Help me make a financial decision

[Deleted]

I currently drive a 2013 Acura MDX. It has 172K miles. I think that it needs brakes which will cost me around $1K. As a trade in, it is worth about $3K. It takes premium gas so I'm spending about $80/week on gas and getting about 16-18mpg. Also, I'm pretty sure there is something wrong with my transmission, my car does something wonky between 3rd and 4th gear, so I may have that in the future, and with the age of the car, I'd replace and not fix.

I really WANT a new car, but don't know if it is the best choice financially. I think that I would rather lease than purchase again. 

I'm looking at either a Hyundai Tuscon or a Mazda C-5. Both have Lease offers right now for around $300/mth with between $3-$4K owed at signing. Both would be a 33-36 month lease. Both take regular gas and get between 24/32mpg. 

I'm not sure what to do. Do I fix my current vehicle not knowing how long I have until the transmission totally goes? If I do that, then it's worth nothing for the trade in. Or do I get a new vehicle, save the $1k I'd spend on brakes, and get the full value of my trade and then no out of pocket costs up front.

Help me! LOL

[maudefindlay]

Acura's are known to be reliable, well built cars. I think you could have a bit more life in it. If you have a trusted mechanic make an appt for them to do a good once over and see what needs repaired. If just the brakes I'd do it and just make sure you are keeping it well maintained.
I know you were out of work for a bit and going thru a rough divorce, so I'm taking it finances may be tight. If you are adamant on getting a different car I think you should look at buying used or a new car in a base model. I don't think you should lease.

[basilosaurus]

So even with COVID years you averaged more than 10k mi/yr. Which is more than most leases allow without penalty. I briefly considered that route, and it was something like 7k/yr. I'd really look into that first.

I might ditch the car sooner then later, but you'll probably do better than trade in on 2nd hand market giving you more to play with in cash

[archiethedragon]

From a purely financial standpoint, keeping your current car is the best decision.

[isabel]

I would not do a lease if you can help it, though I understand the temptation. The big question I would ask is whether you think your financial situation will be significantly improved at the end of the lease. When you go to return it, you will have nothing to put down on a car to purchase and may find yourself in a cycle of feeling better off leasing long term, which isn’t the best decision financially in most cases.

I would get recommendations for a trusted mechanic and get a few opinions on cost to repair and what they think about the life of the vehicle before making a decision. Go into this feeling fully informed, rather than speculating about what your current car may need.

[plutosmoon]

I would fix the brakes and see if you can get through your first 6 months on your new job and the other side of your divorce. If I recall I think you were also planning on buying your stbx out of the house, if you haven't done that refi I would wait on this until after the buyout refi. Potentially, you may not be even to do this with your ongoing divorce, the Acura could be considered a marital asset and if you trade it in for a lease with no asset value you could owe him half the $3000. In my divorce, once exh filed we were under a financial restraining order that would have prohibited this without written approval.

[thebreakfastclub]

I kind of find it interesting that you researched the new cars to a lower level of detail, but you don't truly know the cost of fixing the current car, including transmission.

I think you'd have to find a couple of mechanics and get some estimates on fixing the current car fully.

I don't think it's the right time to enter into a car lease, coming out of extended unemployment where things were super tight. I'd fix the current car, and then work to put the $300 a month aside so you're ready for the next car. I would not lease, period.

[hermione]

I'll likely be the outlier but I'd get a new car. I think I probably have some residual feelings about growing up fairly low income and the constant fear (and reality) of a car not starting. It is very valuable to me mentally to have a reliable vehicle. I leased for years because of it. I am only buying my lease out now because it so few miles on it bc of the pandemic and cars were hard to come by when the lease was up. If you can afford the lease comfortably, I'd do it in a heartbeat.

[clairebear]

I would absolutely stick your current car. You don't know actual numbers of how much you need to put into it to keep it going. $1000 for brakes sounds more than I would estimate. Can you take it to a trusted mechanic and get an exact quote for brakes? Even if you put $1000 into it and got another 4 months you would be ahead financially. ($1000 repair versus $1200 lease payments).

I get it, new cats are nice! I'd love a new car. I have older Prius with 130,000 miles but I stick with it because it's the best financial decision for me.

[purplepenguin7]

you would spend the 1k to fix the breaks on just 3 months of your lease. If the car holds out more than 3 months (which it probably will with new brakes), it's worth the fix. I would see if you can get more clarity on "something wrong with the tranmission" before making a decision.

[Jalapeñomel]

Jul 11, 2023 10:48:47 GMT -5 archiethedragon said:

From a purely financial standpoint, keeping your current car is the best decision.

This but if you choose to trade it in, buying a car is better than leasing.

[gottadobe]

I'd fix the current vehicle.

[meanie]

Our mechanic has helped us make these decisions in the past, so if you have someone you trust I would bring the car in for a checkup and ask their advice.

