Update in posts #11 & 12
I'm not expecting anyone to actually decide this for me, but I'm wondering if maybe people have some ideas that we haven't thought of yet ourselves, so here goes:
We bought dh a new (used) car in January. It is a 2008 Mazda with low miles that we paid about $10,000 for (cash). It is a salvage title, which we knew when we bought it. The dealer we bought it from is one that buys and repairs salvage titles. According to the dealer, it was in a collision with damage to the front right side, but no engine damage. They did body work on the car, but nothing else. Shortly after buying it, dh felt something was off with the suspension, and we had the right front strut replaced. We took it to a Mazda dealer for this. They wanted to replace all the struts, I think, but we couldn't afford that. Also, the tires were basically bald, something we somehow failed to notice when we purchased it, so we got new tires at that time, too.
Fast forward to about a week ago - dh was driving the car home from a business trip, and the A/C quit running cold. Then he noticed the car overheating, so he slowed down (hindsight being 20/20, we both wish he'd pulled over at that point!). Eventually, the temperature gauge dropped to zero, the car sputtered, and stopped. Couldn't be started again. It was towed to a local shop, and the coolant tank was empty. The couldn't get the car to start at all there, either. Their guess was that it had a blown head gasket and needed a new engine. My dad and brothers drove out and picked up dh and his car and towed it back home (he was about 100 miles away). We took it to a Mazda dealership, which said basically the same thing as the other shop - needs a new engine. (Not to mention some cooling repairs, but I don't think they messed with that much since the engine won't run.) I may have some of the technical details wrong, but I know the bottom line is essentially that it PROBABLY needs a new engine, and it would be rather expensive/time-consuming to take the engine apart in order to be 100% certain that's what was needed. Not something anybody's going to do for free.
To get a brand-new engine installed, the quote is about $7k. A used (or rebuilt, or something) is about $5k. This does include labor, but I don't think it includes fixing the cooling system. The thing is, because it is a salvage title, we would get NO warranty on it. Nothing. So if we drive it out of the parking lot and it explodes again because the mechanic dropped his bubble gum in it, we'd STILL have to pay for repairs.
Options we've thought of so far:
- Sell the car for what we can get for it (probably very little) and buy a new (used) one
- Get the used engine installed by the dealership (I think dh is too daunted by the cost to even get other estimates, so there is a chance we could do this option a little cheaper elsewhere)
- Try fixing it ourselves, or at least figuring out if it's fixable ourselves
- Sell the car and live as a one-car family
All of these options have SERIOUS drawbacks, such as:
Option 1: We would basically lose the $10,000 we spent on the car - I can't imagine us getting more than $2000 for it in its current state, and I think that might be overly optimistic. We can't afford to pay cash for anything other than a complete beater, which means either taking a large risk of the 'new' car breaking down, or taking out a very sizable loan, which we don't want.
Option 2: We can't afford this, either - we would have to see if the dealer did financing, or try to borrow money from family. Which is probably possible, and probably (though not certainly) would not involve much drama, mostly just seriously wounded pride for us (especially dh). And we are totally out on a limb with the new engine - this could happen again. It's possible the accident it was in prior to our owning it has caused some subtle structural damage that could mess up the new engine, too.
Option 3: Honestly, I don't know if we can afford this. It would require a lot of tools we don't own, some of which are pretty pricey (like an engine hoist!), and a LOT of time - which dh does not have. Nor does dh have experience doing much beyond oil changes in a car. He's a smart guy, and an engineer, and knows a fair amount about engines, but I think he would be in way, way over his head on this. He could spend countless hours and dollars on this option, and end up making things worse or making no progress. It would probably mean a month or more with no second car (obviously the lack of a second car is an issue for some period of time in all scenarios). Oh, and did I mention I'm 37 weeks pregnant? So that means our already limited time to prepare for this baby would basically become nonexistent in terms of dh practicing relaxation with me, making decisions about baby stuff, etc.
Option 4: We were a one-car family from August of last year till January of this year, due to dh traveling so much for work. But he doesn't travel so much any more, so I would need to drive him to and from work every day (only about 15 minutes each way, so not terrible), or not have a car. This wouldn't be half so big a deal if we weren't about to have our first baby. But I don't know that the baby's schedule is going to cooperate with me being a taxi service, and I would feel nervous at home with a new baby and no way to get to the hospital, or grocery store, or anything. (And also probably bored and stir crazy, but that's another matter.) Maybe if it wasn't my first I'd be more confident about it. And my car is not exactly 100% reliable at this point, either, mostly just due to age. We don't live anywhere even mildly public-transit friendly. There is no way for dh to take a bus to work, and it would probably be extremely hazardous (not to mention time-consuming) for him to bike - and we'd have to buy him a bike.
For the record, we could probably scrounge about $2700 in cash from our bank account for whatever option we choose. We've been sort of doing Dave Ramsey (sort of, because dh has never been wholly on board with it, especially the emergency fund part), so we have no debts at all. We would desperately like to keep it that way. We have only one income, and not any real way to increase that, other than waiting for the end of the year, and hoping dh gets a raise. Which he probably will, but it will probably not be large, and we are adding a baby, so our expenses are about to go up, anyway. We've been working on saving money for the baby, and fortunately we should only owe a few hundred dollars to the midwife after delivery, which is money we already have saved. In fact, extra money saved for that purpose will almost certainly go to help with the car situation, along with our entire emergency fund of $1700. We don't have any assets to speak of. We rent an apartment, and next to our cars (mine is a 2001 Camry, so not exactly a gold mine), the only things of any significant value we own are our computers.
Things are seeming painfully bad at this point - the only think that's kept it manageable is that dh has been traveling for work this week, so we haven't needed his car. But he spends basically every free minute obsessing about it. So does anyone have any creative solutions we haven't thought of yet? Or any pros/cons to add to the options we have thought of?
Edited by monkeyscience - 5/31/13 at 12:38pm