In this edition, I question whether or not being grateful for a "new" car is appropriate. I'm having mixed feelings about our recent purchase.Hello everyone! I hope all my US readers are enjoying Independence Day.

I remember writing my “being grateful” post last year on this subject, and I seriously can’t believe a year has passed already. So much has changed!

Speaking of which, I have some financial news to share with you all.

Should I Be Grateful for a “New” Car?

Yep…that’s right. We finally decided to get a new-to-us car. Specifically, a 2013 Civic. What can I say, I love my 2002 Civic, so it made sense. Plus, I’ve been in my grandma’s 2015 Civic, which is close to the same thing, and liked it.

This has been a decision that has been weighing on us for a while. Long-time readers will remember this post (published in 2013!) where R and I argue about the “need” for a new car.

If you want some background, you can read up on it there. Not much has changed, except…

A few months ago, the check engine light came on, and it was due for inspection last month. We knew it was either make the repairs to get the light to turn off (likely a sensor issue), stay with my car being our only car, or get another car.

After the amount of money R had sunk into the car, he wasn’t eager to spend more. My car is just about at 100k miles, and I’m just expecting something to go (preparing for the worst!).

Even though his car only had 115k miles on it, it had never run well, and we didn’t want to push our luck. It’s been shaking whenever it goes over 50mph, it creaks when it turns, and I wouldn’t trust it to get us anywhere far.

R had been browsing Craigslist to get a feel for the market ever since we moved here, and last weekend, I started digging in.

We knew we were going to go with a newer Civic, Elantra, Accent, or Corolla. They’re all fairly inexpensive and reliable. We also wanted to keep our monthly payments under $200 (with a budget of around $13k). We had money set aside for a down payment.

I may do a separate post on this in the future, but we obviously got the Civic. I still can’t believe we did it, either. Every time we go out to the parking lot, I have to do a double-take.

To be honest, if it were completely up to me, we would have gotten an older car for less. I got an amazing deal on my Civic 5 years ago – $6,000 for ~50k miles, original owner.

We’ve been trying to look for something similar, but to no avail. Most cars under $10,000 had 100k miles or more on them. I get that cars are likely lasting longer nowadays, but R and I aren’t car-savvy enough to inspect it ourselves and didn’t want to risk getting a lemon. (We still don’t have a reputable mechanic here.)

Plus, a lot of cars down here have rebuilt titles, so a dealership seemed like our best option.

Congratulations?

I had consulted with my parents before we made the decision. Once we got the car, they congratulated us, and my immediate response was, “For what? Getting into debt?”

Yeah I know, I’m so cynical aren’t I? =)

I don’t want anyone to think R pushed me into making the decision. In the post I referenced above, I was very against getting a newer car, and my stance hadn’t changed as much.

Ultimately, it made sense, and R’s name is the only one on the paperwork in case you’re wondering. We’re not married yet!

Of course, our insurance also went up, but we mitigated that by putting R and the car on my policy. There was about an $80 difference between our quotes!

So Am I Grateful?

Yes and no. We didn’t jump into it, and for our first experience, it actually wasn’t too bad. We had one very pushy salesman, but we were able to walk away each time because we weren’t in a rush.

The car is certified pre-owned, which means it’s covered under a decent warranty. We’re able to get a lot of peace of mind, and considering I’d love to do more weekend and day trips in the future, it’s nice to have a reliable car.

However, we have been operating as a one-car household for the most part since we moved. I don’t usually have to be anywhere during the day, and R took my car to work most of the time.

I won’t lie – that makes us look pretty wasteful. But work can change, and besides taking day trips, I’d also like to be able to drive to my parents (or anywhere) by myself if need be, without worrying about my car breaking down. It’s nice to feel safe, and I like having a backup just in case.

Thankfully, my car isn’t costing us much because it’s paid off and the insurance is around $30/month (hopefully decreasing with less usage).

Bottom line – we can afford it, though I know it seems like a bad decision given our student loan debt. That’s still our #1 priority. We’ll make extra payments on the car after our student loans are gone.

We plan on having this car for as long as it will last, and at 38k miles, and being a Honda, it should do well.

