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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Tundra_Man on January 07, 2016, 09:43:43 AM

Title: Is This Enough Of A Deal To Warrant Replacing A Current Car?
Post by: Tundra_Man on January 07, 2016, 09:43:43 AM
I wanted to throw this out to my fellow Mustachians to get their opinion on my situation. General google searches of "How To Know When To Replace A Car" provide advice from people who don't necessarily share the same financial mindset as those of us on this forum.

My wife drives a 2002 Saturn SL. We've owned it since new and it has been paid off for nearly 8 years. It currently has 90k miles on it. The car never has been overly reliable. It seems like something has always been broken on this heap, but because it's generally cheaper to fix a car than replace it I've always just repaired the thing. I hate this car, and have since shortly after we bought it. My wife isn't fond of it, but doesn't have the level of annoyance with it that I do (mainly because she'd not laying underneath the thing when it breaks.)

This Saturn started burning oil at 20k miles and runs through a quart every 300-500 miles. Apparently this is a common problem with these Saturn engines due to a design flaw. It never has held an alignment for more than a few hundred miles, which means it eats tires. We're on our 4th set. The gas mileage has been less than stellar averaging around 20 mpg in the city, which is where this car logs 95% of its miles. Over the years I've probably sunk at least $5k into repairs on this car above the initial purchase price.

Knowing that cars don't last forever, for the last few years I've been making monthly "car payments" to myself into a fund that would allow me to purchase a replacement in cash whenever the time comes. I figured we would drive the Saturn until it finally gives up the ghost and has a mechanical failure so extreme it would be obvious it's not worth fixing it. In preparation for this inevitable day, I was thinking that a Toyota Prius would be a good fit as a replacement for my wife's car. She mainly drives to work and back, transports our son to his various activities and runs errands. I ride my bicycle to work year-round. My wife does not and will not ride her bike, and after 22 years of marriage I realize she's not going to budge on this one, so the option of "no car" isn't going to happen. :)

Yesterday I ran into a friend of mine who is a mechanic. His brother recently passed away and my friend is working on settling the estate. His brother had a 2014 Prius Five with 8k miles on it. My friend has gone through the car and said it's in excellent shape. He said he's not interested in making any money on the car and just to quickly be done with dealing with it he would be willing to sell it to me for the balance due on the loan, which is $16k. Looking up the book values and other Priuses for sale leads me to believe this is a pretty good deal as the car is worth between 20-22k.

So, I'm now in a pickle. Our Saturn is still running and I hadn't yet intended to replace it, however I don't know how much longer this car is going to last before something major goes out. This Prius seems like a really good deal, but I'm not sure I want to spend $16k on a car. That seems like a lot of money (never spent over $10k on one before.) I do have the cash so there wouldn't be any financing. My intentions would be to drive the Prius until the wheels fall off like we did the Saturn, so maybe $16k isn't that bad for a vehicle we should be able to drive for at least 15 years?

Sorry for the novel, but I wanted to communicate as much relevant information as possible. What do you think? Should I go ahead and jump on this Prius now, or should I wait until the Saturn completely dies knowing the odds are low I'll be able to find a comparable deal down the road? Thanks in advance for any thoughts or ideas you may have!
Title: Re: Is This Enough Of A Deal To Warrant Replacing A Current Car?
Post by: JZinCO on January 07, 2016, 09:46:38 AM
Consider your dilemma as two separate problems. First, is it time to replace the saturn? Second, do you want to spend as much as the prius costs on a replacement car?
Unless you plan on flipping the prius, don't let the existence of a 'deal' color the answers of either question.

edit: The consideration of a deal comes in only until you have answered in the affirmative of both questions. That's when you would consider purchase prices and values of that car and other cars in the price range.
Title: Re: Is This Enough Of A Deal To Warrant Replacing A Current Car?
Post by: olivia on January 07, 2016, 10:03:29 AM
I would definitely get the Prius, provided you can afford to do so. That is a killer price and your wife can drive that car forever.  I have a 2014 Prius III and absolutely love it.  I had also never spent more than $10k on a car but I have no regrets and plan to drive this until the wheels fall off. 

