Help! We are quickly becoming a two car family!

I need your help!

In case you haven’t heard, my wife is pregnant again. That brings our family member count to 5, which meets the limits our Toyota Corolla can handle. But the fact that both of our current children as well as our future child are all in car seats, which take up more space than the average man, makes our car only suitable to hold four meaning we need an upgrade.

So we are on the search for another vehicle. I bought our Toyota brand new when I was young and stupid, and although I have never regretted the purchase as it’s been a major blessing having a car with no issues, I want to try and be smart with the next purchase and save some money.

I consulted the Car Negotiation Coach and got some awesome advice and tips to try, but most of them applied to buying from a dealer which I’m just not sure we want to do. I see the value in buying a NEW car, but I don’t want to get a loan, or drop that kind of cash. I would love to try and follow the 1/10th rule, and not buy a car much more than 1 tenth of our annual income, but we need a bigger car before February! Whatever car we buy, we do intend to make the best financial decision we can in the situation and we will make sure the vehicle will last at least five years if not longer. (Our Toyota will be six in 2011)

So below, I have written up the choices I have come up with. I need YOUR help in deciding which one is the best choice!

  1. We can buy a new van from a dealer. The reason I even consider buying a new car is that I value the safety, as well as the convenience of owning a new car. In most cases, you won’t have any issues with a new car for the first 100,000 miles. My Toyota had 3 miles on it when I bought it, and it now has 90,000; I have never had a single mechanical issues. The most expensive thing I ever had to pay for was new tires. However, I do not like the idea of financing a new car. I know much more about finances than I did when I bought my Toyota, and the cost of financing a $30,000 car loan is painful to think about. We have enough cash to put a good down-payment on a car but even if we paid half of a brand new car, we would still be in a loan for at least $15,000 or so, at 4-5% interest. I don’t think I can handle that..
  2. We can buy a used van from a dealer. I had thought long and hard about getting a used or even a certified pre-owned van as this way we would be able to get a newer van, at a slightly lower cost, and still have a dealer to back us up and provide a warranty if the van is certified. I feel safer about having the van be certified because you never know what a previous owner has done to their car. I also like the fact that if you buy from a dealer, you have a bit of time to get out of the contract if you get the van home and find a dead body in the trunk. I still would be stuck with a payment, and even for a van that is five years old, getting a loan just doesn’t feel right.
  3. We can buy salvaged. My in-laws buy and sell salvaged vehicles as a side business. They have certain repair guys that do a great job on salvaged titles, and they drive them for a few months before selling them. They have never had any problems with them as they know what to avoid when buying them. This option would be much cheaper, we could still get a safe, newer car and avoid the headache of a loan (banks won’t give loans for salvaged titles anyway!). On the other hand it will take longer to find a suitable salvaged van and I may have to travel even to another state to pick it up as the market for them is much smaller than general car buying. A salvaged title could also potentially be less safe, have more problems and cost us in the long run.

Either way we go, I think we have decided on selling my little Toyota. I love my little car, but in reality, the time has come for me to move into a van and ditch the sporty small car. I have a family now, and that’s just how life goes. I’ve made my peace with it and it would be the best financial decision regardless of which van option we choose.

By selling my car, we have the potential to break even with the van purchase, depending on the option we choose to go with. I may in the end have to buy a second car to get to and from work (which would be a much cheaper, beater car), but I will exhaust all my other options before that point comes.

I appreciate any feedback you can give me. What makes and models of family vehicles have you owned? Did you buy new or used?

PS. Yea, that’s me sittin’ in a Corvette!

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14 People have left comments on this post



» Jesse MichelsenNo Gravatar said: { Aug 6, 2010 - 03:08:35 }

Thank you Yana! Personally, we really do like Toyotas, and try and stick with Japanese made cars as their value holds so well (even after Toyotas recent problems).

You have far more experience than I in this area, and I think I will take your lead, and at least thoroughly test drive a bunch of cars before making any decision. I wouldn't have even thought about testing the AC in the back or testing the defrosters had you not mentioned it.

