So, we did something not so smart......
My wife got rear-ended three weeks ago and her car got "totaled". We received a check from the other guy's insurance for $15,700 for her 2009 Toyota Camry which we recently paid off. The original, smarter thought was to use the $15k for a 2-3 year old car with decent mileage and hopefully get something for $12k or under.
However, after looking at vehicles and test driving a few different models, we opted to buy a new 2013 Subaru Impreza hatchback. Don't get me wrong, it's a nice vehicle and will be great for our family and we plan on keeping it FOREVER, but I'm definitely feeling some buyer remorse. I still drive my 2004 VW Jetta with 130k miles on it and plan to drive it until the wheels fall off. Her newer 2009 Camry was supposed to be the car that lasted forever, since my Jetta could crap out any day. Obviously, accidents happen....but, buying a new car wasn't necessarily top of mind.
We got the new car for $20k. We put down $5k and are financing just over $16k (taxes, etc.) at 1.6% for 36 months. Obviously, this was not the original decision or the best financial thing we've done. Would it be sensible to just make the monthly payments for $480 over next 3 years becuase it's a decent rate and then just invest the other $10k remaining? Or should we put a significant portion ($10k) towards the vehicle to shorten the payment cycle?
Let me know your thoughts. Thanks in advance!