What to do (car troubles)??

[Stayseeliz]

We have no car payments right now. We own a minivan and a Kia Sportage which DH drives back and forth to work. The Kia was given to us 2 years ago. It cost around $2k.

The Kia is in the shop now "early" estimates are around $350-400 which is doable IF what they think is wrong is indeed the problem. Another figure thrown around today was $1500 for a new engine which we don't think we'll be doing. Even the mechanic said the car wasn't worth it.

We have the money to fix it if it's in the first range. The most we're willing to spend on it is $500 if that will keep it in good repair for quite awhile.

If it's going to be more than that we're thinking about looking into getting a used Toyota Tercel for DH to drive back and forth to work. We can get one with around 80k miles or less for less than $3,000 (payment would be about $99 a month). We used to have a Tercel and it was the BEST car but it got smushed by a tree during a windstorm!!

The issue is that we don't have $3k right now to pay out of pocket. We're thinking about financing it (which I hate) and paying it off with our tax return. I can do without a car for awhile but DH works long hours and I'm pregnant and need to get to dr's appointments. There is also nothing within walking distance of our house. So I have to do all errands (groceries, bill paying, etc) after DH gets home which is getting old.

Any advice? I hate the thought of having a car loan. I'm trying to tell myself I can live without a car for a year..But the thought makes me unhappy!! We homeschool and like to get out for fieldtrips, etc...

[Mama Dragon]

What is the problem with the car, that's more telling then anything, at least to me (wife of a mechanic)?

[UberMama]

Ditto Amy, even about the mechanic DH.

Have you gotten quotes from other places on the vehicle needing repaired? Some garages will offer you quotes for free (as they should, but not all do..). I'd shop around a bit, if you can.. is it driveable?? Or does your DH have friends who work on vehicles? My DH has repaired vehicles for friends and family for the cost of parts only.

[Herausgeber]

Not car related, but something I think is important nonetheless: STOP getting a tax return. If you are getting money back every year, you're overpaying. Adjust your withholding to keep that money in your paycheck now. This is always a good idea, but it's especially so if you are in any sort of consumer debt. Why let the government keep your money all year without paying you interest while you pay out interest on your car loan?

[kamilla626]

If you have no other way to get the car fixed, this website might be helpful.

I've never used the program before, but I've bookmarked it! Spend some time at "Browse Applications".

http://www.modestneeds.org/

[ShaggyDaddy]

Originally Posted by Herausgeber

Not car related, but something I think is important nonetheless: STOP getting a tax return. If you are getting money back every year, you're overpaying. Adjust your withholding to keep that money in your paycheck now. This is always a good idea, but it's especially so if you are in any sort of consumer debt. Why let the government keep your money all year without paying you interest while you pay out interest on your car loan?

I see this advice thrown around ALL the time on every financial board I have ever been to. I just want to clarify that what is right for some might not be right for others...

1) there are instances where you could get a tax return and withold ZERO from your paychecks... Earned income credit, tax credits, etc.

2) although it is easy for some to save $125 out of each paycheck, most people who struggle with finances can/would do better with a $3,000 check in february

It is not ideal to store your money in an interest free account, but it is a whole lot better than owing money you don't have, or never saving a dime.

Personally my income tax returns have been anywhere from 300-$14,000 (yes 14,000 but that will be a special circumstance) I make ~10% annually on all of my investments, yet I still choose to withold as if I was a single non-home owner with no kids. It has saved us before from having sudden and overwhelming tax liability because of an employer miscalculation... It gives us an annual "Boost" that we just can't seem to come up with any other way.

Of course we are trying to work toward a better budget with a better savings plan, but in the mean time... I let the government hold on to it because I just won't.

[Knittin' in the Shade]

I would not finance another car - I'd really try to find one that you could afford cash. You can get a beater for $500 or 1K. $3K for a car with 80K miles on it seems awfully high to me.

