How can we lower our car payment?

[Deleted]

Your car should last longer. I'd get it properly fixed so it's reliable, and then I'd bank the car allowance for longer than 6 months. Aim for a year, if not two. If instead of just alternating 4 years payments, 4 years payments forever, you lengthen the time of paid off 2 cars and bank bigger and bigger downpayments... that's how you do it.

Not buying new is also pretty key in how we don't have car payments. We started off driving very shitty cars we could buy with cash. Then slightly better, and now our cash budget for our next car will probably be about $15K. Nothing fancy, but I've never had a car payment.

[tealblue]

Take your car to a mechanic and get whatever fixed. I'm sure it will be less than 1-2 months of car payments. Drive your car for at least a year or two after your DH gets his paid off. If you don't put many miles on it, most of your expenses will be for maintenance (tires, brakes and oil changes) which are part of owning any car.

[tacosforlife]

Ditto getting your car repaired. Take it to a mechanic.

With 117,000 miles and only 8,000 miles per year, there is no reason you couldn't drive that for several more years. Then you can bank the car allowance longer, put more down, and finance less.

[kadams767]

Ditto everyone else. There isn't really secret to getting lower payments. You either have to have a higher down payment or buy cheaper cars. You're going to get to a higher down payment by saving the car allowance and driving your paid-off cars longer.

Honestly, with an $800/month car allowance, you can afford to bank that once both cars are paid off and then use it when necessary to repair either of them, even if fixes are coming up at the same time. I'd do this as long as possible, until maybe repairs are exceeding value or getting close to it. But I'd say you have years before that would really happen.

[lolo]

Apr 20, 2015 14:39:55 GMT -5 @amydm said:

So I guess I need to clarify- DH is going to want to get rid of his car at 160k miles, max- that is the goal.

Why is that the goal?

[Deleted]

You need to:
1) Buy cars less often.

or

2) Buy less expensive cars.

That's math. Both would be ideal, but one way or the other is how you have lower car payments.

[tacosforlife]

Apr 20, 2015 14:39:55 GMT -5 @amydm said:

So I guess I need to clarify- DH is going to want to get rid of his car at 160k miles, max- that is the goal.
So if I don't get a new car soon, how do we make that work? And then we would get off schedule?

Scenario - in 2018 I get something new. I have maybe 7k value in the CRV and I have saved 550/month over 30 months. I would buy a 3 year old car for 23,500. We then save that 550/month for 1 year. Let say the Explorer is worth 12k in 2019 and we have 6,600 saved. A used truck could easily be 35k so we are still financing 17k. 376 a month over 4 years or 494 over 3 years at 3% interest. Say we save 175 a month over the 4 years. 8,400 saved and my car is 7 years old.

I feel like it will always just be a cycle of either having a pmt or saving the same amount of the pmt, but the cars are used instead of new.

Why would you not have been saving the $800/month? Or does $250 of that go toward gas? I am confused.

At the end of the day, the ways to lower your car payments are: 1) Buy less expensive cars, 2) Keep your cars for longer, 3) Put down a larger down payment, or 4) Some combination of 1 through 3.

Also, if you get your car repaired and only put 8,000 miles per year on it, I am not convinced you will need a new car in 2018.

[illgetthere]

Is the $550 killing your budget?
With you putting on less miles, you could find something used for ~20k and finance for 3 years. The payment will be low, and you could save the difference to have a larger down payment on your H's truck which would give him a lower payment. It will also allow for you to save 1 year for your down payment without overlapping. The total towards vehicles would be the same since it doesn't sound like you really want to spend less than 55-65k every eight years, but your obligated monthly amount will be lower.

Edit: I do agree you car should last for quite awhile longer though

Edit 2: you might even be able to pay cash for your car 2 cars from now. That will allow for a ~30k down payment on his vehicle after that. You just need one round of waiting a little longer and buying something cheaper

[kadams767]

Apr 20, 2015 14:39:55 GMT -5 @amydm said:

So I guess I need to clarify- DH is going to want to get rid of his car at 160k miles, max- that is the goal.
So if I don't get a new car soon, how do we make that work? And then we would get off schedule?