(I'm not a car person at all and never have been, so I will actually do this, and it sounds like your wife will too.)  I also owned a Saturn previously and it was a pile of crap, so I realize I'm completely biased.  But I absolutely love not wasting time trying to fix a car that's crappy to begin with.
Title: Re: Is This Enough Of A Deal To Warrant Replacing A Current Car?
Post by: lbmustache on January 07, 2016, 12:16:33 PM
Get the Prius. Financially you sound fine and by now it's a 2-3yr old car so has taken a depreciation hit. Sell the Saturn for whatever you can get and go to bed knowing you have a nicer car that isn't falling apart.
Title: Re: Is This Enough Of A Deal To Warrant Replacing A Current Car?
Post by: Cassie on January 07, 2016, 12:24:39 PM
We recently had a similar situation and in the end decided to sell the old car and buy the newer one. It was a deal and a year later we are not sorry.
Title: Re: Is This Enough Of A Deal To Warrant Replacing A Current Car?
Post by: JZinCO on January 07, 2016, 09:27:43 PM
If it wasn't and you would consider other vehicles, I would point towards a Mitsubishi Mirage hatchback. I hear the radio commercials everyday selling those for $9999. Not sure exactly what's involved with the pricing, but Mitsubishi's site shows the msrp at $13k, so there may be rebates.
Yeah, Mitsubishi's had very poor success with the Mirage outside of Japan (poor steering, the 74 hp is crazy loud for its size, clunky handling, alot of body roll). So silver lining. Mitsubishi will do anything to push it off the lot.
Title: Re: Is This Enough Of A Deal To Warrant Replacing A Current Car?
Post by: forestj on January 07, 2016, 10:31:54 PM
I have the same car, only I bought mine for $2700 at 180k miles. It worked, got great mileage (like, 30 and 40 mpg) and it still runs, although it has everything wrong with it.  I plan on driving it until it goes no more, not investing much in fixing it, and then selling it for parts / scrap.
Title: Re: Is This Enough Of A Deal To Warrant Replacing A Current Car?
Post by: Tundra_Man on January 08, 2016, 08:30:18 AM
Thanks everyone for the responses so far. They've been helpful.

@JZinCO: That's an interesting point. Considering it as two separate questions does give me a different way to look at it. Unfortunately the answer to both of them is "maybe." The Saturn is still running and doing what we need it to do, but it is showing enough signs that it's nearing end of life that it got me thinking about replacing it in the first place. Do I want to spend $16k on a replacement car? No (does anyone?) but I may have to accept that to get what I want (model, year, mileage, etc.) that I may have to accept that cars are now more expensive than they were 14 years ago when I bought the Saturn.

@craiglepaige: Yes, I was considering a Prius as a replacement before this deal came along. My wife's car is primarily used in the city and the Prius city MPG would be easily twice what the Saturn gets. Also, we regularly have to transport my son's string bass (they're huge), and it won't fit inside the Saturn in any way, shape or form. So on those days we have to drive my truck. It would fit inside a hatchback Prius, however, with the seats folded down.

@forestj: Not sure I want to go the Mirage route. From the reliability and performance it sounds like I'd just be getting into a similar situation that I'm in with the Saturn.

From the other comments it seems that I'm not wrong thinking this particular Prius is a good price compared to what other similar Priuses are selling for. I'm not in any hurry to rush this decision, so I'm going to chew on it a little more. Was thinking about going and driving it later today, but we're getting a lot of snow and I'll probably be spending my after-work time shoveling. :)
Title: Re: Is This Enough Of A Deal To Warrant Replacing A Current Car?
Post by: Thegoblinchief on January 08, 2016, 10:35:25 AM
What's been your 5 year cost of ownership for this car? Add an approximate 5 year prediction into the future with a cheaper replacement vehicle as a base.

Compare that to the 16K purchase price, plus basic maintenance figures, slightly higher insurance,etc. over 5 years for the Prius.

Is the first scenario less expensive? Probably. Is it an amount of money that's significant enough to justify the hassles of arranging alternate transportation during repairs, plus a more involved future search for a replacement (probably won't get such an obvious deal hitting you in the face and will have to look for it)? Only you can decide that.

I'd guess over the long term you're probably looking at a total cost of ownership difference of a few thousand.
Title: Re: Is This Enough Of A Deal To Warrant Replacing A Current Car?
Post by: soupcxan on January 08, 2016, 11:49:50 AM
I would replace the 2002 Saturn with the 2014 Prius V for the improved safety alone given that your wife and son are in it a lot. All of the other benefits are just icing on the cake.

After 14 years you have gotten your money's worth out of the Saturn...time to move on.
Title: Re: Is This Enough Of A Deal To Warrant Replacing A Current Car?
Post by: Tester on January 08, 2016, 02:08:26 PM
The first question: should you get rid of the Saturn?
Well, reading what you wrote about it, it is not a working car for me. Constantly topping the oil??? What if you forget to do it and the engine breaks?
The alignment not being correct - consuming tires??? What does this do to the safety of the car?
My idea of a car is (and keep in mind I am not commuting by car): it has to work correctly. I have to be confident driving it. I don't want to constantly think about how to keep it running. I don't think this one does any of them.
EDIT: not to mention the costs of topping the oil or changing the tires.

Regarding buying the Prius: it is more expensive than you planned to buy. It is a good deal (or at least it seems like it).
So here I don't know what to do.