Need Help on Vehicle Situation/Another Car Purchase Question

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
OnTrack2020
Posts: 753
Joined: Mon Mar 20, 2017 10:24 am

Need Help on Vehicle Situation/Another Car Purchase Question

Post by OnTrack2020 »

Background: We have 4 teens (1 will not be driving for another 2 years, more than likely). We live in an area where there is no access to public transportation such as buses, trains, Uber, etc. and riding a bus/walking/bicycling to school is not an option. We are heavily reliant on vehicles due to work schedules, college schedules, school schedules, etc.

We have $8k earmarked for emergency funds. We also have around $14k in credit card debt----I know. (Am considering paying down with the $8k). Also have a little over $7k set aside toward a vehicle. Husband wants to retire in around 4 years or so--he's 58. I think we are doing okay toward retirement.

Here's our vehicle situation:

Husband - 12 year old Tacoma - 116k miles -- drives to work everyday
Me - 6 year old Sienna - 116k miles -- run errands, takes/picks up a child from school, out-of-town weekly travel for an evening or so
Son #1 - 7 year old Corolla - 50k miles - will have it during college
Son #2 - 16 year old Dodge pickup - 200k miles -- will have it during college (is saving to buy a newer pickup)
Daughter #1 - No vehicle and is in high school
Daughter #2 - Not yet driving and will attend same school as Daughter #1

We tried very hard last year in sending Son #1 to college without a vehicle. College in rural area. During the winter, he got sick and relied on college friends to get him to the clinic/hospital and to go pick up prescriptions. This made me nervous because if he couldn't find someone to take him, he had around a 30 minute walk. Sorry, but in the middle of winter walking in the cold to the doctor is not the least bit appealing to me when someone is sick. So, I gave him the Corolla that Daughter #1 was driving to school this past Spring and then took and picked up both daughters from school (two separate schools at the time) for the remainder of the school year. Also, prior to handing the Corolla over to him, if Son #1 was coming home from college on break or for the weekend, we had to travel a few hours to pick him up and a few hours to bring him home, and the same when we took him back to college. At this point, we are continuing to allow him to drive the Corolla.

So, this is what I feel are our options.

Option #1. Buy hubby a newer Toyota pick-up (which I think he would like, as he's mentioned it). (We have the $7k set aside for a vehicle, and I would have to pull money from taxable funds set aside for retirement.) Give Son #1 my husband's pick-up. Have Daughter #1 (and Daughter #2) drive Corolla to school.

Option #2. Take the $7k set aside for a vehicle toward the purchase of a used car for Daughter #1. Am not looking for a vehicle that is very old---5-7 years old or newer for a dependable brand, but I know it's going to cost more than $7k--I've checked.

Any other options I'm not seeing?
Last edited by OnTrack2020 on Sun Jul 30, 2017 10:43 pm, edited 1 time in total.
PFInterest
Posts: 2684
Joined: Sun Jan 08, 2017 12:25 pm

Re: Need Help on Vehicle Situation/Another Car Purchase Question

Post by PFInterest »

I'm sorry. I stopped at 14K CC debt.
Topic Author
OnTrack2020
Posts: 753
Joined: Mon Mar 20, 2017 10:24 am

Re: Need Help on Vehicle Situation/Another Car Purchase Question

Post by OnTrack2020 »

PFInterest wrote:I'm sorry. I stopped at 14K CC debt.
I know, I know :oops: .....I'm thinking I should take the $8k and $7k and just pay it off. Then deal with the car situation.
runner3081
Posts: 3930
Joined: Mon Aug 22, 2016 3:22 pm

Re: Need Help on Vehicle Situation/Another Car Purchase Question

Post by runner3081 »

Make the kids buy their own cars.

Many colleges, rural or suburban run shuttles or have similar services. A car is really not necessary at college especially with your financial situation.

Show your kids the responsible choice.

All I see is spending money for convenience. Don't want to pick your kid up from college, etc. Sure, he can get sick, but if there is a college, there has to be some kind of way to get to the doctor. Why doesn't he see the health facility on campus? Many schools have one.
Topic Author
OnTrack2020
Posts: 753
Joined: Mon Mar 20, 2017 10:24 am

Re: Need Help on Vehicle Situation/Another Car Purchase Question

Post by OnTrack2020 »

runner3081 wrote:Make the kids buy their own cars.