[MommaCrystal]

I wouldn't finance another car either, at least not immediately. Maybe you can compromise and wait a few months. Yes that car you talked about won't be available but something else will be. You take that $500 you have now that could go toward car repairs, reduce what you are having withheld in your check for taxes, plus save up what you WOULD spend if you had a car payment. By then you could at least $1000 probably $1500. So may If at THAT point you have to finance something you'd be financing HALF of what you originally thought and you can make double payments and get it paid off lickety split.

Then take all that extra money and put it in an emergency fund so you won't be in such a jam next time.

[Stayseeliz]

We totally and completely trust our mechanic. He's worked on our cars for a long time and has even done some things for free. We don't have any "friends" who fix cars unfortunately.

Right now it needs a new radidiator. That is going to be $210. We have to pay another $75 for having it towed from another city as DH was as far away as he ever gets to us when it broke down. And then he said something was cracked yesterday on the phone. I couldn't hear because I was in the car and the kids were being loud. He said he's going to put the new radiator in then go from there. He knows to call us before he does anything.

We do have an emergency fund of $1000 per Dave Ramsey. That's why we're not totally panicked yet. I really really really don't want to finance a car. But I don't know how to get by without a car for another 6 months to a year. I literally can't get to my dr's appointments with DH working and we have no one to ask for rides and no public transportation.

This is frustrating!!!

[Herausgeber]

Originally Posted by ShaggyDaddy

I see this advice thrown around ALL the time on every financial board I have ever been to. I just want to clarify that what is right for some might not be right for others...

1) there are instances where you could get a tax return and withold ZERO from your paychecks... Earned income credit, tax credits, etc.

2) although it is easy for some to save $125 out of each paycheck, most people who struggle with finances can/would do better with a $3,000 check in february

It is not ideal to store your money in an interest free account, but it is a whole lot better than owing money you don't have, or never saving a dime.

Personally my income tax returns have been anywhere from 300-$14,000 (yes 14,000 but that will be a special circumstance) I make ~10% annually on all of my investments, yet I still choose to withold as if I was a single non-home owner with no kids. It has saved us before from having sudden and overwhelming tax liability because of an employer miscalculation... It gives us an annual "Boost" that we just can't seem to come up with any other way.

Of course we are trying to work toward a better budget with a better savings plan, but in the mean time... I let the government hold on to it because I just won't.

If it's a discipline issue, why not just have the money taken out of your check automatically by direct deposit? I dunno, I guess I just don't see the benefit, especially if you are paying on high interest debt. It can be incredibly damaging to your networth in the long run.

And most tax credits can be accounted for as well. I know I account for the child tax credit when estimating my own taxes. And EITC is refundable in your paycheck. Honestly, I wish they would make it the default for low income workers to take the EITC in their checks.

[CarrieMF]

IF it is going to be more than the $500 to fix the car then I would finance the toyota. The toyota is going to last much much longer than the Kia. At 80,000 miles it isn't even broke in yet. Take the $500 that it would be to fix the kia and put that down on the Toyota. Then you'll only have $2500 to finance. You may even be able to sell the kia for something. If you can afford it make larger payments than the $99/month and make sure you stick with your plan on paying it off with the tax return. It is less than a year before you'll have your tax return. With your current situation you can't be without a vehicle.

[Mama Dragon]

I'd fix it. Find out what was cracked, if it was a radiator hose, it could very well be why your radiator went to crap. Good to hear about the emergency fund - I'm not disciplined enough yet!

As for the tax refund, for us = Earned Income Tax Credit We always get one back (I'd prefer DH worked enough that we made too much for EITC, but oh well!)

[lightheart]

Originally Posted by Stayseeliz

But I don't know how to get by without a car for another 6 months to a year. I literally can't get to my dr's appointments with DH working and we have no one to ask for rides and no public transportation.

This is frustrating!!!

I truely know where you are coming from, pregnant baby #2, we were down to 1 car, I was having to get up at 4-5 am and riding with DH to work so I could have the car for the day to get to appointments then having to find something to do cheap/free for the rest of the day with a toddler until he got off at 3, then the hour and half drive home... sucked and I was out of my mind. we finally bought a second vehicle to replace mine, took about 4months though before we bit the bullet and spent the money on a second car, talk about freedom, we did have a car note for a while but was worth it for us. We paid a little extra for the car in the long run... but we looked at the total cost of the car with intrest when we figured whether the car was worth it or not, I have no idea if the tercel you are looking at is worth... good luck!

