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Discussion Starter · #1 ·
Okay, so my car has been making a rather disheartening rattle/vibration across the front axle whenever I hit a bump (inevitable on the roads of our city... pothole central!).

I brought it in to Subaru this morning for them to look at. They gave me a SUHWEET 2010 Subaru Forester to take as a loaner. It was very smart of them because I have fallen in love with this car!! (I usually get an Impreza loaner, like my car, and it's kinda meh).

So this is the dilemma. My Impreza wagon is a 2006 with 115,000 km on it. I am 4 payments away from paying it off. Huzzah!

It will cost me $1000 to fix my car (I need new struts, new stabilizer bar and an alignment).

My original plan was to keep this car, payment-free, and drive it into the ground, saving myself $500 a month in car payments.


BUT...

I have fallen in love with the Forester. My brother and SIL have one, and they LOVE theirs.

AND

Subaru has dropped their financing rates right now so I could finance a new Suby for 1.9% (4.9%-1% from Subaru Canada-1% from the dealer-1% for loyalty discount).

The payments on a brand new base Subaru Forester ($23,400) would be less than what I'm paying right now for my 2006 Impreza.

They also have a demo (2010 Forester Limited... totally loaded and $5000 more brand new than the base) with 8800 kms on it and I could get it for $27,000 (and save myself the freight and PDI that would be on a new car. Payments would be a smidgen more than what I'm paying now.


So here's the dilemma... do I:

1. fix my Suby, then own it, then buy a new one later this year (after a few months of having no car payments) even though the interest rates will have gone back up (probably to around 4.9%)

OR

2. take advantage of the low financing rates, save my $1000 and buy a new one now? And if so, which one?

OR

3. suck it up and just stick with my original plan of driving this Suby into the ground and THEN getting a new car, after enjoying a nice long time with no car payments??
 

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I think it is a question you need to answer while factoring in what else you might need to save that car payment for. Given the economy - many would choose option C and drive it into the ground. But if you have reliably steady employment, are not saving to buy a house and have bucks in the bank, then I'd go for the Forester now.
 

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I would go with 2 or 3. My husband is of the "pay it off quick, and then drive it into the ground" mentality, therefore we haven't had a car payment for over 4 years. It is awesome, but we will probably have to replace his car in the next year or so.
 

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This is not a hard decision. If you had not driven this other car, you would not even be thinking about it.

(1) Fix the car.
(2) Pay off the car.
(3) Open a separate account somewhere, and conitnue making your car payment to that account.
(4) When you have enough in that account to buy a car with cash, think about whether or not it makes sense to replace the car, or if it still gives you good service.
(5) Coninue making those car payments to your special car account either way. (PS: You are allowed to pay for repairs and maintenance from the special car account, but nothing else.)
 

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This is not a hard decision. If you had not driven this other car, you would not even be thinking about it.

(1) Fix the car.
(2) Pay off the car.
(3) Open a separate account somewhere, and conitnue making your car payment to that account.
(4) When you have enough in that account to buy a car with cash, think about whether or not it makes sense to replace the car, or if it still gives you good service.
(5) Coninue making those car payments to your special car account either way. (PS: You are allowed to pay for repairs and maintenance from the special car account, but nothing else.)
Like this one!
 

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Discussion Starter · #8 ·
Thanks everyone so far! :)

I should add that I don't NEED a new car (not like we're going to start a family any time soon... or ever lol)... however, the advantages I can see having a new car are:
1. bigger vehicle for the boyz (they would both be able to ride in crates which I like)
2. warranty!!!!

Should also add that this is the first car that I've had for more than 2.5 years. lol. Others I have grown tired of and have traded.

On the flip side, not having to pay $500 a month for car payments is a pretty nice idea. I could do as Ed suggested (awesome suggestion, Ed!), or sink that $500 into some of my other debts (not that I have a ton, but it would help pay them off faster).

My job is good and fairly steady, and no, not saving for a house or anything (in fact, no mortgage payment).