In Other News…

Getting the car has actually motivated me to tackle my student loans more. With my payment, R’s payment, and now the car payment, a bit too much is going out for my liking (my fault, I know).

I read up on my student loan servicer’s policy about directing payments to certain loans, and contacted them to see how it was possible.

They told me they can reapply a payment toward a certain loan, so hopefully it works. I have a $1,400 loan sitting at 6.8% that I’d love to get rid of.

Why have I waited so long? Truthfully, I’ve been wanting to build up my income. I was bringing in close to nothing this time last year, but as of a few months ago, I’ve doubled the income I was earning at my day job.

I also opened a business bank account for myself, so technically, our money is back to kind of being separate. It’s a little weird, but I’ve grown my balance to equal our joint account, and I feel safe paying off this loan while taking tax payments into consideration.

Writing Around the Web

Why Being Too Frugal on Vacation is a Bad Idea on Frugal Rules – I’ve always been honest that I have a problem with spending money. I don’t like doing it (as you can tell from the car purchase). But when that interferes with your vacation, it’s not a good thing.

How to Save Money on Your Cell Phone Bill on Wherewithal – I posted about switching to Republic Wireless over a year ago now, and it’s been saving me about $750 a year. Phone bills can eat up a big part of your budget if you’re not careful!

Why You Need More Than One Source of Income on Young Adult Money – Ever since I began freelancing, I’ve been addicted to diversifying my income and work as much as possible. It pays to have backup plans!

What are you being grateful for this week? What are your plans for this weekend? I hope you all have a safe and happy 4th of July!

 

28 Comments

  1. Dee @ Color Me Frugal July 4, 2015 at 7:08 AM

    We bought a new to us car in early 2014, and I recall feeling the same way when people would congratulate me. Isn’t it funny that in our society big purchases (read: acquisition of large debt) are a reason to congratulate someone?? However, I completely agree that it is nice to feel safer on the road!! We love our new car, but I’m glad we waited as long as we did to buy it.

    Reply
    1. Erin M. July 4, 2015 at 11:51 AM

      I didn’t even think about it beforehand – I just said it because that’s what it feels like! (I’m probably focusing a little too much on the numbers, if that wasn’t obvious.) My parents know about my blog so they laughed and shrugged it off. It is weird to think about, though. Glad to hear your “new” car has treated you well!

      Reply
  2. Tonya@Budget and the Beach July 4, 2015 at 9:26 AM

    I went through a lot of guilt when I got my new to me 2009 Rabbit last year when my Subaru died. Cars are kind of one of those necessary evils, and having one that makes you scared to drive it is no bueno. Enjoy the new ride!

    Reply
    1. Erin M. July 4, 2015 at 11:49 AM

      I’m glad I’m not the only one. =) It’s such a big purchase, it’s hard to feel 100% okay with it (forget buying a house!). Necessary evil is a good way to put it. However, we just got to my parents house, and R was commenting that driving down here was so much smoother, so there is that!

      Reply
  3. Chela @SmashOdyssey July 4, 2015 at 11:23 AM

    Well I’ll say it, too. Congratulations on the car purchase! It certainly sounds like it was time, and that you didn’t rush into the decision. I have a Corolla with 103k miles, and Michael has an Impala with 160k miles, and both are going strong. Mine has had no maintenance issues whatsoever, his has had some minor things, but nothing too bad. I’m hoping we won’t have to get new cars anytime soon! His is paid off and mine is almost there. I’m hoping to be car-payment free for a few years at least!

    Reply
    1. Erin M. July 4, 2015 at 11:48 AM

      Haha, thanks! That’s awesome both of your cars are in good shape. My aunt swears by Toyota’s, but my mom loves Honda’s, and apparently I’ve continued the trend. Being car-payment free for the last year or so has admittedly been really nice.

      Reply
  4. Jayson @ Monster Piggy Bank July 4, 2015 at 5:43 PM

    Congrats on getting a new car Erin. When I got another car, I felt accomplished because I managed to buy a car again and it’s just a proof that I am on track and have achieved one of my goals. Happy 4th of July! We’re just celebrating at home and I actually am excited to watch the news!

