Author Topic: Car choice dilema  (Read 4462 times)

FiguringItOut

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Car choice dilema
« on: October 13, 2014, 10:04:12 AM »
I want to tell you my car(s) saga and get some perspective on what I should consider for my car in the future.  Beware of a lot of stupid decisions below.  You can also skip to "6th car" below and everything else before it just a back story of bad decisions which is no longer relevant.

Husband and I have had numerous cars over the years and I feel that none of them turned out to be good purchases in the end.  Now, that I am looking at divorce and needing a reliable transportation for myself and my two kids, I donít know what to do.

Car history:

1st car: used SUV purchased for $5,000 cash.  I think it was one of the older Nissanís but Iím not sure at this point.  It was a long time ago.  This car was stolen about 5 months after we purchased it.  Police found it two weeks later taken apart for parts.  We got $4,000 back from insurance company and purchased

2nd car: it was a $5,000 used sedan.  I canít even remember the make of the car.  But, I liked that car very much.  We had it for few years and fully intended to drive it till it fell apart, but we were hit while on a long weekend trip and the car was totaled.  We got $4,000 back from insurance company, but at this point needed car fast, no cash reserves, and somehow we ended up with

3rd car: leased 2005 Altima.  I liked the car but hated the lease.  Was counting months till I could get rid of this thing; probably my worst car owning experience ever.  Anyway, this was over and in 2007 we went and purchased

4th car: 2002 Honda Odyssey.  This was a cash purchase, but I donít remember how much we paid for it, probably somewhere in the teens.  Once again, I was happy with the car.  It was good since we now had two kids and did a lot of weekend trips.  In 2008, we moved from city to burbs and needed a second car, so we got

5th car: 1999 Ford Taurus for $3,000 cash.  We needed something cheap, but reliable for our nanny to drive kids around between school and afterschool activities.  Over the years weíve put a fair amount of money into this Taurus keeping it running. 

So between 2008 and 2011 we have two cars, the 2002 Odyssey and 1999 Taurus.  In 2011 the transmission on the 2002 Odyssey goes, the repair tag we were quoted is north of $3,000 and we decide to get a new minivan.  So we went and purchased

6th car: 2009 Honda Odyssey.  We paid around $20K cash for this thing.  We still have it.  However, it is fairly beat up by now, both front and back bumpers are dented on all corners, huge scratch across one side of the car, some other minor dents and whatnot.  Plus, the car has been making a noise related to transmission that nobody can identify and fix.  Weíve had several people look at it, including Honda people, and they canít figure it out.  According to Kelley Blue Book this car is worth about $9,000 now, may be less due to the transmission noise.

A year ago, our 1999 Taurus was starting to act up a lot.  We tried to keep it alive for a while longer, but at some point mechanics started to laugh at us and were suggesting to not bother fixing it.  In November 2013 we had about $3,000 worth of work that was required on it including the fact that heat was not working in the car anymore and with our winters and this car mainly used for kids.  The car no longer felt safe and we decided that car had to go.  The best part of this was that we had absolutely no cash to buy another car.  Husband was trying to convince to me get a lease, which I refused, but somehow agreed to get a new car with a car loan.  So right now, we are proud owners of

7th car: 2014 Hyundai Elantra.  We put $2,000 down and took a loan for remaining $19,000 at 1.9%.  The payment is $316 per month.  I like the car, I hate the loan, and I am not going to pay it off right now.  Will explain below.  Right now Blue Book on this car is $13,500 and we still have about $13,800 on the loan left. 

Anyway, here is my dilemma.  In about 8 months we husband and I will need to divide these two cars that we right now have (cars #6 and #7).  One is aging Odyssey with unidentifiable transmission sounds and many dents.  The other one is fairly new Elantra with still $11,000+ left on the $316/month loan and no equity to speak of. 

I have 4 questions:

1)   I have reservations with both cars.  Iím concerned that transmission on Odyssey may go again, like on the previous Odyssey we had.  I will be alone supporting myself and two kids, working full time and barely have any cash reserves to deal with the car issues. With Elantra, Iíd be stuck with the loan and monthly payment, but would have a better piece of mind about the reliability of the car.  I donít know what would be the better option.

2)   Also, right now, both cars are registered in husbandís name, and the loan is his name as well.  What would be involved in reregistering one of the cars in my name?  Would I need to refinance the loan if I end up with Elantra?  Are there any additional costs involved in this?

