It is a good move because the car is inexpensive. You start to to worry if you go north of 25k.
Thanks man. I was kind of thinking the same.
I'd be hesitant to buy anything I need to finance.
I normally hate debt, but after looking into REI I've started to understand the value of leverage itself.
No way Jose! I never recommend taking on a car payment if you don't have to, and you definitely don't have to. If you're dead set on getting rid of the RX 350 (a very safe vehicle, by the way) for a high mpg vehicle, I'd get an '07 Prius, which you can get for around 8k from a range of dealers.
However, to be honest, I'd personally just fix up the Lexus. They're fancy Toyotas, and you should be able to drive that SUV to 300k if you take care of the transmission. And everything you listed that's wrong with it would still be much cheaper than buying a used Prius.
No desire for an equivalent model year Prius. I did try to talk the wife into a Honda Insight because we could come out of pocket for very little and no loan, but I think she really wants some certain features - leather and such. She's stuck on these things for some reason.
I got my 2006 Prius with 65,000 miles on it last year for about 10K. put another 1K into maintenance/repair so far (new tires, broken rear light) These cars should last till at least 250K.
If you get a 2007 or older Prius, you should be able to sell your Lexus and use the fund to buy a Prius without a loan, right?
If I could find something with mileage like yours I would be interested, but really we are hoping to find something newer for the ease of it being lower mileage and hopefully stick around longer with us.
But correct, I could sell the RX and get an older one without a loan. I could also achieve the same result with a newer Honda Insight.
Throwing in my $.02 I would recommend against a new vehicle especially if you're thinking about financing. I'm curious how you want very old, but are considering practically new at the same time. If you want a mid-90s and your wife wants new, see if you can compromise and get something in the early to mid-2000s. I don't know how much RX350 tires run, but the repairs you're listing (short of a transmission repair) aren't expensive. It certainly won't cost more than a new vehicle and not even a used vehicle in the price range you're looking at.
Fair comment on the curiosity... I just have an unexplained love for old Honda's. People want to win the lottery and buy luxury cars, not me... I want to win and buy tons of old Honda's (and other makes).
If the trans is slipping, you know it's going to go. If you do not want to end up rebuilding it, you had better make a move soon.
At a 60% (of what we do not know...) savings rate, why would you finance a car? Finance it internally by using your savings.
You say you do not drive everyday. Depending on how little you drive, the hybrid might not be worth it.
This is my biggest fear, honestly --- the transmission. The cd player doesn't scare me. I can replace that in a couple hours. I've already pulled it out and put it back during troubleshooting. The transmission --- I'm capable and have the tools to do a tranny replacement, but the cost of a Lexus transmission scares me. Also, the fact that my wife carts around our baby has me thinking differently than no kids me.
I drive once a week to work - 40 miles round trip in stop and go inner road traffic. Ideal for a hybrid, right? Other than that most of our driving is very local or 20 miles+. We also end up on a 1,000+ mile road trip once or twice a year it seems like... so something with better gas mileage is very appealing to me.
A slipping auto tranny is sometimes a sign of low fluid. Have you checked the fluid level? Is it even possible on your car?
Quick internet research tells me that the Lexus uses a "lifetime" fluid and never needs to be replaced. Lexus recommends against doing a tranny flush. Still doing a little more homework on this, but I'm sure it can still be changed. It's just fluid...
If the trans is slipping, you know it's going to go. If you do not want to end up rebuilding it, you had better make a move soon.
This. And replace it with the 88-95 Civic, ideally either a CRX HF or a '92-'95 Civic VX Hatch. The CRX would get MPG comparable to a Prius but be a heck of a lot cheaper. Just make sure to get a manual transmission and look long and hard to find one that hasn't been screwed up by a ricer yet.
I would give my left nut for a clean CRX HF or Civic VX. But I don't think my wife would be able to get the baby into a CRX. ;)
I'd get the new car. A loan with interest rate lower than inflation is fine IMO.
Thanks for the input. I'm still so unsure honestly. I was really hoping for a clear face punch or direction. I keep going back and forth with myself! haha
Get the tricked out Escalade. You know you want it!
Only if it's sitting on 28's.
Calculate your 5 year cost per mile for each of your options. Include all costs such as gas, insurance, registration, bumper stickers, and anticipated maintenance. This is a pretty easy spreadsheet to set up so you can compare side by side. Take the lowest number. If they are basically the same, take the on that will make you happy. The transaction costs of buying/selling may wipe out the "savings" of better gas mileage, even if not as emotionally satisfying.
lol @ bumper stickers.
Good idea on comparing the costs.
Tyres, alignment, brakes are all normal maintenance items.
The car's not exactly old either. I'd look at how much it would cost to fix the thing before making the fix or replace decision.
I mean, I can kind of see why one would want to finance if the interest rate of the loan is lower than the opportunity cost of the forgone savings, but do you really want to get stuck on the car payment treadmill again? :)
If you're set on replacing it, how about a 2007 era Corolla et al?
The wife wants some luxury, honestly. I feel like a properly loaded Prius is a good price point, good fuel economy, and she can have her leather seats.
Calculate your 5 year cost per mile for each of your options. Include all costs such as gas, insurance, registration, bumper stickers, and anticipated maintenance. This is a pretty easy spreadsheet to set up so you can compare side by side. Take the lowest number. If they are basically the same, take the on that will make you happy. The transaction costs of buying/selling may wipe out the "savings" of better gas mileage, even if not as emotionally satisfying.
Make sure you include a column for enjoy-ability. If you're the type of person who wants to check out on the road and drive an appliance, get the prius or civic. If you hope to have any shred of driving enjoyment, factor that into your calculus and determine how much you'll pay for it. How much is fun / comfort / [insert non MPG car attribute here] / etc worth to you per mile.
I enjoy driving. Does the Prius suck to drive? Haven't driven one yet. We were going to try and test drive some this weekend to see if we even really like them or not.
I'm struggling with the math - you listed normal maintenance item plus a decently costly repair. Why does that justify spending 11k to get a new car? a 2007 with 116k miles is starting to be broken in. You can drive that car for 250,000.
If you want a new car, that's a lifestyle choice. There's nothing beneficial financially to getting rid of this 2007.
I never made any claims that I would save money by doing this. I'm just debating the looming expenses. And yes, it's a lifestyle choice.
update, I guess? - We still haven't made a real choice. Every night we change our minds. We are just torn about what we really want, but we are leaning harder towards keeping the Lexus. My strongest desire to get rid of it is that it will only be worth less and less going forward. Her strongest desire to get rid of it is just to have something "newer" for the baby. I think we will most likely end up keeping it just because it is the better move financially.
Thanks for the input. I'll let you guys know what we end up deciding.
