Advice on car buying strategy

[StealthRabbit]

That is a lot of bread for a Minivan.
If you must.... budget and know it is a 'throw-away' expense....

in 2016 (Nov), I paid $800 for a T&C (grand size minivan) with 132k miles on it. It is very nice / captains seats / hitch, rear AC and no tears. (needed $60 in AC repair)
I got 320k miles out of my last minivan, so this outta do for a few yrs (probably the rest of my life).

My daily driver (older econo car) is 41 yrs old and I have NEVER been towed to a repair shop (in 3m miles / 45+ yrs) so not worried about it happening now.

YMMV (as well as your priorities)

$23k better be growing me some income, rather than sitting in a Parking lot or getting dented up by a distracted driver.

[chb119]

Originally Posted by coolcats

Maybe I'm talking myself into getting a loan and buying new ... two things I said I wouldn't do.

I paid off my last car over 8 years ago. I decided that I would not ever do a car payment again. However, I've recently been looking at a new (to us) minivan because that car is now 12 years old with 150,000 miles on it.

After researching, it seems like a Kia Sedona is the best bang for the buck because with 4 kids we need a minivan. It's reliability is actually pretty high now a days. However if I go that route, I would go certified pre-owned so I could get the 10 year warranty, because after all it is still a Kia. I can get a year-old Sedona with about 20,000 miles for an out the door price of about $23,000. I could pay cash for that.

I was going to do that, until I found a leftover 2016, but still new, model that the dealer will let me have out the door for $27,500. He will also let me finance it at zero percent for 66 months. My monthly payment would be about $416.

Given that I currently save $600 a month into my car fund and budget $200 a month on repairs for my high mileage cars, I could swing that $416 payment easily and still build up my fund by a couple hundred dollars a month. So by the time the 66 months are up, my car fund would be about $13,200 higher than it is today plus the small amount of interest I earn. I could even put that money in a 5 year CD and get more interest.

It would also in essence increase my emergency fund. Yes, my monthly obligated outflow would be $400 higher, but that $23k I wouldn't deplete now would add a good 4-6 months of emergency fund even at the higher level. I currently have an emergency fund that would last me about 6 months.

So bottom line ... am I rationalizing my way into buying a new car, and getting a car loan (two things personal finance experts preach against), or is this a sound strategy?

The thing with numbers is you can rearrange them to make anything look like a good idea.

The end of your 1st sentence is telling .."two things I said I wouldn't do. " Some where in the next 5.5 years of payments you will regret sending that check to Kia Finance or other bank. By the end you will hate it, and right back around to...i'll never do it again. So take the foresight and don't do it in the first place. Minus any significant issues, I'd keep running your current van and save for the one you want.

[hikernut]

Originally Posted by oregonwoodsmoke

There is a lot to be said for buying brand new and then taking exceptionally good care of the car and driving it until the wheels fall off.

+1

Yup. Buy a brand with good reliability history. Take care of it and don't abuse it.

I bought used cars for a quite a long time. Some worked well but others were a real headache with endless problems. I purchased my current Honda brand new and it's been great. Only other car I've owned that comes close was my first... a giant Ford sedan with V8 engine.