Help with car buying decision

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Minou33
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Joined: Wed Dec 17, 2014 6:32 pm

Help with car buying decision

Post by Minou33 »

My husband and I own 3 vehicles (no financing). They are all older models all with over 100k mileage. The vehicle I drive is a 2010 Corolla with about 150k miles. We have made this our business car and the value of the car, commercial insurance, and maintenance for the vehicle are all tax write-offs through the business.

We live in a rural area with heavy snow and I have been considering trading in the Corolla for a newer SUV with 4WD. Would it be a good decision financially to purchase a newer vehicle knowing that we can write it off as a business expense? I haven't talked to the accountant yet--just thought I would ask for some advice here first. I tend to be the type to wait until a car dies and then scramble desperately to get a new one.
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jabberwockOG
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Re: Help with car buying decision

Post by jabberwockOG »

Heavy snow and ice = 4 wheel drive Honda CR-V, Toyota RAV4, Subaru Forester or Outback. No way I'd live and drive in harsh winter weather without a good reliable 4 wheel drive vehicle.
strafe
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Re: Help with car buying decision

Post by strafe »

It's almost always a better deal to keep driving (and repairing) and older car than getting a new one.

Factoring in the tax deduction, my guess is that you'd come out ahead keeping your old Toyota (an inexpensive, fully depreciated vehicle) and deducting the standard mileage rate. You'd have to run the numbers for your situation to sort that out.

The new car may be worthwhile from an income standpoint if your revenue depends on trouble-free transportation.
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CULater
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Re: Help with car buying decision

Post by CULater »

strafe wrote:It's almost always a better deal to keep driving (and repairing) and older car than getting a new one.

Factoring in the tax deduction, my guess is that you'd come out ahead keeping your old Toyota (an inexpensive, fully depreciated vehicle) and deducting the standard mileage rate. You'd have to run the numbers for your situation to sort that out.

The new car may be worthwhile from an income standpoint if your revenue depends on trouble-free transportation.
I tend to keep my cars forever also. I guess you have the weigh the potential cost of driving the Toyota into the ground and what you might lose in potential trade-in or private sale value by doing that, plus the hassle factor and financial consequences of being forced to buy a new vehicle on a time table not of your choosing vs. having some slack to be able to dicker with new car dealers for a good price. I have a 15 year old CRV with 190,000 miles on it that is still in good running condition, but I think I'm pushing my luck and will be purchasing a new vehicle before this one dies for the above reasons.
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Watty
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Re: Help with car buying decision

Post by Watty »

Minou33 wrote:The vehicle I drive is a 2010 Corolla with about 150k miles.
You are putting a lot of miles on the car but realistically you would only need the SUV for the snow a few weeks out of the year since even in the winter the roads should be pretty OK most of the time. In addition to the cost of buying the expensive SUV that might only last 7 years the gas prices would be a lot higher too.

You would need to figure out the taxes and insurance but I would look at;

1) Get a replacement business car like another Corolla.

2) Buying a good snow car like a SUV that one of you will drive as a personal car and not put a lot of miles on it. You could buy a used one with maybe 40K+ miles on it.

3) Drive the SUV for work when the roads are bad or there is snow expected.

That way you would get the lower operating costs of the Corolla for most of the year and the SUV would last many years if you are not putting a lot of miles on it.
taguscove
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Re: Help with car buying decision

Post by taguscove »

If you can write off the expense and your finances are in order, I suggest buying the car you want.

The people above are correct that it's almost never cheaper to replace an existing car from a financial standpoint. Then again, it's almost never cheaper to buy new clothing either.
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