3)   Insurance has always been in husbandís name as well.  I was always listed as a second driver.  Would the fact that Iíve never ďcarriedĒ an insurance increase my insurance premiums next year when I have to insure the car myself?  Right now we are paying $1,000 every six months on both cars, the cheapest rate we could find.  This includes adding our nanny to the insurance (there will be no nanny next year). Husband uses one car to commute to work, about 30+ min drive.  I will be using the car to commute to the train station (about 7 to 15 min drive depending on where I will live) plus weekend driving (this will include driving kids to activities, grocery shopping, visiting friends anywhere from 10 to 30 miles away, plus occasional weekend trips 2 to 4 hours away).  I think this should decrease the rate some, but Iím not sure. 

4)   In terms of what to do for car next year, is there another option that you could suggest that would not require huge cash outlay and will result in reliable car for me and kids.

You can smack me upsidedown, but the reality is, I will need a car and I don't know what would be the best option. 

Forcus

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Re: Car choice dilema
« Reply #1 on: October 13, 2014, 10:35:50 AM »
Easy answer to me is the Odyssey. Since you are going through a divorce everything has to be negotiated (I assume), fair market value assigned, so if you are able:

2009 Odyssey: $9,000 market value (or whatever it is - sounds like fair condition at best)
- potential transmission issue of $3,000
= $6,000 value

Yes you won't have the cash to fix right away but for a 7-15 minute drive I'd roll the dice. The weekend trips are "optional" so to me those don't count like the critical nature of getting to the train station. Plus the Odyssey is already beat up, no need to worry about such things as car washes, details, etc. and it sound like it will only get more beat up parking around where you will end up living, so why have something nice?

Sid Hoffman

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Re: Car choice dilema
« Reply #2 on: October 13, 2014, 10:49:17 AM »
I've been a huge car enthusiast for many years now, especially with compact cars and in fact I've had two Elantras myself, a 2002 and 2006 model with about 200,000 miles between the two of them.  In short, I do not like anything on that list of cars.  The early Odyssey was known for transmission problems and although that should have been resolved at the manufacturing level by 2009, I would still avoid that van like it has mold, especially if the transmission is whining.  I like Elantras, but you do not need a brand new car like that.  I too have been through divorce and from everything I experienced, whoever has their name on the loan for something is the person who needs to deal with it.  I would dump both the Elantra and Odyssey on your husband and take neither.

Basically I would be looking for some kind of certified used car in the $15k range.  When I saw your location as NYC, I basically abandoned all hope of suggesting something to you that you can keep for 10 years.  The location and your experience with lots of accidents and talk of cars being all bashed in makes me suspect your best course of action is just something reliable without spending too much.  I love the idea of a certified used Prius, but as I've also owned a Prius, the rear 3/4 visibility for things like parallel parking is terrible on those cars.  No big deal in the southwest, but I would consider it a deal breaker in NYC.

I like the idea of a compact hatchback like a used Honda Fit, maybe one purchased either through Honda's Certified Pre-Owned program or through Carmax with Carmax's extended warranty.  A quick look online shows you could likely get in one of those for $12k or so, which is a good savings over the $16k+ you'd pay for a brand new one.  They are small, so they should be good for NYC parking and less likely to get hit while parked at the train station since they are so short, and thus your car will be much further into its space.  The hatch means good luggage options, especially during times when you can fold down one or both sides of the back seats.  They have good safety ratings for their size too, although not as good as a full size sedan.  Of course a full size sedan means more likely to get bashed up in NYC, worse gas mileage, etc.

IMHO, you don't sound like someone that wants a car you can work on yourself or that you'll have flexibility to have your car down for repairs for a few days.  For that reason, I would stay away from anything more than about 5 or 6 years old and I would specifically seek out something CPO (Certified Pre-Owned) or do a Carmax car with their extended warranty.  $12-13k should be enough to get you in something safe, reliable, and with decent fuel economy.  I simply would never buy a nice car if I lived anywhere near NYC, the climate and other factors are just brutal on car ownership.

As for insurance, I don't think you'll have any trouble.  My ex-wife had been listed as a secondary on my insurance policy for over 6 years and she had no trouble getting insurance quotes with excellent rates.