[Deleted]

Thanks everyone.

I've had the brakes replaced before and it was a little shy of $1k, so I'm pretty certain on that cost. I did research a transmission rebuild on my car and the average cost is around $2500-$3,000 (my car isn't worth much more than that due to some body damage). I actually don't currently have a mechanic because my old one retired, so I guess I should start asking around for recommendations.

The temptation to just get a new car and be done with it is pretty strong, but you all make a really good point about just keeping it, at least until I'm done paying attorney fees

[wildrice]

Brakes are basic maintenance, so I would do those and wait for an actual breakdown type issue before replacing. So far I have never done a repair or maintenance that cost more than a year of car payments, so I pretty much always choose to fix!

Of course I got my last 2 cars because of the previous cars being totaled, so I guess I don't have much experience getting a new car just because I felt like it. Regardless, I would wait to take on new debt until the dust settles on your recent changes. I know your STBX has always overspent and you might end up really enjoying the financial freedom ditching him brings.

[Roc A Bee]

I feel like I’d need to know more about your finances to give a good answer. Like how does a car payment factor into your monthly bills. Do you have other debt? I’m guessing since you are dealing with a STBXH that isn’t paying his fair share, and you’ve been unemployed, that now is the time to build up savings and not get a new car. But that’s just a guess.

Also how many miles do you drive? I drive way too many for a lease, and it looks like you drive a lot as well?

[arielroux]

So, I’d definitely get an estimate on the potential transmission issue before you make any decisions. I know people always say not to take cars to dealerships for repairs, but I’d definitely recommend having Acura of Limerick take a look at it. I’ve gotten multiple cars from there and still took my cars there for maintenance. They take fantastic care of you, and their costs are really reasonable.

You said you didn’t have a mechanic, so I’ll recommend United Tire in Phoenixville as an alternative to Acura of Limerick. I’ve also taken cars to United Tire in Pville, and they have always been wonderful, super nice, and very honest about work that does (or does NOT) need to performed on your car.

[dontlook]

Jul 11, 2023 11:06:26 GMT -5 hermione said:

I'll likely be the outlier but I'd get a new car. I think I probably have some residual feelings about growing up fairly low income and the constant fear (and reality) of a car not starting. It is very valuable to me mentally to have a reliable vehicle. I leased for years because of it. I am only buying my lease out now because it so few miles on it bc of the pandemic and cars were hard to come by when the lease was up. If you can afford the lease comfortably, I'd do it in a heartbeat.

I have similar fears but the car is 10 years old and doesn’t even have 200k miles on it. It doesn’t feel like it should be failing her just yet. My car is a 2015 and other than tires it hasn’t needed much.

I’d fix the car and work hard to save for a new car. A lease isn’t a bad option (we’ve leased our last 2 cars) but we were ready to buy out the lease when it ended.

[litskispeciality]

We stumbled upon a unicorn mechanic who guided us to buy parts on our own because the shop (at least in my state) has to apply an upcharge. He only charged us for labor, and we saved a good amount. I'd see if you can find something like that, or at least get a couple of quotes for breaks. They should be able to look at the car and tell you if there's anything else they think might need fixing. I think it's better to run all of those numbers, then run that against the cost of a lease or car payment when they're going for well over $300 a month right now, plus tax and money down etc.

I get the appeal of the new car, but as someone driving a now 14 y.o. car, the $1K for breaks (or hopefully less), assuming it lasts a few months, is cheaper than a lease or car payment. Lease would make me very nervous too that I'd still owe a bunch of money to keep the car, or start over again in a couple of years (when the lease is up) when you're hopefully well beyond the current financial situation.

ETA: I get the fear of being stranded without a car and have been there when my newer car completely died of something that was later recalled by the dealer. It's absolute hell, but it's also a gamble. Do you spend $300+ a month right now eating in to future savings, or do you wait it out? The new car might even have issues...look at washers, refrigerators etc. nothing is built to last anymore

[DotAndBuzz]

So, let's say "worst case scenario" you have to do brakes AND transmission. split the middle on transmission estimate, and say 2750, so you're in for $3750 to keep your current car.
Yes, that's more than the blue book value, BUT, it's WAY LESS than a new car. That's like 6-8 months of a car payment if you buy. So anything beyond those 6-8 months is "free car month," where you essentially have a car for no additional cost to your budget (vs buying, where you'd have a payment). A new car still needs gas, oil changes, tire rotation, etc.

I absolutely would not lease in your situation. No way. You're essentially locking yourself into a car payment with nothing to show for it when it's done. If money is tight, a lease would leave you with having spent over 10k (best case scenario) over 3 years, and still have no car at the end of it unless you give them MORE money to buy it out (extending the payment time period beyond a typical 5 year car loan), or sign up for another lease.

