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!!

1Reply
373 views

Most Popular Reply

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.

See this reply in the discussion

100 Replies

Jump to latestLatest
  • James MasottiPro Member
    Rental Property Investor · Washington Township, NJ · Member since 2015 · 1k+ posts · 976 votes
    9y
    Originally posted by @Jay Hinrichs:

    @David Faulkner  I bought a 435k airplane and wrote off about 400k year one..  but remember recapture is a beotch...   and in those days talk about financing I got it for 5% down  only 25k ish.

    and 5% fully amortized over 20 years so payments were only 2400 ish a month.. what a deal to go 200 mph  in style and comfort.

    I'm sure in your 10 million posts you've mentioned it some place, but what sort of plane do you have? Do you just fly locally for recreations or do you do a decent amount of cross country hopping? A friend of mine purchased a plane last year and it is very interesting...I never really thought about the financing implications and actual monthly expense associated with such a purchase and decision.

  • Houston, TX · Member since 2016 · 11 posts · 1 vote
    9y

    @Jordan Sutherland I am just barely breaking into the REI game, and my full time job is selling cars in El Paso. Let me know if you want I can hook you up with a good deal, I'm more than happy to help someone on a similar track as me and my wife!

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @James Masotti  Cirrus SR -22  NA   ( Normally Aspirated)

    pleasure and business.. being isolated in the northwest its a great time machine

    I can be in the SF bay area in 2.45 hours

    Salt lake city area 3 hours.

    La and Vegas 5 hours.

    Montana in 2 hours

    british Columbia 2 to 3 hours depending on where I am going.

    Endurance is regulated by Bladder..

    But around Oregon.. I used it mainly to look at projects and potential loans.

    Like I can leave my home base at Aurora and fly to Tillamook in 20 minutes.. drive time 2 hours one way.  Or get over to Bend in 35 to 40 minutes one way that's a 3 hour one way drive.

    it really works were there is moutains and heavy traffic

    figure for that bird about 60 to 70k  a year all in. 

  • Investor · Rochester, NY · Member since 2017 · 2 posts · 1 vote
    9y
    Originally posted by @Thomas Hickey:

    Sell the impala and buy an early 2000s Jeep Grand Cherokee with the 4.0 straight six it's a 300k mile motor.

     My cousin has been a master mechanic at a dealership for 30+ years and that is the 1 used vehicle he highly recommends buying so when I went to Virginia on vacation I bought a clean 1 while I was there, rust free 2004 Jeep Grand Cherokee Special Edition with the 4.0L straight six. They have Jeep forums dedicated to these vehicles, parts are cheap & plentiful and theres a Youtube video to fix anything that could ever go wrong with it. Its my spare vehicle to have fun with at my land and in the snow, I love the thing. 2004 was the last year they made the 4.0L straight six which is a legendary motor that will go 300K miles no problem. There were some factory recalls on the heated seats so I took it to the dealer and they fixed it at no charge and the heated seats works great. Always do a factory recall check on any used car you buy.

  • Investor · Edmonton, Alberta · Member since 2017 · 94 posts · 72 votes
    9y

    As someone who invests in houses and cars, I like to take the advise of the rich. Jim Pattinson said:

    "You buy the things that appreciate, and rent the things that depreciate."

    You rent things that are bad investments (boats, RV's, quads, computers, etc), but rent a car? We all know that new cars are throwing money down the toilet, but we all need them, right? You 'rent' a car by leasing it and writing off the payment, usually through a company. I understand that you guys need a dependable vehicle. If you will not be writing it off, then you will have to decide an amount to purchase something, but keep in mind, that $15,000 car will still be a $2500 car in a few years. 

    Real Estate and Collector Cars go up, all the other stuff just robs us of our hard earned money...