FiguringItOut

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Re: Car choice dilema
« Reply #3 on: October 13, 2014, 11:16:00 AM »
I've been a huge car enthusiast for many years now, especially with compact cars and in fact I've had two Elantras myself, a 2002 and 2006 model with about 200,000 miles between the two of them.  In short, I do not like anything on that list of cars.  The early Odyssey was known for transmission problems and although that should have been resolved at the manufacturing level by 2009, I would still avoid that van like it has mold, especially if the transmission is whining.  I like Elantras, but you do not need a brand new car like that.  I too have been through divorce and from everything I experienced, whoever has their name on the loan for something is the person who needs to deal with it.  I would dump both the Elantra and Odyssey on your husband and take neither.

Thank you.  This first paragraph basically summs up how I feel.  I don't like neither option just as you pointed out.  I am not trying to get a new car here, as I don't care about the age and prettyness factor.  I do care about realiability and longivity of the potential car.  Plus, the mpg the car uses.  Elantra is so much better on the gas usage then Odyssey. 

Quote

Basically I would be looking for some kind of certified used car in the $15k range.  When I saw your location as NYC, I basically abandoned all hope of suggesting something to you that you can keep for 10 years.  The location and your experience with lots of accidents and talk of cars being all bashed in makes me suspect your best course of action is just something reliable without spending too much.  I love the idea of a certified used Prius, but as I've also owned a Prius, the rear 3/4 visibility for things like parallel parking is terrible on those cars.  No big deal in the southwest, but I would consider it a deal breaker in NYC.

I'm not in NYC, but I am in close suburs.  Driving localy, pararell parking is not an issues, thus I would consider looking at Prius, expecially for the mpg factor. 


Quote
I like the idea of a compact hatchback like a used Honda Fit, maybe one purchased either through Honda's Certified Pre-Owned program or through Carmax with Carmax's extended warranty.  A quick look online shows you could likely get in one of those for $12k or so, which is a good savings over the $16k+ you'd pay for a brand new one.  They are small, so they should be good for NYC parking and less likely to get hit while parked at the train station since they are so short, and thus your car will be much further into its space.  The hatch means good luggage options, especially during times when you can fold down one or both sides of the back seats.  They have good safety ratings for their size too, although not as good as a full size sedan.  Of course a full size sedan means more likely to get bashed up in NYC, worse gas mileage, etc.

IMHO, you don't sound like someone that wants a car you can work on yourself or that you'll have flexibility to have your car down for repairs for a few days.  For that reason, I would stay away from anything more than about 5 or 6 years old and I would specifically seek out something CPO (Certified Pre-Owned) or do a Carmax car with their extended warranty.  $12-13k should be enough to get you in something safe, reliable, and with decent fuel economy.  I simply would never buy a nice car if I lived anywhere near NYC, the climate and other factors are just brutal on car ownership.

As for insurance, I don't think you'll have any trouble.  My ex-wife had been listed as a secondary on my insurance policy for over 6 years and she had no trouble getting insurance quotes with excellent rates.

Here is a thought.  Once I move out, I will not have much cash reserve left, if any at all.  I will be building from scratch with barely a few thousand I will keep in the emergcy fund.  Given this, looking at $10-15K car doesn't seem realistic, unless I buy used car with a car loan.  In that case, should I consider just keeping the Entra then instead of trying to sell and then bying something else?  I could potentially try to negotiate with husband where as he would keep the loan and I would pay it down, as I know he doesn't want to be stuck with the loan either.  Then we could just reregister Entra in my name and I will cary the insurance on it.

You are right in that I am not going to be working on car myself and do need to be able to get myself to the train stations, to kids activities, etc. 

What you wrote makes sense to me, I am just trying to figure out the lease painful way to get there. 

Forcus, I was never the one to worry about car washes, details, etc.  We do get a lot of minor fenders around here, especially at various parking lots.  The huge scrat on the Odyssey happened while the car was parked at husband's office parking lot.
 
You are right that weekend trips are optional.  Hoever, not being able to get to the train station or to kids activities or grocery shopping is a huge concern to me with Odyssey.

Forcus

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Re: Car choice dilema
« Reply #4 on: October 13, 2014, 12:29:20 PM »

Forcus, You are right that weekend trips are optional.  Hoever, not being able to get to the train station or to kids activities or grocery shopping is a huge concern to me with Odyssey.