Many colleges, rural or suburban run shuttles or have similar services. A car is really not necessary at college especially with your financial situation.

Show your kids the responsible choice.

Buying a new truck makes zero sense. Low 100K miles on a Toyota truck? You still have another 100K to go.

All I see is spending money for convenience. Don't want to pick your kid up from college, etc. Sure, he can get sick, but if there is a college, there has to be some kind of way to get to the doctor. Why doesn't he see the health facility on campus? Many schools have one.
No campus shuttle that I know of. Our son did go to the campus nurse when he became ill----the nurse was out sick. Am not looking for a debate on convenience. I'm looking for options in terms of a vehicle purchase.
mortfree
Posts: 2518
Joined: Mon Sep 12, 2016 7:06 pm

Re: Need Help on Vehicle Situation/Another Car Purchase Question

Post by mortfree »

Get a car loan. The rate should be lower than the credit cards.

Then pay down the cc with the cash.

Build up that emergency fund!

I know bogleheads - buying a car without cash is a bad thing.
User avatar
Alexa9
Posts: 1872
Joined: Tue Aug 30, 2016 9:41 am

Re: Need Help on Vehicle Situation/Another Car Purchase Question

Post by Alexa9 »

A summer job can easily buy a used Corolla. If you're tight financially, I'd get everyone to drive Corollas.
User avatar
bottlecap
Posts: 6605
Joined: Tue Mar 06, 2007 11:21 pm
Location: Tennessee

Re: Need Help on Vehicle Situation/Another Car Purchase Question

Post by bottlecap »

You haven't given us your whole picture, but it sure doesn't sound like your in a position to afford a new car. A used one isn't going to help the cc debt.

Have you called the school to see about transportation? Sounds fishy that there is none.

If anyone needs to get around at school, Uber is going to be a whole lot cheaper....

JT
Jack FFR1846
Posts: 13279
Joined: Tue Dec 31, 2013 7:05 am
Location: 26 miles, 385 yards west of Copley Square

Re: Need Help on Vehicle Situation/Another Car Purchase Question

Post by Jack FFR1846 »

Does the college have zip car? My son used this for a year before we got a cheap car for his summer job.

Can the high school kids take a school bus?

I would think that the kids should have summer jobs right now. My son has one and when he gets paid, 100% goes to my checking account so I can put it towards the college costs. Kid earnings shouldn't be blown on crap that they want. You're already under water with credit card debt. Have a family meeting and let them know this. You're not a rich family trying to figure out what color Range Rover Sport you're going to buy next. Any of your cars could quit at any moment.
Bogle: Smart Beta is stupid
User avatar
8foot7
Posts: 2448
Joined: Mon Jan 05, 2015 7:29 pm

Re: Need Help on Vehicle Situation/Another Car Purchase Question

Post by 8foot7 »

Don't buy your kids cars when you are four years from retirement and still have credit card debt.
Topic Author
OnTrack2020
Posts: 753
Joined: Mon Mar 20, 2017 10:24 am

Re: Need Help on Vehicle Situation/Another Car Purchase Question

Post by OnTrack2020 »

bottlecap wrote:You haven't given us your whole picture, but it sure doesn't sound like your in a position to afford a new car. A used one isn't going to help the cc debt.

Have you called the school to see about transportation? Sounds fishy that there is none.

If anyone needs to get around at school, Uber is going to be a whole lot cheaper....

JT
It's a small, rural town. When one is out in rural America, especially west of the Mississippi River, transportation is an issue in rural areas. Small/smaller towns do not have Uber and Lyft because there's no money to be made, and rural colleges and universities typically don't have shuttle services.

I'm certain there is Uber in a larger city about 20-30 minutes away from where he attends, but that would defeat the purpose for him needing to get to places within the small town where he attends college. He did a lot of walking last year. :) I did check their website. The only transportation/shuttle service that is provided is to two airports and not provided by the university, but by an outside organization.

I'm with you, if there was an Uber, we'd have him use it versus using a car while at college.
Topic Author
OnTrack2020
Posts: 753
Joined: Mon Mar 20, 2017 10:24 am

Re: Need Help on Vehicle Situation/Another Car Purchase Question

Post by OnTrack2020 »

Jack FFR1846 wrote:Does the college have zip car? My son used this for a year before we got a cheap car for his summer job.

Can the high school kids take a school bus?

