My wife wants a new car

My wife wants a new car

Jordan SutherlandBusiness Member
Realtor · Lubbock, TX · Member since 2016 · 86 posts · 119 votes

Hey guys, I would love to hear some opinions on my personal finances. I'm a 23 year old fireman in Texas. I make a decent salary and my wife is able to stay home with our two kids. We are able to live confortably because we have no debt ( besides our home and our two rental properties), but we still have to stick to a budget to make ends meet. We just got into real estate investing last year and I would like to keep the ball rolling.  We have about $40k in the bank and in moderately aggressive mutual funds not in retirement accounts. We are expecting our third child in June and my wife says she needs a new car to accommodate our whole family. She currently drives a 2008 impala that could hold our whole family, but would be very inconvenient with 2 babies and a 6 year old in the small back seat. My car is even smaller than hers. My wife wants a used SUV in the $15,000-$20,000 price range.I told her that she should keep her current car, because it will help with our long term financial goals, but she is adamant in getting something newer and bigger. I feel like we are doing very well for our age, but I feel like if we spend too much money on cars and other liabilities it will severely compromise our financial future. The money we would spend on a car could be used as a down payment on  another rental property in my local market.  Even a small car payment of $300/month will not fit in our budget at all, as  our income is nothing to brag about. What do you guys think we should do? Make my wife happy and get the car or try to remain frugal in our personal finances and continue growing our investment portfolio? Thanks for any input!!

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Natalie KolodijBusiness Member
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Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
9y

Just from the standpoint of someone's whose first career was mechanic- I'm shocked that impala has made it 10 years and likely will start giving you some spendy issues soon. So ...keep that in mind as well. 

You can look into a used Honda cr-v that may hit closer to the $10k mark and be a little bigger, not break the bank, and be reliable. 

You've got to figure out a way to balance both frugal and happy wife. A new car is definitely cheaper than a new wife.

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  • Natalie KolodijBusiness Member
    Moderator
    Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
    9y

    Just from the standpoint of someone's whose first career was mechanic- I'm shocked that impala has made it 10 years and likely will start giving you some spendy issues soon. So ...keep that in mind as well. 

    You can look into a used Honda cr-v that may hit closer to the $10k mark and be a little bigger, not break the bank, and be reliable. 

    You've got to figure out a way to balance both frugal and happy wife. A new car is definitely cheaper than a new wife.

  • Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
    9y

    3 years ago I bought a '96 Ford Explorer for $ 1600.00. Great car. haven't had any problems and drove cross country with it last year. Had 179,000 miles on it when I bought. 

    You don't have to spend 15-20K for a new car. She could buy a used SUV from a dealer on payments and then use your cash for another property

  • Investor · Orlando, FL · Member since 2012 · 183 posts · 155 votes
    9y
    I think I first heard this from Robert Kiyosaki but the idea is that you buy a rental property that cash flows enough to cover the car payment. So could you use the $20k for a down payment on a rental property that could cash flow $300/month and cover the car? That's a win/win all around. Did a quick google search and it was Kiyosaki. Here's a thread about it (didn't read). https://www.networthiq.com/people/KoMerican/questions/rich-dad-poor-dad-car-buying-
  • Real Estate Broker · Malone, NY · Member since 2013 · 345 posts · 70 votes
    9y
    I'd second the idea of using some of your bank to buy another rental property to cover the cost of the car. A happy wife is a happy life, as they say! :)
  • James MasottiPro Member
    Rental Property Investor · Washington Township, NJ · Member since 2015 · 1k+ posts · 976 votes
    9y

    @Jordan Sutherland - I had a 2006 Saturn Vue when I was younger. You can pick them up with low miles for less than $5000 and that care is virtually indestructible and great on gas mileage (for a non-hybrid SUV) The V6 engine in the 2006-2008 model is the same as the Honda Accord if I remember correctly. If I were in the market for a cheaper used SUV that's what I'd be looking for because it's an amazing car. You also don't need to worry about the fact Saturn is out of business because almost all the parts are interchangeable with the Chevy Equinox.

    That having been said...you don't need to pay cash for the whole SUV. Consider putting $5k down and then financing the rest over 3 years with a credit union. Credit unions by me are offering rates on 36 month loans at 1.49-1.99%. As I'm sure you know you can get much better returns than that on real estate...this way you get a newer car, not out all the cash, and you can invest what remains of your money into real estate making 15%+ I'd say that more than makes up for the 2% interest on the car loan. 