Scenario - in 2018 I get something new. I have maybe 7k value in the CRV and I have saved 550/month over 30 months. I would buy a 3 year old car for 23,500. We then save that 550/month for 1 year. Let say the Explorer is worth 12k in 2019 and we have 6,600 saved. A used truck could easily be 35k so we are still financing 17k. 376 a month over 4 years or 494 over 3 years at 3% interest. Say we save 175 a month over the 4 years. 8,400 saved and my car is 7 years old.

I feel like it will always just be a cycle of either having a pmt or saving the same amount of the pmt, but the cars are used instead of new.

Yes, you either have a payment and a new car, or no payment and an old car.    With the cycle you have set up for yourself, unless you are willing to buy cheaper cars and/or drive them longer, you will always either be paying the payment or saving it to buy the next car.

Your wants do not align, that is the problem.  You want to drive relatively $$$ cars, but you also want low payments and costs.     

[LoveTrains]

I'm confused about why you need a new car. I can understand the deal with your H.

But a honda crv that is at 117K miles and that you only drive for 8k miles a year should last for like, ten more years.

[Deleted]

Apr 20, 2015 15:03:55 GMT -5 pinkplasticdoll said:

This whole situation confuses me.

Agree. 

Your logic seems to be only in place if the end result is getting a new car.

We have 3 cars.  Two are 2002 and once is a 1994 - so old cars.  We are not always getting tires and/or repairs done.  And really, it's simple match.  We track how much we are putting into the car above normal oil changes, tires, etc - and once the math becomes where it makes sense we will buy a new car.

[audette]

Apr 20, 2015 14:56:32 GMT -5 lolo said:

Apr 20, 2015 14:39:55 GMT -5 @amydm said:

So I guess I need to clarify- DH is going to want to get rid of his car at 160k miles, max- that is the goal.

Why is that the goal?

There may be an expectation of maintaining a certain style/brand/age of car when you have a job with a vehicle allowance...

Honestly, if you want a lower car payment, there are a handful of options - keep the vehicles longer, spend less on the next vehicles, or save more each month now so you have a bigger downpayment when you do buy.

[LoveTrains]

Apr 20, 2015 15:09:47 GMT -5 @amydm said:

Apr 20, 2015 14:56:32 GMT -5 lolo said:

Why is that the goal?

2 things
1. Since he gets an 800 month car allowance, he is expected to have a relatively new car.
2. The last Ford he had, and we were putting a ton of money in it and got rid of it at 160k. I doubt it will be like a Honda you can drive forever.

That makes sense. But that has nothing to do with you feeling a need to replace your perfectly reliable honda crv with 117K miles that you only drive 8K miles per year. 

Like I said....you can replace that in 8-10 years. 

[LoveTrains]

Apr 20, 2015 15:11:30 GMT -5 @amydm said:

Apr 20, 2015 15:04:41 GMT -5 LoveTrains said:

I'm confused about why you need a new car. I can understand the deal with your H.

But a honda crv that is at 117K miles and that you only drive for 8k miles a year should last for like, ten more years.

I don't have a problem keeping my car.  I like it fine.  But I don't want to drive crappy car, like a I did in high school and college, either. And in 20 years it will be for sure.

But why will it be crappy? Just because its old? I rock my 10 year old subaru forester and I fully intend to drive it for 10 more years. It's called yankee frugality.

[gt7301b]

Apr 20, 2015 15:04:41 GMT -5 LoveTrains said:

I'm confused about why you need a new car. I can understand the deal with your H.

But a honda crv that is at 117K miles and that you only drive for 8k miles a year should last for like, ten more years.

This is what I was going to say. My husband currently drives a 1997 Honda with 130K miles and we just sold my 2000 Civic at $195K.  The CRV still has a ton of life left on it.

