Wednesday, March 25, 2009

And the new car is

a 2009 Prius.

Though this was not how we wanted to buy a car, we're happy with the outcome.

In a perfect world the old car would have lasted until we had 10-15K saved up for a new one. If we financed anything it would have been less than 10K. Snowball money from my car and our appliances would have sped up the saving process. We would have shopped around more, possibly buying something at auction.

This isn't a perfect world though and stuff happens. Because we have an emergency fund we had the funds to make a down payment. Even though I (we, but the financing is all on me) bought a house last summer, which does ugly things to your credit, my auto score is low/mid 700's. His scores continue to rise and are almost at the 700 mark, a good hundred points since I moved here 2.5 years ago. We also know our finances well enough to know what we can and cannot afford.

Our previous snowball plan was: car, with auto savings going to the 0% appliances; break for yard furniture; saving for a new car; mortgage below PMI; student loan

With current financing (we are shopping the rate) payments start in 1.5 months.
Current plan: my car, auto savings on 0% appliances; pay off Prius; get mortgage below PMI; student loan. Yard furniture may look different this year but that's ok. Our time frame for the Prius is max 2 years.

We are going against the grain in one area of personal finance and with it in another. We added to our debt load. This is bad. But when we looked at our non debt options (3Kish) we'd end up with a car that would not last very long and likely have horrible fuel economy. The extent of our car knowledge is- gas goes here, get the oil changed, window washer fluid goes here, so getting something that would need work was not appealing.

We plan on having this new car (and mine) until they stop running, so even though we financed quite a bit the investment will be worth it over time. Depreciation on Toyota's in general, and Prius's specifically is pretty great. We were down to an 2007 and a few 2009. The difference in sticker price when you look at similar features was $2,500. Since we plan on having it for a while we got the features, color, etc that we liked, rather than get something we didn't like as much for $1,000 less.

For those of you wondering, the other contenders were: Matrix (he felt cramped), Rav4 (wonky seat belts in the back), Corolla (I wanted another utility from the second car), Forester (I don't like AWD). There were a few more early on that I can't remember.

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