Don't get me wrong, I wouldn't be 100% comfortable with the Odyssey either, and don't believe it to be the best choice, but what you highlighted to the last poster was you are highly loan adverse, yet won't have any short term cash savings, thus my opinion. That combined with the short commute (and if something did happen with the transmission, somewhat muted effect) formulated my answer.

So your choices are leverage what you have or get a loan. Discarding the loan, I picked the Odyssey.

If you can somehow stomach a loan, knowing your income stream is safe, and dispose of the Odyssey without taking a bath (or simply not taking it period), that would probably be an overall better choice, notwithstanding MMM stance on car loans. The Elantra is not a half bad choice in this instance, and it's not like you are horribly upside down on it like most people would be.

FiguringItOut

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Re: Car choice dilema
« Reply #5 on: October 13, 2014, 01:50:11 PM »

Don't get me wrong, I wouldn't be 100% comfortable with the Odyssey either, and don't believe it to be the best choice, but what you highlighted to the last poster was you are highly loan adverse, yet won't have any short term cash savings, thus my opinion. That combined with the short commute (and if something did happen with the transmission, somewhat muted effect) formulated my answer.

So your choices are leverage what you have or get a loan. Discarding the loan, I picked the Odyssey.

If you can somehow stomach a loan, knowing your income stream is safe, and dispose of the Odyssey without taking a bath (or simply not taking it period), that would probably be an overall better choice, notwithstanding MMM stance on car loans. The Elantra is not a half bad choice in this instance, and it's not like you are horribly upside down on it like most people would be.

Yes.  This adds more food for thought to me.  I am debt adverse, however, I am thinking that I may not be able to avoid it entirely.  I will need to crunch more numbers and figure out if keeping Elantra makes sense to me.  If something happens to Odyssey, I'll have to use credit cards to fix it and that is a lot more than 1.9% interest on Elantra loan.  Plus, I've been in CC debt spiral before, and really do not want to go there again.


Sid Hoffman

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Re: Car choice dilema
« Reply #6 on: October 13, 2014, 04:21:37 PM »
I'm not in NYC, but I am in close suburbs.  Driving locally, parallel parking is not an issues, thus I would consider looking at Prius, especially for the mpg factor. 

Here is a thought.  Once I move out, I will not have much cash reserve left, if any at all.  I will be building from scratch with barely a few thousand I will keep in the emergency fund.  Given this, looking at $10-15K car doesn't seem realistic, unless I buy used car with a car loan.  In that case, should I consider just keeping the Elantra then instead of trying to sell and then buying something else?  I could potentially try to negotiate with husband where as he would keep the loan and I would pay it down, as I know he doesn't want to be stuck with the loan either.  Then we could just reregister Elantra in my name and I will carry the insurance on it.

So on the Prius front, I went over to ToyotaCertified.com and did a search within 100 miles of west Long Island for a 2010+ Prius, priced under $15k.  It turned up 6 results, one of which was a 2010 model in white with 81,000 miles for $13,992 in NJ.  With $0 down on a 5-year loan at their best rate (if you qualify) it works out to $251/month.  As you may know, it's always possible you could negotiate a better price than what they have listed on the website, in fact used cars occasionally have quite a lot of room for negotiation.  This one may or may not, since I already cherry-picked just about the cheapest 2010+ Prius in the entire region.  So call that option something of a "maybe".

On the other hand, your Elantra is nearly new and only $50/month more expensive and Hyundai's do have that 100k mile powertrain warranty, which is nice.  Call up the loan servicer for the car and ask them what's needed to put the loan in your name.  In some cases they will pitch a fit and refuse to do it, or do it but only with a new loan origination fee and at a higher interest rate.  Call and find out, unless you think your husband will want the Elantra badly enough to fight you for it.  Nothing is really settled until it's settled.  At least find out what it would take to transfer title & loan.  Actually the title part is usually easy, the loan is generally the holdup so I would call now and find out what it takes.

Also, do you have any kind of financial counseling as part of the divorce?  Mine was pretty clean since we owned so little and the stakes were pretty low for both of us.  In your case, having a couple kids you need to transport and regular daily commute, it's possibly going to be a bit more work to get everything unraveled cleanly.

FiguringItOut

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Re: Car choice dilema
« Reply #7 on: October 14, 2014, 06:29:13 AM »
Thank you all. This put new perspective on the whole Elantra situation. 
It was very helpful
Thank you