[sweetfeet]

Originally Posted by Synthea™

I'd fix it. Find out what was cracked, if it was a radiator hose, it could very well be why your radiator went to crap. Good to hear about the emergency fund - I'm not disciplined enough yet!

As for the tax refund, for us = Earned Income Tax Credit We always get one back (I'd prefer DH worked enough that we made too much for EITC, but oh well!)

You can get that back throughout the year in your paychecks. It's the advance EITC. I can't remember which w form to fill out but have your dh ask HR about it if that interests you.

[mmace]

I see this advice thrown around ALL the time on every financial board I have ever been to. I just want to clarify that what is right for some might not be right for others...

Thank you! Thank you! Thank you! I mentioned my tax return on here a few times and got the old "helpful" advice telling me that I shouldn't get one, interest free loan to government, yadda, yadda, yadda a bunch of times, and it really burns my britches! Unless you're living my life, please don't try to tell me how my finances should be organized! For what it is worth I'm a single stay at home mom. We survive on child support, rental income and the money I make cleaning our church. Less than $2k a month for myself, three kids, with a $975 mortgage. It's tight - but we're happy! BUT since we are separated and not divorced (going on four years now) my X and I still file married/joint return. He withholds as a single with zero dependents, and the tax return this year was just over $8k. My friend does our taxes for us, and I'm sure you can guess whose bank account the return was direct deposited into. Not his, that's for sure! That money makes a *huge* difference for me and the kids every year, but you can be darn sure that if he changed his witholdings we would not see an extra dime of it. So please, Please, PLEASE *don't* give financial advice unless you truly know the entire story!

Okay, sorry OP - - - I went off on a tangent there, didn't I!?! Good luck to you in getting your car fixed!

[skueppers]

Originally Posted by Herausgeber

If it's a discipline issue, why not just have the money taken out of your check automatically by direct deposit?

Because if the money is in a savings account somewhere, you can still spend it throughout the year when you come up with "emergencies" which require it. If the government is holding onto it, you're guaranteed to get a lump sum once a year, which a lot of families seem to find very helpful.

Plus it makes filling out your tax returns something to look forward to, rather than a horrible chore that might cause you to suddenly owe the government $1000 that you don't have.

Personally, I try to organize my taxes in such a way that I receive a small refund back, rather than owing money. I know the smartest thing financially is to set it up so I'd owe them money, but I hate having to dig into my savings to pay the tax bill, so I err on the side of caution.

[skueppers]

Regarding the car issue, is there any way you could drive your husband to work some of the time, so you'd have a car on those days? That's probably what I would do if my car died in a way as to make fixing it impractical, and I couldn't afford to replace it right away.

I just spent more than $1500 fixing one of our cars, so I feel your pain.

[Emmeline II]

Originally Posted by mmace

So please, Please, PLEASE *don't* give financial advice unless you truly know the entire story!

Two things:
1. This is the Frugality and Finance board; advice given is likely to fall into one of those two catagories (but it is advice, not a court order ).
2. You never know the entire story.

[mmace]

Two things:
1. This is the Frugality and Finance board; advice given is likely to fall into one of those two catagories (but it is advice, not a court order ).
2. You never know the entire story.

Okay - how about this then: Please don't give me advice *when I didn't even ask for it* especially when you don't even know half of the story!

(Again: My story was *not* directed towards anything anyone said to me on this thread, it was a general rant that was a take off from another post in this thread!)

[Herausgeber]

Hey, arrange your finances however you want. It just seemed obvious to me that if the OP was concerned about financing a car, with a loan that she intended to pay off with an anticipated tax refund, that she could get her hands on that money now and pay even less in interest. Or heck, maybe not even need to borrow money at all if her family is overpaying its taxes by enough.