    Reply
    1. Erin M. July 5, 2015 at 5:42 PM

      I hope you enjoyed your 4th Jayson! As much as I don’t like the extra debt, we can afford the car, and in a weird way, it does feel nice to know we’re in such a position because of how we’ve been handling our money.

      Reply
  5. Tre July 5, 2015 at 6:09 AM

    I’m glad you opened a business account and are keeping those finances separate. Congrats on the car. Sounds like you made a well-researched purchase.

    Reply
    1. Erin M. July 5, 2015 at 5:40 PM

      Thanks Tre! Having the business account helps – it’s pretty motivating to see how much we’ve been able to save in a short time as we’re basically living off of one income.

      Reply
  6. DC @ Young Adult Money July 5, 2015 at 10:43 AM

    My wife and I both drove our cars into the ground (mine went past 225k, hers just over 200k) and we bought a couple of new to us cars about 1-2 years ago. We got five year loans on both of them at rock-bottom interest rates (I think it was like 2.25%) so i was happy with that, but it was strange to have car payments and didn’t feel as good as if they were completely paid off and/or if we had 100% of the cash sitting in an account that we could theoretically pay them off immediately if we wanted to. One was a 2011 Ford Escape with less than 30k miles and another was a 2008 Kia Spectra with about 60k(?) miles. The Spectra was about half the price of the Escape. We are happy with both cars but still can’t help but think about having that extra cash flow each month and how we could direct it towards other things. Oh well, one more reason to hustle ;)

    Reply
    1. Erin M. July 5, 2015 at 5:39 PM

      That’s exactly it – it stinks to have the payment added onto our student loans. We were making great progress and it kind of feels like we took two steps back. However, that payment will be easier to handle than the constant repairs we were expecting. R’s car definitely wasn’t a good value from the start. This is!

      And yes, it definitely provides more incentive to work and hustle!

      Reply
  7. Kirsten July 5, 2015 at 2:25 PM

    Here’s hoping I can follow in your awesome footsteps – next to nothing to at least a modest income in a year!

    Don’t fret about the car too much. It’s done. Now go out and conquer the debt.

    Reply
    1. Erin M. July 5, 2015 at 5:36 PM

      I’m sure you will! I honestly didn’t think I’d be able to do it even 5 months ago. It just takes some time.

      Yep, paying everything off is definitely the #1 priority.

      Reply
  8. Sarah July 5, 2015 at 7:46 PM

    I gotta say – Congrats on the car!!! I will admit I sometimes feel like I have to justify my purchases because I blog about personal finance…but the reality is, like you said, you can afford the car. Our only debt is our SUV and I constantly feel like I’m justifying why we bought it…but we’re happy with it and we can afford the monthly payment and that’s all that matters! You work hard and you’re working extremely hard to pay off debt…that’s what matters!! You definitely didn’t take two steps back :)

    Keep up the great work, Erin!

    Reply
    1. Erin M. July 5, 2015 at 10:44 PM

      Thanks! Yes, I actually felt uneasy about writing this post, and I don’t encounter that a lot when blogging, mostly because I’m pretty boring with my purchases. But I did find myself wondering why I felt the need to explain my rationale behind the decision when ultimately, it’s mine (and R’s) to make. I also think I was trying to work through my feelings on the purchase because I just don’t like debt, at all! Like you said, happiness does matter, and if you can afford it and you’ve thought it out, you shouldn’t really have to justify it.

      Reply
  9. Chonce July 6, 2015 at 8:22 AM

    Hope you had a great 4th of July weekend Erin! Sounds like you got a decent deal on the car though especially since your old was was having problems. I know what you mean by it being hard to find cars with low mileage at a decent price. I lucked out when I bought my car with 74k miles for just under $11,000. It’s got about 100k miles on it now already but it’s working perfectly fine with no issues and I’m hoping to keep it to 200k or more.

    Reply
    1. Erin M. July 6, 2015 at 10:16 AM

      Thanks, I hope you did, too! Yeah, I definitely got very lucky with my car, which is why I’m in no rush to replace it. I haven’t had any major issues with it thus far, so if a few things start going wrong, I think it’s worth “investing” in it to keep it running for as long as possible.

