Help! Talk me out of impulse buy!

[beccazan]

Hello, All!  Here's my dilemma.  Currently I have a 2000 Honda Accord EX with almost 130,000 miles on it.  Not in the worst shape, but the itch to get something new is getting stronger.  I've been looking at the Honda Fit because of the gas mileage and I like that it looks like a cross over without the higher price tag.  My only debt right now is my mortgage which is covered by my military pension including extra toward principal each month.  I have $20k in savings and $140k between IRA and 401k.  I could use money from my savings to put a significant chunk down (maybe $10-$15k) and still have a decent sized savings.  Or I could stop adding extra to the mortgage and that would cover the car payment plus a little extra to pay it off faster.  I don't want to be impulsive because it took a while to build up the savings so want to make sure I use it wisely.  I had a goal of building up savings to $50k to cover the cost of a new car (outright), any emergency, etc.  Should I just keep adding to the savings and wait to make car purchase?

Any advice would be appreciated!

[swamp]

fuck it. buy it. life is short.

[beccazan]

Seems fate has stepped in and made the decision for me.  I didn't realize the dealership I was looking at was in SC (I'm in NY).  I do have a friend that lives in SC I could visit...

[Tiny]

50K for a Honda Fit!!!   The Fit was on my list when I was looking for a vehicle in the 20K range 5 years ago!

But seriously, why not start playing around with the numbers - I know the Holy Grail of penny pinchers everywhere is to "Pay Cash" for a car.   Unfortunately, I think the "Pay Cash" thing is actually a euphemism for don't buy more car than you can afford. With "Afford" meaning you've figured out how potential car payments/downpayment on the vehicle will effect your 'spending plan'  for the next 5 years (or so).

A good YM'er wouldn't necessarily pay cash for the car... the perfect ym'er would finance 100% (or as close as possible) at 0% or as close as possible to 0%.     But that assumes that the YM'er has all their financial ducks in a row and has enough "disposable" income to cover the loan payments without disrupting their line of ducks.

It looks like you have savings... so why not split the difference when you go to buy the next new car...put some money down, and then finance the remaining at a low interest rate for a few years (or 5 years).    Depending on the size of your monthly payment (which you will have control over because you have plenty of cash to put down) you might not need to dramatically change how you are already allocating your money.   and you might be able to continue "saving" money.   You want to get the biggest bang for your buck - LONG TERM.   

I'm a big fan of "not rocking my financial boat" - so when I bought a new car 5 years ago - I knew I had up to $250 a month I was willing to commit to a car payment.   I also had a lot of $$ in the bank.    I did put money down, and then financed for 5 years (car payment was $200).   The new car/payment  didn't change my lifestyle or long term plans.   I just finished paying the loan... and now I have $200 a month  to put towards something else since I don't have a 'spot' for it.  It's accumulating in savings at this point. 

[andi9899]

Jul 21, 2017 8:57:55 GMT -5 swamp said:

fuck it. buy it. life is short.

This. Sorry. My YM card bursted into flames years ago.

[TheOtherMe]

I love my Honda Fit!

[alabamagal]

Jul 21, 2017 9:10:43 GMT -5 beccazan said:

Seems fate has stepped in and made the decision for me.  I didn't realize the dealership I was looking at was in SC (I'm in NY).  I do have a friend that lives in SC I could visit...

If you buy out of state you may have to pay both out of state sales tax and NY state taxes if the states don't have sales tax agreement, a lot of time only done with bordering states.

[andi9899]

Surely there are plenty if Honda Fits for sale in NY.

[NoNamePerson]

Jul 21, 2017 10:16:03 GMT -5 andi9899 said:

Jul 21, 2017 8:57:55 GMT -5 swamp said:

fuck it. buy it. life is short.

This. Sorry. My YM card bursted into flames years ago.

I never was issued a YM card what does that say about me. 

[countrygirl2]

We have been looking for a gently used car for son and DIL. Looks like
the best buys are rental returns. Right now we are considering a Rav 4
that is a 2017 with about 20000 miles on it for $23k I believe it is. We
also want an AWD so this fills the bill. Has a carfax check and service
records. They are a little more if certified and they continue with the
original warranty plus have an additional warranty from Enterprise or the
other rental companies.

I'm actually thinking of doing the same next time I buy one. I have had
2 this way and had good service from them.

[beccazan]

Jul 21, 2017 10:07:56 GMT -5 Tiny said:

50K for a Honda Fit!!!   The Fit was on my list when I was looking for a vehicle in the 20K range 5 years ago!

But seriously, why not start playing around with the numbers - I know the Holy Grail of penny pinchers everywhere is to "Pay Cash" for a car.   Unfortunately, I think the "Pay Cash" thing is actually a euphemism for don't buy more car than you can afford. With "Afford" meaning you've figured out how potential car payments/downpayment on the vehicle will effect your 'spending plan'  for the next 5 years (or so).

A good YM'er wouldn't necessarily pay cash for the car... the perfect ym'er would finance 100% (or as close as possible) at 0% or as close as possible to 0%.     But that assumes that the YM'er has all their financial ducks in a row and has enough "disposable" income to cover the loan payments without disrupting their line of ducks.

It looks like you have savings... so why not split the difference when you go to buy the next new car...put some money down, and then finance the remaining at a low interest rate for a few years (or 5 years).    Depending on the size of your monthly payment (which you will have control over because you have plenty of cash to put down) you might not need to dramatically change how you are already allocating your money.   and you might be able to continue "saving" money.   You want to get the biggest bang for your buck - LONG TERM.   

I'm a big fan of "not rocking my financial boat" - so when I bought a new car 5 years ago - I knew I had up to $250 a month I was willing to commit to a car payment.   I also had a lot of $$ in the bank.    I did put money down, and then financed for 5 years (car payment was $200).   The new car/payment  didn't change my lifestyle or long term plans.   I just finished paying the loan... and now I have $200 a month  to put towards something else since I don't have a 'spot' for it.  It's accumulating in savings at this point. 

Actually the $50k was to cover car plus emergencies, travel etc.  not just a car.  I think the Fit at it's highest is a little over $20k.

[kittensaver]

When I was car shopping a year and a half ago, this was the 'used car' advice I got (from the broker I eventually ended up using to buy a new car). Make sure:

1) it is coming directly off a one-owner lease that was no more than three years long

2) it does not have more than 40,000 miles on it

3) it is coming out of a certified pre-owned program.

FWIW, YMMV

ETA: I'm in the f* it, get-the-new-one crowd

[ilovedolphins]

I am having this same dilemma.  I want a new car but I don't want to spend my savings.  And I hate the thought that so much money is tied into a vehicle.

[grits]

Call Suze Orman, and ask her.  She's going to ask your age, income, debts, and such. If you're over 45, and only have $20k in an emergency fund, and $140k in retirement account, you'll get a DENIED!

[Deleted]

Buy IT! 

Wait, was I supposed to read first? 

[NastyWoman]

Sept 30, 2017 17:07:19 GMT -5 grits said:

Call Suze Orman, and ask her.  She's going to ask your age, income, debts, and such. If you're over 45, and only have $20k in an emergency fund, and $140k in retirement account, you'll get a DENIED!

Buy first. Ask permission later