  • Real Estate Investor · Peabody, MA · Member since 2013 · 304 posts · 91 votes
    9y
    Robert V. I agree the way to go is buying something simple, old school tech durable. Everything is serviceable and designed to keep going. Just like my 20 year old 7.3 Ford diesel. Durable cars, annoying little things break but they're easy/ cheap to fix. Everyone here recommending complex vehicles like minivans and Honda CRVs are recommending to you reliable cars. These cars don't have the annoying little things breaking as often, but when things to break they are so expensive/ difficult to fix the cars are basically disposable. Remember the difference between durable and reliable when looking at vehicles. Generally anything RWD based is durable vs. FWD based reliable/ disposable
  • Investor · Richmond, VA · Member since 2017 · 32 posts · 12 votes
    9y
    I second for a minivan. A mid SUV is not enough for a couple with 3 kids - you need a lot of space for the cargo as well. Strollers, food, clothing, you name it.
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    9y

    @Natalie Kolodij I am not a Chevy fan and I have never owned one, but as far as mass produced and affordable cars, the Impala isn't horrible. I owned several Pontiacs from GM that used the same engines / transmissions and they are pretty solid. My 1998 Grand Prix drove to 250,000 and was on the road 18 years before it got in an accident. 

    This Impala should easily make it 15 years or longer. It is an exaggeration to imply that a car wouldn't last even ten years. Really any car now days will last much longer, just based on publicly available reliability data. Used 2008 Impalas are selling for $8-10K.

    @Jordan Sutherland normally I am against spending money on cars, but with your growing family there is a good case here. I would keep in mind that an SUV will demand higher resale than a used minivan. I know that a minivan isn't cool, but you can pick up a 2012 Chrysler Town and Country with 60K miles for under $15,000. You will be able to drive it for 10 years with only minor repairs. My wife drives a 2009 and we have only had one problem with a radiator hose. Other than that just tires, battery and a few recalls. Sliding doors made it easy to get the kids in and out in tight parking spots. You can probably get $8K for your Impala, so the loan would be for only $7000.

    @David Faulkner if your friend is contractor he can justify the vehicle since it is a full time business, but a part time investor owning two properties he could never justify writing off 100% of an SUV. With only two units, they should use the mileage method. Buying a vehicle to drive the kids around and claiming it 100% for business would be tax fraud.

  • Real Estate Investor · Peabody, MA · Member since 2013 · 304 posts · 91 votes
    9y
    Joe Splitrock A good alternative to a minivan is a 2007+ Ford Expedition. Interior space is similar but can tow much more and you won't feel out of place driving it lol
  • Real Estate Agent · Las Vegas, NV · Member since 2016 · 589 posts · 275 votes
    9y
    Jordan Sutherland do you have any friends that are car dealers? Ask around in your network. Texas has over 46000 dealers new and used in it. Surely someone 2nd or 3rd removed from you had one. Pay them a fee of $500 and go to the auction with them and buy your car and have them retail it to you. That way you can go the day or two ahead of the auction and walk the lot, view all the inventory running test the cars and check the auto check for title and accident/ history report. Then when the car runs you will be buying it at wholesale prices and not paying retail. Also as a former dealer myself, stick to Honda or Toyota. Best bang for your buck, parts are available and cheap and those cars outlast their American counterparts. That's my .02
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    9y
    Originally posted by @Account Closed:

    LEASE A VEHICLE

    There are plenty of ZERO DOWN lease deals to be had and as investors we love zero down. The benefits of leasing are that you make half the payment vs buying, you'll always be covered under warranty and your wife will always have a safe vehicle to transport your family. I've had my wife in a lease vehicle for 12 years and every 3 years she gets a new vehicle to drive. When you do the numbers on the lease payments you'll see that what it costs to lease a brand new vehicle for 10 years is what it would've cost you to buy a vehicle in 5 years and at the end of the 5 years what are you left with, an older used car that really isn't worth much that isn't covered under warranty. Forget the old "don't go over the miles" routine because the dealer will wash those miles when you go to get another lease vehicle and if they don't want to then tell them you're looking at their competition and they will cave. I lease 2 vehicles and got my parents into leasing and they couldn't be happier because they never have to worry about their vehicle breaking down. If it breaks down then the dealer fixes it under warranty and gives you a loaner to drive. Your payment on a used car are about the same for a new lease vehicle. I've been in sales for years so I know how to really negotiate the best deal and it isn't that hard with a lease and they will bend over backwards to earn your business when threatened with their competition. If they want a down payment for the lease you can have them wash it into the payments and negotiate some more. Do the leg work and home work and you can save yourself a bundle and have the wife driving a new, safe vehicle.