[aurora]

Apr 20, 2015 15:09:47 GMT -5 @amydm said:

Apr 20, 2015 14:56:32 GMT -5 lolo said:

Why is that the goal?

2 things
1. Since he gets an 800 month car allowance, he is expected to have a relatively new car.
2. The last Ford he had, and we were putting a ton of money in it and got rid of it at 160k. I doubt it will be like a Honda you can drive forever.

I, too, would be annoyed to have a car that didn't start correctly several times a week. If it were a 9-year-old Honda in otherwise good shape, my first step would be to get it repaired - or at the very least get a quote for how much the repair would cost - before contemplating a new car.

I get #1, and I think you can plan for him to get a car that meets his company's requirements. That still doesn't mean you have to get yourself a new car soon. If you save the $550/month for 4 years you'll have $26,400, which you can use to buy your gently used car outright and then finance his. And also consider not getting a Ford if you find it's less reliable long-term.

[tacosforlife]

Apr 20, 2015 15:11:30 GMT -5 @amydm said:

Apr 20, 2015 15:04:41 GMT -5 LoveTrains said:

I'm confused about why you need a new car. I can understand the deal with your H.

But a honda crv that is at 117K miles and that you only drive for 8k miles a year should last for like, ten more years.

I don't have a problem keeping my car.  I like it fine.  But I don't want to drive crappy car, like a I did in high school and college, either. And in 20 years it will be for sure.

I don't think anyone expects you to drive this same car 20 years from now.

You have a 2006. It is currently 2015. So your car is currently 9 years old. In 2018, your car will be 12 years old. 12 years old does not automatically mean crappy. I sold a car at 11 years old for logistical reasons, not because it was crappy. It didn't have all the bells and whistles of a newer car (but let's be honest, it was a base model so it didn't have bells and whistles when it was new). All my repairs were pretty standard maintenance - timing belt, tires, partial clutch replacement (standard transmission). I could have easily driven it for 5 more years if it had made sense to keep it.

Properly maintained, your car should be fine - albeit not decked out with the latest technology - past 2018.

It seems like you want a fancy new car on a regular basis and a lower car payment. The only solution I see is to buy a cheaper car. That might include broadening your search to a sedan, a larger hatchback if you can find one, or even maybe a Mazda 5 (like a wee mini van).

[kadams767]

Apr 20, 2015 15:17:56 GMT -5 @amydm said:

Apr 20, 2015 15:11:37 GMT -5 @vicmo said:

So your h plans to replace his car in 4 years either way and you're nervous about having two car payments if you don't replace your car now and pay it off before 4 years from now?

Bank the allowance for now and then you'll have a big down payment for when your car needs to be replaced. Maybe even buy a 1-3 year old car for cash when you're ready.

Yes, thank you!  You understand what I mean.

LOL, we all understand what you mean.  We are just saying that it's not going to happen the way you want it to unless you modify your plan. 

[tacosforlife]

Apr 20, 2015 15:20:55 GMT -5 @amydm said:

Apr 20, 2015 15:12:01 GMT -5 LoveTrains said:

That makes sense. But that has nothing to do with you feeling a need to replace your perfectly reliable honda crv with 117K miles that you only drive 8K miles per year. 

Like I said....you can replace that in 8-10 years. 

Like I said, I don't have a problem keeping it.  DH is wanting me to get a new car, because if I don't it means I keep it another 8 years. And he will be on his 3rd new car in that time.
I was just wanting to hear others thoughts. 

But I don't get this. If you save the car allowance for the next 30 months, you will have a large down payment to put on a car for him. You could pay his car off sooner and then get yourself a new car. So maybe you get one in 5 years from now, not 8.

I am still confused as to why you would only be saving $550/month of the $800/month car allowance.

Is your H required to have a truck for work?

[lys]

800 a month for DH car - 550 for car payment. Then set aside 250 a month toward gas, insurance and general maintenance.

