Should I buy a car right now?

July 22, 2009 7:07 PM

Weighing the pros and cons of buying a car in the near future. Should I? (And if so, what should I get?)

I have a 2002 Ford Focus with about 85,000 miles which was purchased used in 2003 and and paid off last year. My mom bought the car and the loan was in her name because I was in college at the time, but as soon as I graduated I started making the payments myself (still in her name). When it was paid off she transferred the title to me. On the way to the auto tag place, the car started doing this weird shaking thing and stalled out. I had that issue fixed, but it seems like ever since that day, little problems have cropped up every few months that involved replacing a worn out or broken something-or-other. If I'm going to trade in the car, I'd rather do it while it's still in relatively good shape, before something major happens to it.

Arguments for buying a car:
- It's probably an awesome time (economically) to buy a car.
- The end of the model year is coming up.
- Kelley Blue Book says I can expect to get a trade-in value of $2000+.
- I have a bit of money saved up, and could make a decent down-payment.
- My credit score is over 720.
- I can get a vehicle loan from my credit union at 3.99% APR for 1-24 months or 4.99% APR for 25-60 months.

Arguments against buying a car:
- My current car isn't really that old or in too bad shape.
- It sure is nice not having that $200 payment every month.
- Even though my credit score is good, I have very little history. My current car was paid in my mother's name, and my husband's name is the only one on the mortgage for our house. The only credit things I have in my name are a credit card (paid in full every month) and my student loan (small).
- My company is getting bought by another company, and even though nobody knows what's going to happen in the future, I could possibly be laid off in the next 3 months-2 years.

Sub-question: For years I've been saying my next car would be a hybrid, but now that I'm really looking into them, I don't know if the increase in price is worth the potential savings in gas. Then again, I'm all for saving the environment. But I hate losing trunk space to a battery. Any opinions on getting a hybrid vs. just getting a newer Focus? (Also, Ford is currently offering a $1500 rebate of some sort, but it looks like that deal is ending August 3...)

posted by LolaGeek to work & money (9 comments total)

The best course of action would be to find a good mechanic and hang onto your car. You're going to save a HUGE ton of money by not having a car payment and, unless we're talking about an engine or transmission, there's almost nothing so expensive on that Focus that it'll break the bank when it needs to be replaced.
Your 2.0 liter Focus gets what, around 25-30mpg? Given that your monthly payment on that car is $0 and a payment on a hybrid would be something like $300, the hybrid would have to save you $300 in gas each month to be worth while.
It's not like your Focus is some smog-belching gas guzzler. It's a clean, economical, late model emissions friendly car.
While hybrids are cool, if you do mostly highway driving, a new clean diesel will suit you better. And you won't have to give up your trunk space.
Stack up your papers for a little while longer and go shopping again in a year or two. Make a little new-car fund and pay yourself $150 each month for driving your Focus. Even if you wind up driving this car until it's no longer in trade-in-worthy shape, you'll have saved an amount of money that exceeds its trade in value anyway. It's worth $2000 in trade in now? Ten months of not having a big ol' car payment will add up to much more than that. No matter what repairs might crop up, driving your current car is like money in the bank.
posted by Jon-o at 7:40 PM on July 22 [3 favorites]

Repeat after me: Cars require regular maintenance.

The best thing that ever happened to new car manufacturers was the decline in folks who are willing/able to do their own repairs, or even understand what is going on with the machines that they own. This helps lead to the fearful "trade it in before something goes wrong" mindset that makes people buy new cars.

It drives me crazy to hear people describe their cars as "crap" or "dying" when they are really just dealing with normal mechanical wear and tear. (not saying this is you at the moment)

Your absolute best plan is to drive that car into the ground. Will things break? Of course. Start putting some of that extra $200 bucks a month into a car repair/new car fund. If you are anticipating (and have money for) regular repair, it won't seem like that big of a deal.
posted by davey_darling at 8:11 PM on July 22 [3 favorites]

Jon-o and davey_darling have it already, but if you are still in doubt here is a third opinion: keep your car. Repair it when it needs it. You will save loads of money in the long run.
posted by mbatch at 9:59 PM on July 22

I was asking myself the same question recently. It may help to look at it in financial terms. A useful figure for me was "cost per year to have a working vehicle." (This assumes that you don't really care about your car beyond it gets you from here to there.)

