What should we do about our car crisis

[junipermuse]

So my husband and I each had our own cars when we met nearly 10 years ago. We've been really lucky in that we haven't had a car payment during our entire marriage. Unfortunately we were foolish and didn't really plan well for the day we would need new cars. Sadly this week our luck ran out. Last Friday I got in an accident with my car and it's a total loss. We'll be getting some small amount from the insurance company but not much. Probably between 1K and 2K dollars. On Wednesday I was driving my husband's car and the engine died. We took it to the shop and they say the entire engine needs to be replaced. It's 3K+ worth of work and the car isn't even worth that much. So now we have no cars. We have been driving my husband's boss's car since Wednesday, but it's his only car so we're giving it back today and we'll be getting a rental for the weekend, but that's only a band-aid. What would you do if you were in this situation?

[pbjmama]

Can you buy one car and manage? Give yourself the weekend to get a good start on looking. Make a budget to figure out what you can afford. Go to the bank and get approved for a loan and figure out what the payments will be if you spend 4k, 6k, 8k, whatever. Price everything, drive stuff, don't commit.
How is your credit? I'm seeing about 4% on cars around here.

[redvlagrl]

Oh man, what bad timing!!

When I was single I had a beater ($700!) and it was great. I loved not having a car payment. I swore I wouldn't ever had one.

After we got married and moved to Canada we really needed a car and, like you, didn't have funds to buy anything outright so we borrowed to get a new car. HUGE mistake.

We have a cr payment and it totally sucks. We shouldn't have bought a new car but the interest rates were a lot better (0.9% from dealer as opposed to 15% for bank) so we did.

So as I see it, viable options would be:

-try and borrow $2k (find out how much you'll get back in insurance from your wreck) from relatives etc and buy a beater. Pay them back when you get your insurance money. Save up what you'd be paying on a car payment in the meantime and when the beater dies then pay cash for a car

- Get a loan for the balance of the cheapest car you think will do in the medium term- $5k? So you'd be borrowing only about $3k? Try and do as short a term as you can afford because you don't want to be paying off the car if it dies.

Hopefully you can manage with one car in the medium term. otherwise buy one beater and one almost beater and borrow the least amount you have to.

The car payment really sucks. I would do almost anything to get rid of mine, only we are now right side up and the car is still good so it's worth it to just pay it out now and drive it into the ground.