Purchase Car or Wait???

[matey]

Tax time is around the corner and we are expecting a nice little chunk of money. We have talked about getting a new car (used) but I am wondering if that is a dumb idea. Both DH and I kinda feel like it may be a stupid idea, but I wanted to check here.

We have a 2001 Chevy Malibu and a 1995 (or '97, I never remember) Dodge Dakota truck. I got the Malibu from my dad and technically still owe $1500 on it, but he isnt pushing me for it or anything. The truck is paid off. Over the past year we have put a few hundred into the malibu and about $1500-2000 into the truck. It has had the engine rebuilt once several years ago and I think what we did this past year was another reconstuct on the engine, so technically the engine should be in good shape.

I originally thought we would replace the truck and then get something for DH that the whole family can actually fit into. DH does not want to sell his truck. Even though we have had repairs he says that it is good to go now. It take a half hour for the heat to work so he never has heat, the speedometer doesnt work, I think the gas gage doesnt work, the radio sometimes works, no idea how many miles are on it because that doesnt work either. It is just a beat up truck. And, of course, the family can't all fit in there. DH carpools to work so he doesn't use it everyday and when the weather is nice he likes to ride his bike.

The Malibu hasn't had anyreal problems lately. We put $900 into in a couple years ago for some gaskit issue. It has 113,000 miles on it. If I sold it I would need to pay my dad what I owe him. I just don't see the point in replacing the malibu.

I worry that the malibu's luck will run out during a time when we don't have money, leaving us with just the truck. We would need to find something fast. That is why I thought push DH into the malibu and get me something else.

Am I just being a worry wart? Should I just assume everything will keep going fine? We live on a low income, and have little in savings. I do plan on building that up and we were talking that if we dont purchase anyting new to put a big chunk on of the tax return to the side for car repairs. Is this the better plan? Is there a better way to do this? I have never bought a car and know nothing about how all of that works, so maybe I am getting ahead of myself and my car will be fine?

Even in writing all this I think, the car is fine!! You're crazy!! But I want to hear other people's thoughts.

[crazyms]

Well here's my 2 cents. We just had the same debate. My car is fine but dh's truck was getting past it's prime and of course couldn't fit the entire family. Our options were finance a new truck, buy a used truck, or keep dh's and switch the body on it to extended cab (we already had the other body) and do repairs to it. We chose to keep dh's truck, switch the body and make the repairs. My logic was: a new vehicle cost so much that it isn't worth the cost.  A used truck is a lot cheaper but we'd spend a few thousand on the truck and then still risk something going wrong with it and needing repairs. It is used afterall. So we decided to keep our truck, switch the body to be able to hold all of us, and put money into repairs. I figured even if we put a few thousand into repairing the old truck at least we will have all those parts new and know what is/could go wrong with the truck. 

[LifewithSage]

If it were me, I would bank the money since the cars are working for now.  If there comes a time when one of the cars needs a major repair and it seems prudent to buy a new car versus repairing it, then I would take the money out at that point and use it then for the purchase of a new vehicle.  In the meantime, you'll have a bolstered savings account JIC something goes south one month.

[matey]

One issue that has come up with banking it is that we are on food stamps. They ask how much is in your savings and if you have too much in savings, they drop your fs, fromwhat I understand. But, at this point, the fs are really keeping us a float so I don't want to lose them. I asked my case worker one time what would happen if our tax return was still in savings at the time of renewal and all she said was "Most people have it spent pretty quick" which wasn't a real help. Then she said we could deal with it when the time came, which I think was her way of saying I wouldn't be able to save it.

I do have a few things I need to do with some of the money, get an eye exam, maybe get trim put in our kitchen (been wanting that for ummm, 5 years or something), maybe go to the dentist. There would still be a lot left though and I know it would exceed the amount fs allow.

[Vaske]

If I were you, I would pay my dad back.  That gets the money out of your account, and clears off the debt while you figure out what is the next goal.

[matey]

There's no real pressure to pay my dad back. In fact, I think he would refuse it.

Aside from the bank balance issues, I would still like to hear opinions on the car situation.

[aek]

I don't really see a need for an "old new" car for you. You may think the Malibu may break but since you are not planning on buying a brand new car - your new old car may break as well at some point in the future. With this one you at least know it's history. I say keep your car and take out cash from your savings - just keep some cash in the house. This way you will have cars, money and it's not going to change your fs situation.

[MCsMom]

I'd pay your dad back as well.  If he refuses it - I'd tell him it was OK, about the food stamp issue, and if he still refuses it and tells you to spend it on the other things, then fine.  But I think ethically, you really need to pay your dad back or offer, and then if he declines the debt is over and it was a gift and you can do what you wish with the car situation.

Then, personally, I would probably try to hold onto the money for car repairs or for if/when the car really broke go buy another one.  Is it the having it in a savings account the issue?  Do they ask how much cash on hand?  I'd probably cash it and put it in a 'safe' place if the food stamps does not ask about cash, only savings.

[matey]

Thanks everyone. Maybe it would be good to get that monkey off my back and talk to my dad about repayment. I think you guys are right, new used car would be silly at this point. The good part is at least I will get to have new glassses! Yippee!

[ilovemygirl]

I agree you should work out with your dad whether you owe him or not. I also agree that you don't need to replace your car if there is no reason to.

However, two things stand out to me here. The first is that you feel like you need to spend the money and not put it in the bank. The second is that you might be better off being a one car family. If your dh is carpooling and biking there is no need for him to have a car at all. 

You could trade in both the van and the Malibu and use the cash to buy a "newish" used car that will be reliable for several years to come. It would solve all your immediate concerns, you wouldn't be adding a car payment, you'd have peace of mind for both reliability and safety and and you hopefully wouldn't have to worry about repairs for quite a long time depending on the condition/age of the car you buy.  

[zebra15]

Can your dad 'hold' your IRS refund until you need it.  That way its not in your account but its still accessilbe to you should an emergency arise.  Im not a huge fan of having actual cash just laying around the house.