I figured that I would have a new car for 10 years, and it would cost me ~$25k over the course of those 10 years. In other words, I'd have to incur repair costs greater than 2.5k in a given year to justify a new car purchase. Looking at this figure helped me be okay with a large (1k+) repair bill I just paid.
posted by dualityofmind at 10:12 PM on July 22

Don't buy.

It is never financially sensible to borrow money to buy a car that will then depreciate. If you want a new car and have to borrow money to do it, don't kid yourself that it's because it's "sensible" - it's because you want a new car and don't want the hassle of trying to find a good used one.

Environmentally, it is almost always better to keep your old car, than buy a new one, due to the amount of resources that goes into building the new car.

Take the $200 a month and put it towards saving for your new car.
posted by kjs4 at 11:44 PM on July 22

The answers so far have been waaay too one-sided. Many of them assume that financial considerations overshadow everything else. The financial calculations are also in ways misleading. That doesn't mean you should definitely buy, just that the ananysis is closer than you think and needs to be looked at fairly.

When calculating the cost of keeping the old car running you simply must take into account how much more time and hassle it will be than a new one. Old cars break down more than new ones. How much time from work and the reast of your life can you reasonably expect to miss dealing with breakdowns and repairs over the remaining life of the car? And how likely you might have a breakdown at a critical time which will keep you from going somewhere important, and/or require a rental in its place? Convert that time and lost opportunity to dollars and add it in. For some people that will be a low number but not for everyone, only you can set the values for you.

And what about other life considerations? I know nothing of your situation, but I will just say that if you have children or expect to have them within a few years you shouldn't be driving an old car. That affects model decisions, too.

And are you happy driving an old car? If utility were the only consideration in life, wouldn't everyone still be watching their old 24" TVs with Digital-to-Analog converter boxes rather than buying nice new bigscreen TVs? Only you can place a value on how much that is worth to you.

Using many of the same arguments used in this thread leasing is a bad deal. But many people do it, because when they look at all factors it is worth it. I am not saying definitely buy (though I would if the old car were a bit older) but just that you need to take a broader view in your decision.

On the other hand, when I was sitting at a traffic light earlier today a Model-T pulled up next to me, so there are a wide range of opinions of where to draw the buy vs. repair line :)
posted by aguy at 12:41 AM on July 23 [2 favorites]

How much time from work and the reast of your life can you reasonably expect to miss dealing with breakdowns and repairs over the remaining life of the car?
Just anecdotally, in my experience as a mechanic, unless your car is a huge turd, you can expect it to spend two, maybe three full days out of the year on a major repair.
posted by Jon-o at 4:21 AM on July 23

Thanks all for the advice :o) I'm glad I got another set of opinions about this, because any friend or family member I mention this to just says, "Oh, it's a great time to buy a car right now," or "The new Focus looks really nice!" And it also seems like a lot of people in my life recently bought new cars, so they're eager to offer their experiences. (And probably subconsciously that planted the "new car" bug in my mind, too.)

aguy, you bring up a good point about time spent dealing with repairs. At the moment, everything that's happened has been fixed in a day, and my garage is close to my office (and has a shuttle service), so I'm not really missing work, though it is a hassle. The fear of something going wrong while far from home has definitely prevented me from driving places, though.

I think for now I'll take it in for its 85,000 mile maintenance visit, maybe have it detailed so it's all shiny and clean, and enjoy it for a while longer. It really is a good little car.
posted by LolaGeek at 5:14 AM on July 23 [1 favorite]

Sounds like you've already made a decision, but I'd just like to join in the 'keep the old car' chorus. If you were someone who depended on having a new car for professional reasons (I'm thinking mostly of real-estate salespeople here), you'd know it. If you were someone who depended on a reliable car, you'd know it (though, personally, I'm not convinced a well-maintained late-model low-mileage used car is any less dependable than a new one). If you were someone who placed a lot of importance on having a shiny new car, you'd know it (and you probably wouldn't have an '02 Focus). If you don't fit into one of these categories, a new car probably isn't the best choice for you.
posted by box at 6:10 AM on July 23