I would think that the kids should have summer jobs right now. My son has one and when he gets paid, 100% goes to my checking account so I can put it towards the college costs. Kid earnings shouldn't be blown on crap that they want. You're already under water with credit card debt. Have a family meeting and let them know this. You're not a rich family trying to figure out what color Range Rover Sport you're going to buy next. Any of your cars could quit at any moment.
College has no transportation except to and from two airports, and the transportation is provided by an outside organization. No busing for high school. Son #1 has been working this summer and a good chunk of his paycheck has been set aside for college this Fall.

I'm thinking I will pay off the credit card debt with the cash we have. Work on building the emergency fund, and take a small loan for a used car.

Thanks for everyone's help!
BanquetBeer
Posts: 494
Joined: Thu Jul 13, 2017 5:57 pm

Re: Need Help on Vehicle Situation/Another Car Purchase Question

Post by BanquetBeer »

Assuming you have a low 18% interest rate on those credit cards you are paying $2,500/yr! How can you afford this debt! You likely could have bought a car on the interest you paid already.

Get a cash car for $2-3k and put the rest of the money to pay off cc debt. If the car breaks or your daughter wants a better car - they need to add to that themselves. At that level of financial fitness I would be driving my cars to 200k miles or start of major repairs.
User avatar
warner25
Posts: 527
Joined: Wed Oct 29, 2014 4:38 pm

Re: Need Help on Vehicle Situation/Another Car Purchase Question

Post by warner25 »

What college is this? I'm really curious.

A bicycle certainly comes to mind for getting around on campus. A 30-minute walk should be about 10 minutes on a bike. Even in winter that should be fine.
User avatar
Kenkat
Posts: 7021
Joined: Thu Mar 01, 2007 11:18 am
Location: Cincinnati, OH

Re: Need Help on Vehicle Situation/Another Car Purchase Question

Post by Kenkat »

BanquetBeer wrote:Assuming you have a low 18% interest rate on those credit cards you are paying $2,500/yr! How can you afford this debt! You likely could have bought a car on the interest you paid already.

Get a cash car for $2-3k and put the rest of the money to pay off cc debt. If the car breaks or your daughter wants a better car - they need to add to that themselves. At that level of financial fitness I would be driving my cars to 200k miles or start of major repairs.
I agree with this - focus on getting the credit cards paid off quickly; buy a 12-15 year old car for $3-4k or less. You should be able to find something decent in the 2002-2005 range with high miles but in decent shape. My kids drive a 2004 Chevrolet and a 2005 Toyota and they are perfectly good cars for their needs.
Topic Author
OnTrack2020
Posts: 753
Joined: Mon Mar 20, 2017 10:24 am

Re: Need Help on Vehicle Situation/Another Car Purchase Question

Post by OnTrack2020 »

BanquetBeer wrote:Assuming you have a low 18% interest rate on those credit cards you are paying $2,500/yr! How can you afford this debt! You likely could have bought a car on the interest you paid already.

Get a cash car for $2-3k and put the rest of the money to pay off cc debt. If the car breaks or your daughter wants a better car - they need to add to that themselves. At that level of financial fitness I would be driving my cars to 200k miles or start of major repairs.
You are right! It stinks! Am going to pay off both credit cards today! Thanks...
H-Town
Posts: 3346
Joined: Sun Feb 26, 2017 2:08 pm

Re: Need Help on Vehicle Situation/Another Car Purchase Question

Post by H-Town »

I would not recommend buying car for your children. They need to learn how to earn their keep.

If you already make up your mind about buying a car. Please don't buy new car or a new pick-up truck. Look at used old model Corolla or Civic.

Pay off your credit card debt first, then set a budget for your car that you can afford. Meaning that, you need to pay off $14k debt in full, then continue to save for the car. You'll need to save enough for a used car that you can pay in cash.
inbox788
Posts: 7926
Joined: Thu Mar 15, 2012 5:24 pm

Re: Need Help on Vehicle Situation/Another Car Purchase Question

Post by inbox788 »

I'll echo the concern over credit card debt. Also, with so many teens in college, what is your family contribution? Is it going up with each incremental kid or are they receiving full financial aid? It's not clear to me your retirement planning is complete, but if you're comfortable beginning to spend your retirement, I like plan 1, the newer Tacoma for dad. Of all the cars, only the older dodge truck would be a reliability concern, and overall, I would expect little trouble among your fleet for the next 5 years, but be sure to have a good emergency for a couple of unplanned major repairs.