I know that the fiscally responsible thing would be to pay it off, apply the car payment money to my other debts, and then replace Suby when I have to (ie when repairs > value of the car) but I am torn!!
 

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115,000 kilometers is only 71,500 miles. That's barely "broken in" for a Subaru.

Fix it.

I agree with Ed.

Besides, in a few years there'll be some significant changes in gas economy, emissions, etc.

 

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Felicia,

What I suggested is not easy. It is amazing how fatal new car fever can be. DW and I have had it, and succumbed to it. We even tried a couple kinds of life support, and lost anyway. However, a long time ago in a land far, far away (that would be the mid 70s in New Jersey) we committed to each other to follow this path I outlined. It has worked very well for us ever since.

PS: I have also found out that I can get a better price once we have finished all our negotiations, have a price agreed to, and are about to start with the finance paperwork. At that point, I ask if I can get a better price if I pay cash on the spot. The answer is always, NO! You have the best price we can sell this car for. I then say to my wife, maybe we should check over at dealer x and see if they will offer us a better price for cash. This has always saved us something. Once, only $100, but several times it was closer to $1000. Better in my pocket than the dealers.
 

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C. Assuming there isn't something you really don't like about the current car, enjoy the no payments for awhile. It's a lot of money to stash away every month, whether you use it for a new car eventually, stash it in a retirement account or pay down debt.

Even a few months wait after it's paid off would give you a sizeable down payment if you buy a new one and I can't believe that there won't be more low interest deals around in the next year or two; the economy isn't getting better that fast.
 

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I don't think you can make a solid financial argument for buying a new car. You can line up all kinds of reasons to buy one - warranty, more room for dogs.....These are "justifications" to help you talk yourself into buying a new car.

Now if you want a new car because you want a new car, and can afford it go ahead an buy it. You don't have to convince yourself it is a good move financially or otherwise.

We have 3 cars all purchased new.

a 2001 convertible with 35,000 miles, that we can't really justify other than it is fun
a 2003 small suv
and a 2007 small sedan

When we bought my wife's car (2007) she kept saying - better gas mileage, warranty, and every other reason she could think of to convince me it was smart to get her a new car. Finally, I said look - none of those arguments are real. If yo tell me you want one because you want one fine, buy one because you want one.
 

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I'm with Maple on this one, Felicia.

If you've fallen in love with the loaner, and that's what you want, get one. There are ALWAYS very good reasons to NOT do something irrational - like fall in love. But we don't always do the rational thing. So you don't have to justify it, even if it might not be the most prudent thing to do.

Hell, I paid off my Mini. My father (in league with my husband) surprised me for my 40th by having the rally lights installed on it that I'd always wanted but couldn't justify. I loved that car like a person, never had any complaints, problems, etc. I was seriously attached. But 8 months later when the right used 911 convertible came up? I traded it in, took on new car payments, and didn't look back. Irrational? Hell yes. Justifiable? Probably not. Regret it? Hell no!
 

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I have to weigh in on this one: and I agree 1000% with Ed's sound advice.

In fact since 1980 we have bought a new car every 12 years (weather we needed it or not, heh, heh, heh,) for CA$H. And we too, without car payments were able to save much more than enough to pay for maintenance and the new car.

'80 Chev Citation - Bud's feed store and farm stuff 'fetching car'
'92 Saturn LS - 1 new set of tires 4 years ago, and I would get in and go across country in it today.
2005 Chev Malibu - our STILL NEW CAR !!
 

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The "sensible " thing to do is pay off your car and drive it into the ground - that is what we do with our cars. HOWEVER - you can always do that with the new Subaru Forester that I think you should get now! :)
 

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LOL! I wish I could justify having ANY car even a hyundai (or my fav right now the Yaris) ;) I have trouble justifying even $300 payments so go with what the others say ;) BUT maybe sit on it for at least a week so it isn't completely a "spur of the moment" decision.
 

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I'm of no help. I say get the Limited Forrester and enjoy the upgrades and more room for the boys. But, then again, that's just me.

Fiscally responsible - schmiscally responsible. ;-)
 
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