Buying newer used car when I can afford it but my current car is still okay? Don't know what to do!

Parent Cafe
1

Hi All,

I’ve posted on here before about buying a newer used car, but I’d like to revisit the idea since some financials have changed.

To recap, I drive a 2001 Mercury Sable with about 133,000 miles on it. I’m the 2nd owner and have all maintenance records from the previous owner. I’ve owned the vehicle for 58 months now and have put approximately $2,300 into repairs ($500 of them made back in February when I had a pre-trip inspection and they fixed anything wrong with it). It runs great, but it’s rusting fairly badly on the quarter panels. I also need to buy new tires before the winter.

Here’s the situation: I just graduated college and will be moving 300 miles away for graduate school for a two year MA program. I don’t know where I’ll be after that (I’ll hopefully be pursuing a PhD, but I don’t know where), but once I’m at my new university, everything is within a few miles driving (and walking/bussing) distance and the major mileage will be traveling home for holidays/school breaks.

I talked to my grandma (who really wants me to get a new car), and she said she’ll give me $5,000 toward a newer one. I found a 2013 Ford Fusion with 25,000 miles on it for $14,900 (before taxes and such; I didn’t talk to the dealer yet, but I think I could get it for maybe $15,500 out the door), and I can contribute $5,000 of my own money to it and take out a loan for the rest (I have good credit). I checked out the insurance on it, too, and it would cost me an extra $250 or so a year. I COULD contribute more money for the down payment and take out a lesser loan, but I’ll only be making like $16,000 before taxes with my grad school stipend/tutoring, so I don’t want to complete deplete my nest egg since I might need it.

My car is fine for the moment, but I can’t possibly know how long it’ll last. I had it checked out and everything, but things happen so fast. Do I really want to break down on the highway somewhere? I have AAA Roadside assistance, but what if I’m left without a car? What would I do?

I’m really conflicted because I feel like I could go either way. The extra $5,000 from my grandma changes things and makes the newer used car more affordable, but I don’t want to get a newer car if the one I have will suffice (even for another half year or year). I also don’t want to burn through cash I might need in the future (grad students live notoriously poor lives!).

So, given my situation, what do you all suggest I do? I have another month and a half to decide, so it’s not an urgent matter. But, I still want to be smart about this.

Thank you!

2

Purely speaking as a parent giving advice if you were my child, if the current vehicle is safe for you to drive and is reliable, now is not the time to be taking on additional debt when you do not have to. The day will come when you will have to. Hopefully, that will be down the road a piece. If you are faced without a car, that is the time to purchase the newer used one. There will always be one for sale. Cargurus.com is a great place to find one. Also, don’t purchase from the corner used car lot. They purchase from auction what the used car dealerships can’t/won’t. Find your car from a dealership with used cars. When you are serious, spend the money on the carfax and autocheck. We found accidents on autocheck that carfax didn’t show. IF you use a corner used lot, have it checked out by an independent machanic (same if you buy from a personal sale). It is worth the extra money to find out any issues. Do not take anyone’s word for it. Good Luck.

3

It sounds like you’re tempted to buy a new car that you really don’t need, just because Grandma is offering some money. Why not ask her if that 5K can wait until you actually need a new car potentially many years from now). Is Grandma very wealthy, or is this money that she could use? And if she’s not wealthy, it doesn’t seem right to take money from her for something you really don’t need, just because she’s willing to give it to you.

4

Thank you very much for the responses!

To clarify: the Fusion in question is a certified pre-owned vehicle at a Ford dealership, and the $5,000 from my grandma was meant for my education but, since I had a full ride for undergrad/grad school, I didn’t need it (so she set the money aside for me, and she doesn’t need it).

5

http://usnews.rankingsandreviews.com/cars-trucks/Ford_Fusion/2013/Reliability/

I wouldn’t buy the 2013 fusion. Reliability issues.

Google is your friend when researching cars.

Congrats on graduating and moving on in your career!