I would fix the Honda and keep it much longer - keep saving toward a replacement.

Do NOT finance longer than 3 years.

Consider a low mileage used vehicle rather than new - one that is economical to own and operate.

[illgetthere]

Apr 20, 2015 15:17:16 GMT -5 @amydm said:

Apr 20, 2015 15:01:59 GMT -5 illgetthere said:

Is the $550 killing your budget?
With you putting on less miles, you could find something used for ~20k and finance for 3 years. The payment will be low, and you could save the difference to have a larger down payment on your H's truck which would give him a lower payment. It will also allow for you to save 1 year for your down payment without overlapping. The total towards vehicles would be the same since it doesn't sound like you really want to spend less than 55-65k every eight years, but your obligated monthly amount will be lower.

Edit: I do agree you car should last for quite awhile longer though

Edit 2: you might even be able to pay cash for your car 2 cars from now. That will allow for a ~30k down payment on his vehicle after that. You just need one round of waiting a little longer and buying something cheaper

Our obligations on DH's 6,600 a month take home
house pmt-1910
car pmt- 550
preschool-300 (only next school year of this)
My student loan-280.

I am interested in going back to work- applied for 2 jobs and had 1 interview.  Didn't get it. I plan to sub when DD is in Kindergarten, plus we won't have preschool expenses if I don't land a full time school counseling job.

I don't know if it is killing our budget, but DH wants to do things like 5k landscaping projects and we don't have extra money for that. I have been putting the 2 extra checks and his bonus into our efund.

I understand. If your vehicle obligations were 350/month (edit: allowing 200/month for other wants), that is appx 50k on vehicles every 8 years when you include the trade/sale value of current cars. When you are spending 60-65k, the monthly costs are going to be higher whether it is saved or payments. Bank the payments for when you need them for your vehicle, and it might last longer than you think. Even if you do have to replace, you'll have cash to put down so you won't have the double payments.

Edit: also, if you just have the 1 or 2 kids, you could probably get by with a smaller sedan. I purchased a new car for less than 20k last year and it has much more technology/features (minus leather) than my high level 2008 had

[tacosforlife]

Apr 20, 2015 15:25:02 GMT -5 @amydm said:

Apr 20, 2015 15:21:00 GMT -5 tacosforlife said:

I don't think anyone expects you to drive this same car 20 years from now.

You have a 2006. It is currently 2015. So your car is currently 9 years old. In 2018, your car will be 12 years old. 12 years old does not automatically mean crappy. I sold a car at 11 years old for logistical reasons, not because it was crappy. It didn't have all the bells and whistles of a newer car (but let's be honest, it was a base model so it didn't have bells and whistles when it was new). All my repairs were pretty standard maintenance - timing belt, tires, partial clutch replacement (standard transmission). I could have easily driven it for 5 more years if it had made sense to keep it.

Properly maintained, your car should be fine - albeit not decked out with the latest technology - past 2018.

It seems like you want a fancy new car on a regular basis and a lower car payment. The only solution I see is to buy a cheaper car. That might include broadening your search to a sedan, a larger hatchback if you can find one, or even maybe a Mazda 5 (like a wee mini van).

Is a Honda CRV a fancy car? Dh does want $ cars, but my CRV cost 24k in Jan 2006 and I think it has been worth it.

Well, I have only ever driven base model or old cars, so to me, yes, it kind of is. But I meant "you" as in both of you. Your H wants a loaded pickup truck. And he has to have a certain level of car for work. I am not sure how else to classify your stated wants.

But there is still a lot of info in this post that is confusing. You talked about a $550/month payment and also about each of you financing for 4 years. If you are buying a cheaper car than your H, then I would assume your payment would be lower or your loan would be for a shorter term.

[asoctoberfalls]

Apr 20, 2015 15:12:52 GMT -5 LoveTrains said:

Apr 20, 2015 15:11:30 GMT -5 @amydm said:

I don't have a problem keeping my car.  I like it fine.  But I don't want to drive crappy car, like a I did in high school and college, either. And in 20 years it will be for sure.

