Monday, November 26, 2012

Buy New Car or Keep Old Car?

I think I'm in the market for a new car. My current vehicle is a 2006 Acura TL with 90,000 miles. The new project requires me to drive close to 50 miles round trip so I think this may be the right time to down size the engine. The TL is a very nice car and has never had any issues but the engine has 270 horse power so it doesn't get good gas mileage:


I'm looking for something new with a 4 cylinder engine. We have the larger SUV so I really need something that can get good gas mileage and not be too expensive. I've looked at a lot of models, even hybrids and I think I have it narrowed down to a 2013 Hyundai Elantra Limited:


The TL is PAID OFF and I think I can get at least $10,000 for it. It has navigation which adds a little bit more to the value and it also has 10,000 miles left on a Acura Certified Warranty (covers everything). I could also sell it on my own and probably get a bit more but that's always more of a hassle. It's easier to just hand over the title to a company and get a check right away. 

The Hyundai would be brand new and I want to get it with navigation, proximity key entry and push button start. I think I can drive out somewhere around $23,000 with tax and title so I would be looking to finance $13,000. The goal would be to finance the full amount and then make the $10,000 payment to save on interest and to pay it down faster.

What do you think I should do? Keep the paid off car and avoid debt or finance a brand new car and save on gas?! The TL will eventually need some maintenance but could easily last up to 150,000 without major issues.

HS

14 comments:

  1. I think given the commute you should go with the Elantra with the better mileage and the extended warranty. I have a 2002 Acura TL that has 160k miles on it and it still goes great and will last me another 100k miles probably, but the gas mileage sucks. And gas prices are really never going to go lower than they are now. We will never see sub-$3 gas prices again, I truly believe.

    I like the Elantra. Hyundai has become less of an econobox brand over the last decade and really established itself as a good quality, high-end car.

    However, I qualify my advice to this: only do it if you REALLY will make the $10k payment.

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  2. I'd go with keep Acura. It's paid off so all you'll have is gas and insurance. With a new car you have gas, insurance and car note. Figure out how much each gets per gallon, figure out how much you'd save in gas versus how much you'll be paying out.

    Unless you just want a new car then go for it. But I don't think a new car will help you save money in the long run. Just my two cents.

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  3. Kara,

    The truth is I been thinking about sending that 10k to the cc's and be debt free :)

    HS

    Kelly- I think I want that new car smell LOL

    HS

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  4. Have you checked to see if your gas savings would actually amount to more than the finance charges and registration charges you'll pay by getting a new vehicle?

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  5. If you get 10k for the car....and send it to the CC....you will still have $23k debt for the new car. How are you debt free?

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  6. But will you stop using the card, or will you build it back up?

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  7. I could see you sending the 10K to the CC debt as a decent solution... IF you then STOP using the CC. I saw my parents do a similiar thing... get a consolidation loan, pay off the CC, only to then run up the CC again.

    I imagine you are paying more per month on CC minimum payments than you would on a $13K car loan (if you got a decent interest rate).

    They important thing is to STOP using the CC if you get the car loan.

    You really can stop using the CC. It just means you can't have all the fancy stuff, all the time. Moderation, sir.

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  8. Keep the car. I have more miles on my car than you and its still wonderful on gas mileage. And its older too!

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  9. I agree with Kelly -- I don't think the new car will help you save money. Compare the difference in gas costs (Hyundai vs. Acura) to the amount of interest that you'll pay to finance the Hyundai. I'm betting you'll pay far more in interest than you would on gas.

    That said, if you really want to downsize to a more fuel-efficient car, why not sell the Acura and buy a fuel-efficient car with $10K in cash? You don't need the bells and whistles. You can get a safe, reliable $10K car with good mileage.

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  10. Really, you should keep your car as long as you can. Mine is a 2006 and I will keep it 5 more years. Yours is an acura!! I don't think it will break down.

    If you are in debt, for sure keep it.

    Or you will end up like me! ;-)

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  11. Really, you should keep your car as long as you can. Mine is a 2006 and I will keep it 5 more years. Yours is an acura!! I don't think it will break down.

    If you are in debt, for sure keep it.

    Or you will end up like me! ;-)

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  12. Keep the car. I don't think you will stop using the credit cards. Also, before you do anything, find out the difference in insurance costs. I have known more than one person who was shocked by the cost of insuring a new car. With a loan, the bank will require you to keep a certain amount of insurance and even if you want less coverage to save money, you won't be able to have less coverage.

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  13. I changed my mind. You should get the car , pay off credit cards, and at least your interest will be lower. Plus Elantra is very nice.

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