I will try not to make this too long. 6 years ago our car died and my husband insisted on buying a new car. I have always hated having a car payment. It ate up a huge chunk of our income, and now that we homeschool, only having one car has been hell because it means we are stuck in the house unless I want to get everyone up at the butt crack of dawn to take dh to work so we can have the car. And it doesn't always work out because our activities are during times that he has to be picked up. So we have missed out on a lot.
The car is finally paid off and I need to get a second car so I can get the kids to their activities. We have a baby due in August and so this second car needs to be a van in order to fit everyone comfortably. $150 per month is the max I'm willing to pay per month for a car payment. That means that I can get something for $7000 maximum.
My dilemma is this. We just got our tax refund back, so we could pay cash for a car up to $3000. I need advice on weather to buy a cheap car for cash, or buy a more expensive car and have the payment.
We can easily afford the $150, but I would so much rather not have a payment at all. My concern is that I will end up breaking down (which I especially dread with a newborn) and have to dump a bunch of money into the car. On the other hand, there really isn't a huge variance in mileage between the vans that cost $2-3000 and the ones that cost $6-7000. So there is no guarantee that I wouldn't end up dumping a bunch of money into it anyway, and then I would be stuck with debt and a payment on top of that. The only thing about the more expensive ones is that they will likely have some kind of warranty, and maybe (?) a better chance of not breaking down.
So what would you do? I have been agonizing over this. Any advice would be greatly appreciated.