  • Real Estate Investor · Desoto, TX · Member since 2013 · 560 posts · 528 votes
    9y

    It does not have to be a new car, but dude you better get her a automobile that accommodates her taking care of the kids if this is her primary job. You know happens when people hate their job, they start looking for a new employer, lol! Don't let frugal get you put out the house, lol. I learned to pick my battles with my wife.   

  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
    9y

    Getting a new car makes sense, but $15-20,000 seems high, especially if you want to become an investor. Do you think you could talk her into a used car, maybe in the $6-10,000 range?

  • Mike ReynoldsPro Member
    construction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes
    9y

    @Jordan Sutherland Here's a thought. Check out Enterprise rental cars for the ones they have for sale. They even finance if you need but they are at a big discount and low miles. Much cheaper than retail used.

    Trucks SUV's and cars.

  • Investor · Bethel, AK · Member since 2013 · 1k+ posts · 852 votes
    9y
    Jordan Sutherland I bought a used car with 500 miles on it. Most of my rentals average 7% CF. the car loan was 2.5 %. I then paid the car down about 1/2 way. The car is in anchorage and gets less than 1000 miles a year. After the car was about 1/2 paid for Interest dropped to 2%. I re-financed it to full loan value. Put 18,000 in the bank and later used it to buy a duplex. The car is my only payment besides my primary residence. The car payment dropped due to the lower interest. Remember the car is in storage so no collision insurance. Just liability. No miles on it so it holds its value well. Im making 5% on my car loan!! I would look for a newer used car and finance it at a low interest rate. You gotta remember if momma ain't happy ain't nobody happy. Buy the car and you will have a more harmonious outcome. Never short your family for a couple dollars. What good is a big bank role with a small character? RR
  • Real Estate Investor · Anchorage, AK · Member since 2015 · 117 posts · 42 votes
    9y

    @Ralph R., good on ya mate!  You just blew my mind!  lol

  • Investor · Bethel, AK · Member since 2013 · 1k+ posts · 852 votes
    9y

    @Connor Maloney  you gotta be pretty creative when you live in the bush. RR

  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    9y

    @Zach Mitchell's idea of investing the money to create the cash flow for the car is also what I was going to say. I will add this one caveat that Im sure many people on here will have a problem with. Lease a vehicle instead of buying one.  Own appreciating assets, rent/lease depreciating assets.

  • Lender · San Antonio, TX · Member since 2016 · 1k+ posts · 1k+ votes
    9y

    @Jordan Sutherland There's plenty of good options between a 10 year old impala and a $20k SUV... you're just asking for it though when you get the call saying 'my stupid car you wouldn't let me get rid of just died on the side of the highway with 3 babies in it, Jordan!' 

  • Attorney · Memphis, TN · Member since 2017 · 37 posts · 25 votes
    9y
    I second the Kiyosaki philosophy of using cashflow on another rental to pay car note, but I know a lot of work goes into finding a deal like that and you don't have much time. I was in a position where I had to buy a car last year. I got a used 2013 Hyundai Santa Fe Sport (mid size SUV) and I love it. It was under 14000 sticker price and lots of space. Look into the Tucson also.
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Jason Hirko  got that right I bought the best cars I could buy for my family.

    my wife was rear ended once .. sitting at a stop light guy hit her doing 45.. our BMW withstood the on slaught and kids in the back seat and every one walked away.

    I look at buying a car that has protection first.. a used SuV that is big like @Michaela G. is talking about would do the job.

    but for savings I just went Telsa.. now they are not cheap to buy but I have not bought gas since Sept.... and I drive a lot ... I charge for free at the super chargers and if I have to charge at home its at 11pm. I can schedule the charge.. full tank 3 bucks.

    you can buy a used one of those that are grandfathered into the free super chargers.. plus no oil no tune ups.. the only thing you will spend money on is tires and windshield wiper fluid. and they are hands down safest car on the road in a collision.. plus they self drive ( at least mine do)  so that's very safe as well.

    I say spend the dough to protect the kids get a second job if you need more income.. especially a fire fighter.. all you guys have two jobs.

  • Real Estate Investor · Anchorage, AK · Member since 2015 · 117 posts · 42 votes
    9y

    @Jordan Sutherland, first of all, congratulations on your success thus far.  You are killing it!!  Second of all, there is a lot to be said about happy wife, happy life, especially if her full time job is being the stay at home mom.  I'm not sure what your monthly income is, but I know from experience that it will be worth it for you to buy the car.