But why will it be crappy? Just because its old? I rock my 10 year old subaru forester and I fully intend to drive it for 10 more years. It's called yankee frugality.

I had the same intention, and my 10 year old Forester died in spectacular fashion a month ago. Sad.

[lys]

DH is still driving his 2003 Subaru Outback Imprezza and plans to keep driving it until it needs to be replaced. (Great versatile family vehicle).

[audette]

Apr 20, 2015 15:29:01 GMT -5 @amydm said:

Apr 20, 2015 15:24:39 GMT -5 tacosforlife said:

But I don't get this. If you save the car allowance for the next 30 months, you will have a large down payment to put on a car for him. You could pay his car off sooner and then get yourself a new car. So maybe you get one in 5 years from now, not 8.

I am still confused as to why you would only be saving $550/month of the $800/month car allowance.

Is your H required to have a truck for work?

Ok, I understand what your are saying.  So we save up to pay cash for his car, and then possibly finance mine. 
The rest of the allowance is used for insurance and gas.  He does not have to have a truck, but he is a construction executive and goes to job sites a lot. Most everyone has trucks and he has to have 4 wheel drive. He has to have an American brand because of unions.

You might not manage to save enough to pay for his next vehicle in cash, but the larger the downpayment, the less you have to finance when you replace your husband's vehicle.  Which means you could finance it for a shorter term, or for a lower monthly payment.  (I'd go shorter term, if it were me, in most circumstances.)  Then, once his is paid off, you save again for your next vehicle purchase.

I've got a 2007 Accord (bought new).  I'm guessing it has a similar engine to your CRV, and we're at similar mileage on it.  We just got DH a new vehicle this year (brand new, paid cash), which means I hope I am only about halfway thru the life (with me) for the car.  16 years out of a Honda isn't crazy to expect.

I did have to put a bit of money into my car last month, but it was all for regular maintenance - timing belt (I was a bit late on replacing it, oops!), spark plugs, tire rotation, etc.  But, all in all, that's a drop in the bucket compared to getting a new car...

[gtkim]

I'll echo some of what the others have said.  Keep your cars longer.

My DH is a high level manager.  He drives a 1996 Civic with 180k miles on it.  The damn thing has a cassette deck!  Could we get a new car?  Sure.  But why?  It still runs and it costs us less than $100 to maintain.  Significantly cheaper than a new car.

I just got rid of a 2003 Accord only because of some underlying issues, but I bought a 2011 Accord to replace it.  Because it was 4 years old it was definitely more affordable.  It only had 40k miles and I paid cash.  

I think a lot depends on your priorities.  Both of us prefer to travel and do home improvements rather than having a new(er) car.

[Deleted]

If he gets that allowance and is expected to have a new car because of it, I'd say this is one situation where leasing his car would make sense. A 2015 Explorer is about $250ish/month to lease (probably a bit more for a high mileage lease). That would free up a lot of the allowance for a second car payment.

But if he drives a lot I'd try to get him less of a gas guzzler than a full size SUV.

[Pom]

www.kiplinger.com/article/cars/T009-C004-S001-five-myths-about-leasing-a-car.html

I think the tax on a lease depends on the state of your residence.

Seriously, the advice you have been given to keep a vehicle longer is golden. Trading cars every few years is not a good use of your money.

www.forbes.com/sites/investopedia/2011/02/11/buying-a-car-the-worst-investment/

[Deleted]

The tax issues are going to depend on your state, you could probably find this info pretty easily online. You'd have to look at the specific warranty for the lease to see what's covered, but general maintenance/oil changes are typically covered.

I've never actually leased a car because we drive ours into ground. But I think in your situation (where your DH wants a more $$$ car than you can afford & wants to replace often) it might be a good option.

[delawarejen]

I think leasing a car that is going to be driven on construction sites is a bad idea, because of the risk of damage to the vehicle.