Comments on: You Make the Call

By: Dave Ozment

Dave Ozment — Thu, 25 Jun 2009 09:32:04 +0000

Hmm, you add an interesting twist to the equation…. NEW DEBT…. I’d have to think long and hard about taking on a new car loan. We were able to pay cash because we had some buyout money in reserves. Those dollars’s ‘freed-up’ once I became reemployed. Had that not been the case would probably would have limped along and made only the smaller purchase – the commuter car – unless the debt car completely collapsed.

I ‘get’ the arguement for the debt option but as you suggest, that’s hard to swallow after working so hard to knock out the pre-existing debt. I suppose I might pause my snowball while saving money for the van. That forces you to remain dilligent and would likely empower you to accept another interim solution.

Great stuff, thanks for sharing!
Dave

By: J Brown

J Brown — Thu, 25 Jun 2009 02:10:03 +0000

It is a tough call. I am in a similar cross-road. I need a larger car, due to family growth. I decided to do the cost vs options route. We set a budget for less than out of pocket $10k for a van. In doing this, I have delayed the purchase to later, made a goal to get rid of ‘1′ more debt, and still shopping for the best deal. I hate to trade one debt for another, but my ‘unsecure’ cc debt is more of a risk than a fixed van debt. As for the cash-for-clunkers, the deal is you have to buy NEW to replace it. Yeah, the new cars are on sale, but they are still outside my $10k budget. In the debt is debt, but hopefully it will not delay our progress by too much.

By: Dave Ozment

Dave Ozment — Wed, 24 Jun 2009 09:51:06 +0000

Thanks Jerry…. yeah, I’ll be the first to admit that the summer heat played a role in our decision and you suggest a great point about it being the FIRST few months on the job… riding 45 mins to work each morning in a sauna is no way to make a good first impression with the many folks I’ll be meeting for the first time every day.

Thanks for contributing!
Dave

By: JerryB

JerryB — Wed, 24 Jun 2009 03:07:30 +0000

I think you made a sound decision. Your wife’s car could have had “the wheels fall off” at almost any time. Do, or would, you really want to be driving a no A/C Jeep for the first few month of your new job in the summer heat?

By: Dave Ozment

Dave Ozment — Tue, 23 Jun 2009 23:17:07 +0000

Good points and thanks for sharing… I suppose you’re right in that there was likely an interim step with smaller upgrades in cars. To be fair, we did that once about 3 years ago to get the debt-car for my wife and had we a longer runway to (non mortgage) debt freedom we would have proudly done it again. In this instance (and in my mind) the short timeline is the pivot point. We’ve killed debt for 2+ years so we could have waited a couple more months or we could enhance the car situation with the buyout cash (no car payments) knowing that we have the disciple and debt reduction muscles in place to power the rest of the way.

In my mind, that’s why this is such an interesting question… there is no horribly wrong choice (of our 2 options) but there surely is one better than the other. I honestly wonder if we would have opted for the other route had the timeline not been June, July, August, and September in HOTlanta!

…hey, and I’m quite proud of my Jeep! It never had AC so installing a system would not have been real practical but your thinking is on target. It’s in great condition with low miles for its age – due to my traveling every week for years. We’re actually planning to keep it as a third vehicle, or as a toy really… Hmm, perhaps that’s the real question in this process….

Thanks for contributing!
Dave

By: Andrea (Recession Proof Living)

Andrea (Recession Proof Living) — Tue, 23 Jun 2009 22:29:43 +0000

Well. . .I think Dave would say you overpaid for your cars! I think a better solution would have been to fix the AC on the old Jeep for your wife, and buy a $4000 commuter car for you. But I guess that’s water under the bridge now, right?

Another idea:you able to take advantage of the Cash for Clunkers program? The Jeep might qualify.if you still have it.

Hope it doesn’t sound critical. DH and I have rationalized several car purchases over the years. But I’m so glad to be out of the land of car payments that I never want to go back.!

Andrea

By: Dave Ozment

Dave Ozment — Tue, 23 Jun 2009 16:07:04 +0000

Thanks for sharing Cat… sometimes life does change and we need to be flexible to those needs…. but we need to be mindful of our original objectives too…

1 pt for my making a good decision

Thanks!
Dave

By: Cat

Cat — Tue, 23 Jun 2009 15:52:09 +0000

I had to do this- I was driving an 8 year old pickup, which I was content to drive until the wheels fell off. Until I had a baby, and all the sudden the pickup wasn’t the safest possible option (could still use it with the airbag off). But more importantly, I could no longer carpool, which started costing me $50 a month in extra gas. So I bought a used SUV for about 10k, and with accelerated payments will have it paid off by March. The trade off was extending my time in debt by a few months, as I had to slow down payments on my last credit card and my student loan debt. But it was totally worth it- I’m saving money carpooling, and I’m after I help a friend move, I’m going to sell my pickup and use that to pay down the new car debt even sooner.
Cat´s last blog ..Resemblance