    Lease is a horrible idea in this case. You said, "When you do the numbers on lease payments you'll see what it costs to lease a brand new vehicle for 10 years is what it would've cost to buy a vehicle in 5 years". Ok so lets assume you are correct. I buy a $30,000 car and at the end of 5 years, I own it and drive it for 5 more years. You lease the same car for 10 years, trading in every three years and pay $30,000. Cars have very few repair expenses within the first ten years, but there is maintenance like tires, brakes and battery. Lets say those expenses are $2000 which is probably accurate, so at the end of ten years I have spent $32,000 in and you have spent $30,000. I decide to sell my car for $10,000 so I am ahead of you by $8,000. The math gets way better if you buy used cars. 

    Most car value is lost in the first three years, so when you lease, you are paying for that depreciation. In other words you are paying the most expensive part of a cars life cycle! Cars last 15-20 years, so the smart buyer is picking up something that is at least five years old. Five year old cars are still very new, very reliable and often still cost well over $15K. Just search car values on any website like cars.com if you don't believe me.

    The car salesman uses math to trick people into thinking a lease is a good deal. They do this by showing you the monthly cost, not total cost, so they conveniently leave out the value at the end. Salesman usually get paid more to write a lease because they are more profitable for the car companies.

  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    9y
    Originally posted by @Thomas Hickey:

    Joe Splitrock

    A good alternative to a minivan is a 2007+ Ford Expedition. Interior space is similar but can tow much more and you won't feel out of place driving it lol

    I am not against SUVs but anyone who has tried to load babies in and out of an SUV versus minivan, will agree the minvan is more mom friendly. Every mom I know with big SUV's has a tenancy to get into small accidents in parking lots. Definitely harder to maneuver big vehicles and three yelling kids never helps. Still, I would agree that used Ford SUVs are undervalued for what you get. Everyone is looking for Honda's and Toyota's so the used deals usually found with American brands. 

  • Real Estate Investor · Peabody, MA · Member since 2013 · 304 posts · 91 votes
    9y
    Joe Splitrock That could be, I'm just looking at it as more total uses for the family and imo a full size SUV is better. You can't exactly tow a bobcat to your rental property with a minivan.
  • Investor · Midlothian, VA · Member since 2014 · 38 posts · 11 votes
    9y
    I was going to echo what Zach said about buying a property to cover the car payment . If you take the approach that any liability is a waste because you could buy a asset with that money. You will never buy anything or live life. What's the point of investing if you don't use it to enjoy life and all its liabilities. Find a asset that pays for the car and get the wife the car . Then do this for every liability in your life.
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    9y
    Originally posted by @Thomas Hickey:

    Joe Splitrock

    That could be, I'm just looking at it as more total uses for the family and imo a full size SUV is better. You can't exactly tow a bobcat to your rental property with a minivan.

    Agree it just depends on your needs. My Bobcat towing days are over, been there done that and now I hire landscapers. But if you are in construction or hands with big projects at your rental than a larger truck or SUV may be better. I was just assuming his wife was hauling kids more often than towing Bobcats.

  • Real Estate Investor · Peabody, MA · Member since 2013 · 304 posts · 91 votes
    9y
    Joe Splitrock True, I suppose just my bias against minivans showing through. Car guy at heart so I've always convinced the SO to buy stuff that I like haha.
  • Real Estate Broker · Cleveland, OH · Member since 2015 · 239 posts · 224 votes
    9y

    I'm extremely anti new car.

    I would recommend that you try to find a used Toyota Sienna,  Honda Odyssey, or similar minivan or wagon.  You should't have any problem finding something nice in the 5k range.  A full size SUV is absolutely superfluous unless you're planning on doing some serious towing.  The fuel and insurance savings of the 5-10 year old minivan or wagon with also be notable. 

    The savings will go a long way towards the down payment on your next investment property.

