Alright, guys. We’ve got a problem. I think I’ve affectionately mentioned my hoopty before: a 2004 Ford Taurus. She doesn’t have a name, we’re not that close, but sometimes I feel like we should be. I bought the car in 2008 with just over 50,000 miles for $10,999. I was so excited, it was the first major thing I had ever qualified to owe money on all by myself! My payments were pretty high for someone just out of high school, but I still managed to pay it off almost a year early, and that felt even better.
For almost 10 years, old Goldie (I said she didn’t have a name, but maybe she needs one at this point) has been more than good to me. I’ve only had one major breakdown, and while the minor repairs have been expensive here and there, I can’t really complain about something that’s been 99.9% reliable for the 120,000+ miles I’ve put on it since I bought it. But she’s getting up there in miles, and sooner or later, she’s going to have to go to the Jiffy Lube in the sky.
While I’d still consider my car “good enough” for now, it’s almost 15, and it’s sure acting like a teenager. I’ve never had a working rear defroster, the transmission is starting to develop an attitude, I have door dings and literal holes in my bumper from fender-benders that I just don’t care to fix, and my cruise control seems to have cruised off into retirement. My radio antenna got stolen four years ago. Yeah, I was confused, too. My doors do this really cool thing in the winter where they freeze in whatever state they’re in. I’ve found it’s much safer to have it freeze shut than to freeze open and have to hold it while I drive home. Yup, it’s happened.
These inconveniences are minor, but I’m thinking they won’t stay that way forever. But how do you balance going gazelle intense at your debt with saving for a new car? How much should a person budget for a new car when they’re still $60k in debt? Should we even be thinking about this, or just wait until mine bites the dust completely?
Here’s where you come in. I’m going to tell you how Rachel and I have decided to move forward and why, and we want your input. Let us know in the comments what you would do if you were in our shoes, and whether or not we’re crazy.
- I’ve been in a situation before (different car) where my engine has blown in the middle of the road. It’s not fun, and I don’t intend to repeat it if I can avoid it.
- I drive 30-50 miles a day for work, depending on what jobs I’m at. Catastrophic failure on the highway, though unlikely at this point, would be dangerous and result in days missed from both jobs while we search for a replacement.
- Though it’s not much, there is still some value left in the Taurus, which I think we’d do better to take advantage of while we still can.
- If the Taurus were to die today, we would only have the $1,000 in our emergency fund with which to buy a replacement. The thought of buying an $800 car and then driving it all over town every day doesn’t make me feel warm and fuzzy.
- Now that the Discover loan is paid off, we’ve got an extra $200 every month to play with. Normally, this would be thrown into the debt snowball and applied to the next item on our list. We’re thinking of adding the $200, or at least some part of it, to the $150/month we already budget for car repairs and maintenance, bringing us to $350 each month.
- Once we hit $5,000 in the maintenance and repair category, we’ll sell the Taurus and buy something new. Normal maintenance will still come out of that budget, so it would probably take 2-3 years to save up.
- If the Taurus completely dies before we hit the $5k mark, we’ll use whatever we have saved up at that point, plus the $1,000 emergency fund if necessary (probably until we get to at least the $2k mark), to buy a replacement. If that happens, we may need to reset this process and try again, depending on what we’re able to find with the money we have at the point of breakdown.
- Because of my commute, I want a similar-sized sedan that would be better on gas mileage and able to accommodate a future Kyle Jr. or Rachel Jr. I’m currently leaning towards a Hyundai Sonata or a Honda Civic.
- This car needs to last for at least five years to get us through the debt storm and interfere as little as possible with saving for a house/retirement, so reliability is a must. I’m thinking something in the 2008-2010 range should be fine.
Okay, armchair experts. Have at it. Are we foolish for slowing down our debt snowball this drastically, or would it be more foolish to continue racing against the clock on old Goldie’s time left on Earth? Should we beef up our emergency fund instead? Is there anything we’re not thinking about that would impact this decision? Also, any tip you can think of for finding a reliable used car would be appreciated; I’ve always bought from a dealer, but I think our budget might be a little too small for that this time around. Thanks in advance for your help!