    Another good idea said by somebody above was to buy another rental property to increase your monthly cash flow to cover some/all of the car payment.  However, that is highly dependent on your current life situation.  Sometimes you just have to bite the bullet.  

    A good exercise may be to think about "how you can afford it".  Maybe there are some ways that you can increase your cash flow from your current rentals or some other business venture.  Maybe become a part time Uber driver.  

    Either way, good luck!

  • Investor · Orange County, CA · Member since 2015 · 2k+ posts · 3k+ votes
    9y

    Anybody know if they closed that Section 179 tax loophole for "farm equipment" that big SUVs qualify(ied) for? My developer buddy bought an Escalade ESV back in the day, and since it weighed over 6000 lbs, he was able to depreciate/deduct 100% in the year he purchased since it was heavy enough to qualify as farm equipment. God Bless America :)

  • Investor · San Francisco, CA · Member since 2015 · 306 posts · 211 votes
    9y

    You're rocking it family wise!!! CONGRATS! [As @Connor Maloney mentioned!] 

    As a female (she is actually better than me though as I have never done her incredible feat of childbirth!)-- Here are some ideas:
    1) Have her beg her family for a car-- pitch it to family as "it's for the kids".

    2) Tell her to do a  stay-at-home gig to get extra dough on the side.

    3) Say "If we wait on the car we can do all these better things [list better things that add value to your net worth]" e.g.: we can go on a family vacation instead!
    4) Tell her to look in your penny-saver for a bit of an older SUV

    5) Go through a pro & con list (weighted) and illustrate all the other things that money can buy. (Be sure to add in things that she likes.)

    6) As @James Masotti mentioned, borrow money to get a car, preferably, from friends / family and persuade the dealers to give you a ridiculously low interest rate (if they won't just walk)

  • Investor · Miami, FL · Member since 2016 · 75 posts · 23 votes
    9y

    Explain to her the difference between good and bad debt. This comes back to sales. You need to sell her the idea that you will purchase a larger car with the cash flow of the next property. That is what I will do.

  • Houston, TX · Member since 2017 · 3 posts · 0 votes
    9y

    You can search online.

  • James MasottiPro Member
    Rental Property Investor · Washington Township, NJ · Member since 2015 · 1k+ posts · 976 votes
    9y
    Originally posted by @David Faulkner:

    Anybody know if they closed that Section 179 tax loophole for "farm equipment" that big SUVs qualify(ied) for? My developer buddy bought an Escalade ESV back in the day, and since it weighed over 6000 lbs, he was able to depreciate/deduct 100% in the year he purchased since it was heavy enough to qualify as farm equipment. God Bless America :)

     For all things Section 179 you want to go to this website

    http://www.section179.org/

  • James MasottiPro Member
    Rental Property Investor · Washington Township, NJ · Member since 2015 · 1k+ posts · 976 votes
    9y
    Originally posted by @Frank Trigoso:

    Explain to her the difference between good and bad debt. This comes back to sales. You need to sell her the idea that you will purchase a larger car with the cash flow of the next property. That is what I will do.

     I'm pretty sure I am the only person on the planet that could never sell my wife anything. :)

  • Real Estate Broker · Apex, NC · Member since 2017 · 22 posts · 18 votes
    9y

    If it was me- I would buy a good Honda Odyssey- a minivan. Not touch an SUV for the mileage it gives. You don't need to have this conversation again even when all the kids go to college. We got one when my kid was 1 and is still running great after 20 odd years. Buy once. Buy good.
    In all the goals of saving and investing for the future, somethings need to be done now too to have a good life. I think with three kids, she is not being unreasonable. Make it happen for your kids to be comfortable if buying for the wife psychi doesn't click. 

    My 2 cents.

  • Real Estate Agent · Buena Park, CA · Member since 2016 · 743 posts · 424 votes
    9y
    It seems to me you need to look for ways to increase you income on a regular basis.You work for a large city Fire Dept,correct? Try working an overtime shift once a week to make a better car more affordable.You should strongly consider your wife working from home.If she has computer skills and/or secretary training,she could easily be a virtual assistant to several real estate agents who need help with their paperwork,a reservation specialist for a travel and tourism company,or another customer service specialist.There are many jobs that can be done without leaving home and neglecting the children.
  • Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
    9y

    My '03 Explorer blue books for around $3k and is great for hauling the fam (and construction materials).

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