We've almost had the [new] car for a week and really, my daily routine hasn't changed. I am usually home with the baby. Knowing that we can leave anytime, however, has a huge impact on my overall attitude.
It was quite a process for us to get to this point. Buying a car was a major financial decision. Especially since we never forget that we are living here to improve our situation and buy a house of our own someday.
When the car that Bruce's aunt gave us broke down, we knew we'd have to get a different one. Bruce's dad let me drive his car twice a week to work in the meantime. Then the broken car got hit and damaged while it was sitting out on the street. The morning after the police knocked on our door, Bruce's father shocked us with an ultimatum. His car's 'check engine' light had turned on when he was driving one day. He didn't want me using his car for much longer. We were told to buy our own car and "stop procrastinating."
I was furious. We had not been procrastinating. Bruce calmly explained to his father that while it was within his right to ask us to stop using his car, buying a car was a decision between Bruce and me. It was not Bruce's father's business when and if we purchased a car. I was so proud of my husband when he said that. I started waking up extra early, driving Bruce to work in our one car, and then waiting for school to open so that we wouldn't have to rely on Bruce's father's car anymore.
The thing is, we had been researching and car shopping since the old one broke. We had to come to terms with making such a large purchase. Since we didn't have cash to pay for the car outright, we would have to finance it. After paying off a few bills, and feeling slight relief, the last thing I wanted to do was add on more debt. I needed to put together a budget to see if we could continue to pay down our debt with the additional expense. Still, it is a concern that our debt-to-income ratio is again too great with this car loan.
There were also many choices for us to make. New or used? Allegedly, car dealerships are desperate nowadays to sell cars, therefore they are offering extremely low (or no) interest rates. They are throwing in bonuses like cash back and extended warranties. In contrast, used cars are more in demand and typically have higher interest rates. What about leasing? Bruce has a cousin who works in the auto industry, and he suggested we lease. Right now, leased cars have very low monthly payments. However, like renting an apartment, your money is not being put towards ownership. You have to return it; it's not yours to sell later.
We consulted a lot of car and finance books, websites, and blogs such as See Debt Run's article and decided to purchase a reputably safe car, two or three years old, with low mileage. Experts seem to agree that this is a wise choice; you avoid paying the markup for a new car while retaining many new-car features. Ideally, ours would be a car that only had one previous owner like a returned lease vehicle, no accidents, with a couple years of warranty left. Of course, the payments would need to be within our budget. We scoured every local dealership's pre-owned inventory online.
We picked a make and model and narrowed down a few potential cars. We went and test drove and finally found the right one. It was everything we had been looking for! I was worried about how little we'd get as a trade-in for the old car, but surprisingly we got more than we'd hoped for it! We talked the dealers down on the price, negotiated a low interest rate, and even got them to throw in new floormats. The payments are reasonable and it even has a great warranty.
Our time and hard work paid off. At the dealership we were well informed, and thus, unable to be intimidated. The finance guy actually laughed and said, "You two make a good team. You're the numbers man and she's all about the details." We knew what we wanted and we held out for it. I'm actually amazed at how smoothly it went!
When the sale was finalized, Bruce and I separately drove the new car and the other one back home. Bruce's parents were out. Bruce installed the car seat base for the baby while I ordered a pizza. Then the three of us went for our first ride together in the new car. Just us - just perfect.
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