      Reply
  10. Shannon @ Financially Blonde July 6, 2015 at 10:25 AM

    I can definitely understand your ambivalence around the new to you car, but as you said, you didn’t jump into the decision and you put a lot of thought, effort and planning into it. We had a great 4th of July weekend. I have been stressed with a number of work related challenges, but I actually took most of the weekend off and enjoyed my family and I’m glad I did.

    Reply
    1. Erin M. July 6, 2015 at 3:38 PM

      I’m glad you took some time off! I think we’re all a little guilty of working too hard. Sometimes we just need that time away to recharge and reframe challenges. We took a spontaneous trip to visit my parents and enjoyed it.

      Reply
  11. Melanie @ Dear Debt July 6, 2015 at 1:47 PM

    My boyfriend needs a new car soon and it’s a constant source of stress for us. I want him to buy an old car for 3-5k, but he’s looking at 8-10. Ugh, just thinking about it stresses me out! At least now you have a car and can focus on other goals. Nice work on focusing on your student loans! Hope you had a great holiday too, friend!

    Reply
    1. Erin M. July 6, 2015 at 3:33 PM

      Sounds exactly like what we went through! I do have to say, ultimately, peace of mind won out. R’s old car had so many issues. If it wasn’t one thing, it was another. Having a car payment can be just as bad dealing with constant car repairs. I hope you can find something decent for less!

      Reply
  12. Melissa July 6, 2015 at 11:19 PM

    Erin, stop being my twin! :) B just got a “new to him” car (a 2013 Passat, so same year as R’s!) and, while I hate the added debt, everything is in his name, he has a great repayment plan in place (he’ll have it paid off in less than a year!), and the car really is a HUGE improvement from his previous, unreliable car.

    Sometimes you just have to do the safe thing and get a new-to-you car. My car is almost 10 years old and has well over 100k miles on it, though, so I have a feeling that’s next! :-/

    Reply
    1. Erin M. July 6, 2015 at 11:31 PM

      Haha, too funny! We saw a Passat on the lot, it was way out of our price range, but they are very nice. Being able to pay it off within a year is amazing! I wouldn’t feel so bad if that were the case. Aw, I hope your car lasts for a while still! I plan on babying my car now because the last thing I’d do is replace it at this point. I definitely don’t need anything fancy when I barely drive. ;) It is crazy to think my car is 13 years old when it still feels newer (to me). I can’t believe I’ve had it for 6 years now, wow!

      Reply
  13. Done by Forty July 7, 2015 at 5:07 PM

    It’s funny how debt can be motivating. We were never as serious about paying down debt as when we got our first mortgage. We hated it so much…and paid it off in under 3 years.

    There’s the math of personal finance, and then there’s the psychology. Who knows, maybe the car debt will change your mindsets and behaviors enough that you come out ahead.

    Even if not, you have a sweet Civic. I miss my old 97. :)

    Reply
    1. Erin M. July 7, 2015 at 11:01 PM

      At this rate I can’t imagine getting a mortgage. To be fair, motivation hasn’t been my biggest issue. I’m just a giant worry-wart when it comes to parting with a bunch of money. Combined with my lack of income this past year, I haven’t made as much progress as I would like.

      R’s the exact opposite and would empty his savings to get out of debt, but thankfully he enjoys having an emergency fund now.

      I do still like my 02. You’d think I’d be jealous of the newer model but *shrug.* It’s less complicated, and it’s a coupe! =)

      Reply
  14. Lisa July 10, 2015 at 2:44 PM

    I totally understand the debt guilt! I feel it every time I pay my monthly car payment. But I will say that I really like Hondas (I have an Accord) – they’re super reliable, so it shouldn’t give you too much trouble in the near future *knocks on wood*

    Reply
    1. Erin M. July 10, 2015 at 4:36 PM

      Glad I’m not alone there! Accords are super nice, I wish we could have found one within our price range. It’s insane how much Honda’s hold their value.

      Reply

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