assist System (LKAS)*

galliver

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Re: Advice on a Car Purchase
« Reply #7 on: October 08, 2018, 12:53:45 PM »
I would test drive and then decide.  I heard a lot of good things about the Fit and we drove one a absolutely hated it.  Road noise and finish made the car feel cheap vs the crosstrek which we also looked at.  I would highly recommend a Prius for it's efficiency, quality and reliability.  Ours is 12 years old and has not needed anything beyond oil and filter changes yet.  It's my primary mode of transportation to the ski areas in the winter with a second set of wheels and blizzak snow tires.  The other car to consider would be the Volt or a Leaf if your state offers rebates on those.

This was my experience with the Fit as well. We ended up choosing the Crosstrek, actually. A few years ago, so not the current model with the special drive features, etc. It's not the most frugal car...you can definitely find better MPG without AWD, better aerodynamics without the higher suspension, models with more history that you can get (more) used, Priuses. But dang if I don't love the cargo space (fit a full size futon mattress in there once, with 2 big suitcases), taking it on dinky dirt roads in the mountains/desert, the smoothness of CVT, that it depreciates at like $1k/year. And heated seats were standard... The people I've known with Subarus have driven them into the ground well after 200k mi, so I've high expectations of its reliability...