[bee20]

I plugged in some numbers on a new CX-5 in my zip code.

I can't really recommend a 72 month loan but they're common now, and with your trade-in and the money down you'd spend $350/mo and in 3 years have probably $3-5k in equity having only spent $1800 more. You could then keep paying $350 and have the whole car 3 years later, or trade it in for something else with some equity instead of starting over from zero. Run your own numbers depending on your credit and available cash, but a lease doesn't look like a great deal assuming you don't need to drive newer cars.

Looking at used prices I probably would just buy new and plan to keep it for 10 years, the used cars I'm seeing are maybe 20% cheaper but have 50k+ miles.

[wanderingback]

I don’t have a car anymore, but when I did I drove them as long as possible because that’s what my parents always did. So overall I say keep your car.

I also don’t really understand leasing from a financial perspective. I did actually lease my last car though. My 2006 car was totaled by another driver. I knew in 1.5 years I’d be moving to a city where I didn’t need a car and didn’t want to deal with buying a car and then having to sell it. So I leased for 2 years and it worked out well. But overall I think financially it makes sense to buy a car and drive it for at least 10 years. If you lease then you just have payments forever and can’t sell the car at the end.

[nicolewi]

I’m also an outlier more in favor of getting a new car. But I’m not sure about leasing. I’ve never leased. My first step would be to actually get an estimate on all necessary repairs from a mechanic. Brakes may be more than you think this time, the transmission thing worries, me, who knows if there is something else going on. That’s a lot of miles in a 10-year-old car.

I wouldn’t want to fix anything before trading it in. I would trade it in and try to find another reliable used car with low miles on which you can use the trade in money.

[goldengirlz]

What are the advantages of leasing over buying?

Although it might be cheaper in the short-term, if you’re planning to need a car for the indefinite future, buying is generally the better bet long term.

Don’t you have teenage drivers? I’d be tempted to get a new car for myself and fix the older car for the kid(s). Or at least that’s our plan for H’s car. He’ll drive it till it’s 12 and then DC can have it.

[DotAndBuzz]

Jul 11, 2023 12:37:55 GMT -5 goldengirlz said:

What are the advantages of leasing over buying?

Although it might be cheaper in the short-term, if you’re planning to need a car for the indefinite future, buying is generally the better bet long term.

Don’t you have teenage drivers? I’d be tempted to get a new car for myself and fix the older car for the kid(s). Or at least that’s our plan for H’s car. He’ll drive it till it’s 12 and then DC can have it.

I've entertained leasing if I give my 15 year old my car (it's only 2 years old, so not likely, lol), and then lease an electric/hybrid for a few years. I got burned with the Honda Pilot redesign, and never EVER will invest in new car technology to own again. So I'd be willing to lease a newer model/design electric to see how it plays out, and then buy at the end of the lease.

BUT. It's definitely not the most sound financial decision, as I wouldn't end up with a car at the end of the least term. That option is coming from a place of privilege (not to mention giving my kid her own CAR...).

[sproctopus]

I just spent $1400 on new brakes, so your estimate sounds right to me. The cost of parts has gone up.

I've spent about 5000 in the last year on my almost 10 year old car. Everytime something else pops up, I swear I'm not spending a dollar and want to kick it into the river and get a new car and I never do because financially, it's worth riding this trash bucket into the ground.

[quesyrah]

We’ve always followed the advice of click and clack from NPR’s Car Talk lol.

They always told callers that if what they spend on car repairs each year is less than what they would spend on car payments, then it makes more sense to keep your car and repair it.

It’s always worked well for us.

If you’re someone who likes having a nice newer car I can see the temptation to trade in for new. Maybe fix the car now and spend the next 6-12 months saving that $300 and then put it down on a newer car; but buy it. Don’t lease.

[jobae1234]

I would:
1) repair the brakes, ask them to quote you on the transmission issue in case it’s fixable
2) put money away monthly for a new car
3) ride out the transmission as long as possible
4) sell it PRIVATELY because that trade in number is absurd in this car market
5) use the savings and private sale money towards buying (not leasing) a new car in 1-2 years, or however long your transmission lasts.

With divorce and unemployment, it’s not a great time to get a new car. Get your feet under you financially financially first.

[letsgetweird]

Can you have it looked at it to see if it needs a new transmission? Do you need al 4 brakes? $1k seems like alot

I have a 2021 CX-5 and I average about 20 mpg. How many miles do you drive per month? I've never leased a car before but I've heard you should not put any money down on a lease.

[bee20]

I've never understood the argument to spend as much on your old car as you would on car payments. It's stressful and disruptive to coordinate car repairs, and if you are the only adult in your household it's a pain to manage drop-off and pickup, as well as being without a car. There is some value in having a reliable vehicle, especially if you are in a new job and have less flexibility than a place you've been for years.