I actually really wanted a Subaru when we started looking casually earlier in the year. I really liked that they have four wheel drive, aren't gas hogs and didn't look so much like a family wagon..but alas, most of them only have four seats even though they are quite roomy. Some do have a middle seat in the back versus just two captain seats, but they aren't much larger than the Corolla so I don't believe three car seats would fit. I may do some test drives with them though, and my boss has one so we can take a closer look sometime.

Thanks for such great insight!

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» YanaNo Gravatar said: { Aug 6, 2010 - 03:08:26 }

One more thing – I love this site for researching vehicles – http://usnews.rankingsandreviews.com/cars-trucks/

I also went here to research actual prices paid "out the door", when buying new cars. Edmunds has forums where people talk about this stuff – http://www.edmunds.com/

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Jesse MichelsenNo Gravatar Reply:

Yana, thanks for more great advice. I have been using kbb.com to research, but they don't even have all the cars I want to look at on there!

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» SamuraiNo Gravatar said: { Aug 7, 2010 - 10:08:09 }

Don't blow yourself up Jesse! MEGA MINI SECOND HAND MINI VAN is calling!

Have included this post in my latest wrap. Cheers
My recent post The Katana- Deflation Is Out Of The Question

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Jesse MichelsenNo Gravatar Reply:

I knew you would be true to your 1/10th rule! :) Thanks for including me in your roundup, and for being a great example!

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» StephanNo Gravatar said: { Aug 9, 2010 - 06:08:06 }

i definitely would avoid the salvaged car route, too many variables and unknowns. if you know you cant afford a new car without a loan, go for a quality used car. the certified preowned obviosuly have more security but i looked into them when i bought my car last year and the price difference between a certified preowned and a new car was only a couple of thousand dollars, so i chose to just get a regular used car that still had the factory warranty on it(only had 34k miles on it). i personally like VW's, but the price obvisouly could be an issue there. now i currnetly drive a mazda and i love it! maybe look into the CX-5 SUV from mazda, good luck and have fun, getting a new car is always an awsome time!
Preferred Financial Services Blog

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Jesse MichelsenNo Gravatar Reply:

It's true there are plenty of unknowns here, but I'm not afraid to try some of these out and at least consider the option. Some states will mark a cars title as salvaged if it was stolen at any point in it's life, even if there is no damage. I think as long as I know what happened to the car, it's still an option.

Thanks for the insight on the certified pre-owned. I know it's somewhat of a new concept and I wasn't sure how much of a price break there would be, I think you helped rule that out for now.

The Mazda5 was on my list to test drive. I am somewhat excited about this new turn in our lives, but the cost is still weighing on me. Either way, I really do enjoy test driving :) Thanks for all the tips!

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» Money ObedienceNo Gravatar said: { Aug 10, 2010 - 11:08:49 }

We bought a Mazda5 which I would call a mini mini-van, because it has six seats in three rows. It is a little difficult to get to the back row and it is a little tight back there, but we thought we got a great car for a good price that fit our purpose, i.e. 3 kids in the back with two car seats. As long as one of the two seats in the third row is folded down, we also have enough room for luggage. I think the Kia Rondo is a similar, if not better car at a lower price. http://www.moneyobedience.com/blog/budget-and-exp
My recent post Eliminate Debt- Case Study

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Jesse MichelsenNo Gravatar Reply:

I did look at the Mazda5s but they seemed a tad small, as you put it, mini mini, but I will certainly give them, and the Kia a fair shot at being our new family wagon! Thanks for the info!

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» Bad Credit Car LoansNo Gravatar said: { Aug 19, 2010 - 09:08:59 }

Definitely go with the used car. If you want something close to new just buy low mileage, let some other sucker take the 20% hit for driving off the lot.

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» RobertNo Gravatar said: { Sep 20, 2011 - 12:09:36 }

Along with kbb.com I would recommend http://www.truecar.com as sites to do your research on. Personally I really like the Mazda5 as long as it’s big enough for your family.

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Jesse MichelsenNo Gravatar Reply:

Thanks, that’s a great resource!

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