Advice Request - Buy New or repair

[ravichr]

I currently have about $12000 on credit cards and the same amount as savings in a bank. Rent an apartment. Have 2 cars. The older of the two is giving trouble (2000 Honda Civic it has 187000 miles) on it. Of late I have been spending a lot to maintain it.

Now my wife and I are interested in buying a home, but we are saving towards a sizeable down payment. But now that my car is giving me trouble, I'm not sure if I should buy a new one or keep repairing the current one.

My concern is the economy and I do software contracting jobs. Just worrying about what if somnething goes pear shaped with my job. Any advice is greatly appreciated.

[bjl584]

About how much are you spending a month to keep the car running?

You said you have about 12K in savings for a house. Do you have any other money saved?

[maat55]

If you are saving faster than the repairs I would keep the car. Do you work on it yourself when possible?

The last thing I would do is jump into a new house and car at this time. You need a 20% downpayment(which means you will like have to shop for a less expensive house than you can a fford) and an emergency fund in place before you buy. Be patient.

[Gary Barzel]

If the car is giving you lots of trouble, I'd suggest you speak to a local dealer, try to work out a deal on buying a used car for a much better rate in exchange for your old car.

[MonkeyMama]

It depends on the car and how expensive the repairs are. Odds are it is probably much cheaper to just keep fixing the car.

Of course, the answers don't have to be so black/white. Could you live without a second car? A really good compromise is to just buy an inexpensive/used car. A reliable/safe car should cost no more than a few thousand dollars.

Buying a *new* car will significantly delay your home savings pace.

[Nightfly]

Hondas, even ones with the kind of mileage you list here, seem to get decent prices from what I see on classified sites. Also right now: used cars are going for a premium vs. even a year or so ago. If you can get the car driveable so that you can sell it, then be up front about its problems with a potential buyer - it might be time to dump it.

I would avoid buying new for now. Try to sell the Honda first, then look for a $4-5k used car with below 100k miles in good condition (they're out there). I recently purchased a 2000 Toyota Solara for exactly 5k that looks great and runs like a top. What I sacrificed in the age of the car I gained in low mileage - under 90k miles which is decent for an over ten year old car. Get your wheels situation straightened out, then go back to concentrating on saving for the house down payment. Home prices aren't going up any time soon (despite the "urgency" that the real estate industry is trying to shove down the public's throat right now). The inexpensive homes are going to be around for a long while IMHO.

[disneysteve]

At 187,000 miles, even the best of cars will start giving trouble. I'd be looking to do as Nightfly suggested. Sell the Honda and replace it with something with much lower mileage, like under 100K, which should only cost you about 5K. Pay that with what you get for the car plus the rest from savings - no loan.

[cypher1]

Just curious, whats the issue with the Civic? I'm driving my 97 DX hatchback with 170k, getting 37-40mpg, so its hard to pass up, even if doesn't have all bells and whistles. Those cars are some of the easiest to work on, parts readily available, typically less expensive to maintain.

[Petunia 100]

I'm wondering about that credit card debt.

What sort of interest rate(s) do you have on that debt?

I would not want to buy a home with so much credit card debt. Pay it off first.

[bjl584]

Originally Posted by cypher1

Just curious, whats the issue with the Civic? I'm driving my 97 DX hatchback with 170k, getting 37-40mpg, so its hard to pass up, even if doesn't have all bells and whistles. Those cars are some of the easiest to work on, parts readily available, typically less expensive to maintain.

I don't think that the issue is with the Honda Civic. I believe the concern that was raised had to do with the high mileage that is on the vehicle. OP said that the car is costing him significant money to keep running. (He hasn't been back to respond to any of the comments, so we don't know how much money it is costing him.) But, it is costing him money none the less. Many are suggesting that he get rid of the car in favor of something that has lower miles on it and hopefully less trouble and repair work.

[cypher1]

Originally Posted by bjl584

I don't think that the issue is with the Honda Civic. I believe the concern that was raised had to do with the high mileage that is on the vehicle. OP said that the car is costing him significant money to keep running. (He hasn't been back to respond to any of the comments, so we don't know how much money it is costing him.) But, it is costing him money none the less. Many are suggesting that he get rid of the car in favor of something that has lower miles on it and hopefully less trouble and repair work.

I'm not questioning the fact of a high mileage car will have a much higher risk of cost to maintain that vehicle. If the owner can afford selling and getting something for lower mileage, then by all means go for it. But if it's a repair that costs $100-200 and allows them to continue saving/research for something newer, vs buy newer car right away, I'd reconsider. Now if its a major repair, then yes, dump it now.

[bjl584]

Originally Posted by cypher1

I'm not questioning the fact of a high mileage car will have a much higher risk of cost to maintain that vehicle. If the owner can afford selling and getting something for lower mileage, then by all means go for it. But if it's a repair that costs $100-200 and allows them to continue saving/research for something newer, vs buy newer car right away, I'd reconsider. Now if its a major repair, then yes, dump it now.

I agree. Without knowing how much a month it costs to keep the car going though, it's hard to give advice. OP hasn't been back to reply yet.