Sons driving trucks is immediately a moving company. They could be making some side money moving things around on weekends and holidays. Students are always needing help, and so is the greater community. Just don't underprice the service. It's often given away free for a six pack that barely covers the gas cost, let alone time involved. Plus the six pack doesn't pay bills, though it might save some money hat could be used for expenses.

Who's paying for insurance, gas, maintenance and repairs? Do they have any expectation of paying back the car?
OldSport
Posts: 528
Joined: Tue Jul 25, 2017 7:01 pm

Re: Need Help on Vehicle Situation/Another Car Purchase Question

Post by OldSport »

Is there any way to increase household income? When funds are tight and you need something dependable and reliable, a used well-maintained Corolla is about as good as it gets.
rob65
Posts: 379
Joined: Mon May 09, 2016 1:30 pm

Re: Need Help on Vehicle Situation/Another Car Purchase Question

Post by rob65 »

I am about to commit blasphemy. It's okay to buy cars for your kids. You're not buying them sports cars; you're getting them used pick-up trucks and Corollas.

Credit card debt isn't good, but stuff happens.

If you have good credit scores, a car loan will probably have a better interest rate than your credit cards. Check with your local bank or credit union. I would be inclined to finance the car with a reasonable down payment and use the rest to pay down the credit card debt.

I would lean towards option 2 since I think it's the least expensive in the short run. A disclaimer - I've never lived where driving in snow was an issue, so that might tilt things towards the pickup trucks.
Topic Author
OnTrack2020
Posts: 753
Joined: Mon Mar 20, 2017 10:24 am

Re: Need Help on Vehicle Situation/Another Car Purchase Question

Post by OnTrack2020 »

OldSport wrote:Is there any way to increase household income? When funds are tight and you need something dependable and reliable, a used well-maintained Corolla is about as good as it gets.
Not at this point in time. Credit cards have been paid off and will now save for an old Corolla.
inbox788 wrote:I'll echo the concern over credit card debt. Also, with so many teens in college, what is your family contribution? Is it going up with each incremental kid or are they receiving full financial aid? It's not clear to me your retirement planning is complete, but if you're comfortable beginning to spend your retirement, I like plan 1, the newer Tacoma for dad. Of all the cars, only the older dodge truck would be a reliability concern, and overall, I would expect little trouble among your fleet for the next 5 years, but be sure to have a good emergency for a couple of unplanned major repairs.

Sons driving trucks is immediately a moving company. They could be making some side money moving things around on weekends and holidays. Students are always needing help, and so is the greater community. Just don't underprice the service. It's often given away free for a six pack that barely covers the gas cost, let alone time involved. Plus the six pack doesn't pay bills, though it might save some money hat could be used for expenses.

Who's paying for insurance, gas, maintenance and repairs? Do they have any expectation of paying back the car?
They pay for gas.

Son #1 is a full-time student, works pretty much full-time during the summer and contributes toward college, goes back to being a poor college student during the school year. He had a work-study last year, but not a lot of hours. He doesn't have much money for extras period. He lives fairly frugally. Our expectations are that he maintains his grades to continue to receive the scholarship. We have money put back for him and pay additional throughout the year. As for the vehicle, he pays for gas and will pay 1/2 on some car work that needs to be done before going back to college.

Son #2 is disabled and will attend community college. His college funding is pretty much complete. Any extra left over from college money goes toward future housing needs. He also works part-time. He has currently saved around $10k for his next vehicle.

Daughter #1 will either enter the work force or possibly community college. We do have funds set aside for her; if she doesn't use for college, will use for housing in the future. We contribute small amount each month. Her college funding is almost complete; we will add about $3,000 more dollars over the next few years.

Daughter #2 is disabled and will, more than likely, attend community college and live at home with us during that time. Funds are being set aside for her education. We will add about $6,000 over the next 6 years.

I would like both girls accounts to be about $20k. I don't know why--it's just where I am from a comfort level, I guess. Community college tuition and fees run around $4k per year here. Your post has me now thinking more about this, I think we should maybe stop the college funding for Daughters #1 and #2??

Our retirement planning is not complete, but we are getting there. I'm thinking now that we've paid off the credit cards, we should increase hubby's 401k, increase contributions to my traditional IRA, and save for a cheap, used car, and get an emergency fund going. We would have an additional $1,000-$1,200 a month to put away.
Post Reply