You will get lots of different opinions just always go back to google. It’s a good time to upgrade your older car. I think you have the right idea. Before it needs work/ tires. Although your car looks pretty good on line.

Trying to get my son to turn in his 2006 Sonata. He thinks I am nuts because it has been an inexpensive workhorse for him.

Good luck.
Looks like your Sable is pretty reliable
http://www.edmunds.com/mercury/sable/2001/review/

http://www.cars.com/mercury/sable/2001/consumer-reviews/

6

A new car is not going to change your quality of life. Having a $5000 safety net in cash/ savings really could make a huge difference in your quality of life when unexpected expenses arise.

7

“A new car is not going to change your quality of life. Having a $5000 safety net in cash/ savings really could make a huge difference in your quality of life when unexpected expenses arise.”

This is so true! Especially since it sounds like soon, you’ll barely be using it. If Grandma doesn’t need the money and set it aside for you, do you feel comfortable taking it for an emergency fund? So many things can come up in life, medical, delays in getting employment, it goes on forever. Having that extra money could be wonderful if you need it. And eventually, you might need that other car.

Think about it, if for some reason you were gifted 5K from someone, for any use. Would you really partially deplete your nest egg and take out a loan for something you don’t need, and may barely use? 16K income is starvation wages, you may need that money just to not go in the hole.

8

The chances of a surprise breakdown are greatly reduced if you’re meticulous about maintenance. We’ve decided to keep my car until it dies, and that means a commitment to oil changes every 3K or less, and getting it in to see the mechanic every 15K or so. Worth it, IMO. I love not having a car payment.

9

My husband and I are both engineers. The only new cars we buy are SUVs, because we need reliable transportation on steep, unpaved roads in the Maine woods. Otherwise, we buy used cars until they are literally not drivable. It just makes the most sense economically. Today, we are putting $650 into our 2007 Ford Focus in order to get it to pass inspection. It’s a sad-looking car at this point, but that’s OK! It’s been good enough for our young adult drivers in the family.

10

Thing is, if you feel this car does run fine, for now, and you won’t depend on a car daily, you can always rent one for trips home. Adds up to much less than the purchase.

Many of us on CC do/did drive older cars. The $2300, in itself, isn’t a heavy warning sign (and that’s over a few years, right?, with only $500 now.) It’s more problematic when you have to budget that amount or more, per year. And that’s one reason I did trade in my '92 (my mother’s old car.) Whenever we made any longer trip, we rented…to be more sure.

11

Thanks, everyone… This all makes sense, and I guess I am leaning toward keeping it because having extra money around does seem to be wise.

However, as if in karma to asking this question, I did notice a quirk on my drive home from work that I want to get checked out (the idle speed seems high and my car accelerated a bit with my foot off the pedal).

Following up from that, what’s typically a reasonable amount to spend per year for repairs/maintenance? To date I’ve spent around $2300 (so, if you break it down over the almost 5 years I’ve had it, around $460 a year. This isn’t including oil changes, though). I’m still within reasonable maintenence costs, right? Unless something super, super major is up (transmission, engine, etc) that would cost a significant amount of the car’s worth, I should be good, right?

And how concerning is rust? I don’t care about the cosmetic aspect, but since my car has spent its 15 years of life in Michigan with harsh winters and the past 5 years on my dirt road, it’s accumulated a lot of rust (all along the quarter panels). It won’t be on dirt roads where I’m going (Ohio), but there still may be snowy winters down there (and it might be snowy with salted roads when I visit Michigan over the Christmas holidays). Is a car with increasing rust extremely dangerous in any way?

Thanks again for the insight! I appreciate it!

12

Rust is usually just cosmetic. Next time the car is in, you can ask them to see how extensive it is, but you seem to be describing an exterior condition. When car guys talk about rust, they’re often focusing on how difficult ( or impossible) it is to cure and cars that are much younger or, for some reason, treasures.

13

When you do start thinking about a good used car again in the future, have a nice long chat with any independent mechanic you happen to be acquainted with. Our trusty mechanic often has well-maintained used cars for sale that he can vouch for the conditions of.