Hi - Have been trying to figure this one out on my own using an Excel spreadsheet, but am failing. Here's my situation:
Just got back from an overseas assignment. Living in Washington, D.C. where gas is about $3.75/gallon. Will be commuting about 15 miles each way. Before suggesting that I bike, it's just not feasible for me. I'm a single mom, I need access to a car during the day for emergencies, and I work an odd schedule. I would not feel comfortable biking at 11 p.m. Plus, driving cuts my commute time in half vice taking the metro. That's time I can spend with my kids.
Currently own a 2003 Honda Pilot with 91,000 miles on it. Mechanically still fine, got banged up a bit overseas. It needs some of the big maintenance work done on it -- typically done at 80K I think. The car is paid off, estimate the value on KBB is about $5600. My guess is it probably needs 2K of work done on it. It needs new tires too.
I'm contemplating trading it in and purchasing a Prius, probably a 2010 or newer.
Either car will be sold once I head overseas again, possible as early as 12 months from now.
Question is: Do I hold on to the Pilot, put money into it and expend more in gas, or do I trade it in for a newer car that I'll finance and then sell, again as early as 12 months from now, but possibly not for four years?
I'd really appreciate the help if anyone has advice on how to proceed.
Another question: I do have the money in savings to pay for a newer car cash and not finance. In the scenario where I'll be selling the car in 12-48 months, would it make sense to just leave the cash in savings and accept the finance charges?