  • Logan AllecBusiness Member
    Accountant · Los Angeles, CA · Member since 2014 · 1k+ posts · 980 votes
    9y

    Tell your wife that if she wants a new car, she needs to find something she can do from home to make an extra $10/day.  With the Internet, that's not difficult at all.  An extra $10/day would cover the a $300/month car payment.

    Clarita CPA Group516 Reviews
  • Quality Technician in a CNC Machine Shop · Rapid City, MI · Member since 2015 · 159 posts · 35 votes
    9y

    Compromise. Give her a budget to spend, of say, $4000 Max (or a number you both can live with) and she is to purchase an older fully loaded SUV that will paid for in cash.  I happen to drive a GMC Envoy XL (7 pass, fully loaded).  I had the deal fall in my lap, when I wasn't even looking.  I got it for 1/3 of its NADA Blue Book value.  Here it is 3 years later and despite having 275,000 miles on it, it drives like a dream, and the best part, no vehicle payments (and if I have to spend a little bit if it breaks down, I am ok with that).  So know, there are deals out there.....

    I wish you luck,

    Melody

  • Flipper/Rehabber · Turlock, CA · Member since 2015 · 94 posts · 30 votes
    9y
    Please check out used cars on car gurus also maybe meet halfway and buy something 6-12K.
  • Specialist · CHICAGO · Member since 2015 · 680 posts · 650 votes
    9y

    @Jordan Sutherland first of all I want to say I used to be a firefighter and retied once I made chief at WIPP just about three hours west of you. As a firefighter I was able to start investing not quite the same age as you though. I never had an extra job. I enjoyed my family and worked on my properties. Are you working on your own? I can only imagine you are trying to buy properties and then enlist your buddies in the trades to come and fix up properties for beer and pizza. Keep that up as long as you can. Now, when it come to the car, see if you can't leverage your buddies $ into a deal that you get a percentage of because you manage it and help in the renos. I was the go to for everyone's investing. I traded their stocks, picked their retirement investment accounts, and was always asked which properties they should buy. Leverage that against not having more cash.

    Next, I agree with everyone who said that you should buy another property that pays for the wife's new car. If you start an LLC (which should hold all the deeds to your properties) you can have the business buy the car IF it's primary roll will be used in the business. Get an app like Mile IQ and use it to log every time the vehicle is used for work, swipe right, personal, swipe left. It will give you a monthly print out of what your tax deduction will be for that month. At $.57 a mile...those numbers add up and will be close to covering half your car payment, even if you only use it on you off days to go to the properties/Home Depot/networking events etc. 500 miles gives you a tax right off of $285/m...thats like keeping $78 bucks extra to put to the car payment. SO, a $10k-$15k vehicle w $5k down is an easy feat to have a property pay for it.

    I also know you have seen some accidents that you were glad weren't your family. Doesn't your greatest assets deserve the best protection? I'm not saying run out and get that Tesla (though...they are sweet) but keep your family safe and do the same walkthrough on your family's vehicle that you would if you were driving the Truck. 

    As a wife and looking at having our 3rd...we are getting a mini van. Three kids in car seats...nightmare...make you wife's concerns a priority. This field is hard on marriages. SO IS FIREFIGHTING. Cherish your family first...make it work. Stay safe out there. I applaud your determination to succeed so quickly. 

    The fastest way to lose your wealth is divorce.

  • Rental Property Investor · Saint Cloud, WI · Member since 2016 · 186 posts · 63 votes
    9y
    Keep your wife happy. It's pretty simple.
  • Investor · New York, NY · Member since 2011 · 36 posts · 25 votes
    9y

    First of all, well done!!

    You are doing really well for your age and starting off on the right foot.  Keep doing what you're doing.

    Regarding your wife's 9 years old car, it may be time to upgrade as cars tend to get heavy on the maintenance at that age.  Perhaps, even getting a larger suv, for safety as well as practicality. 

    The Impala is probably larger and wider inside than most small suvs like a Honda CRV.  I would highly recommend the next size up, a Pilot.  I bought a 1 year old Pilot last year for 26k.  I'm sure you can get a 4 year old for much less. 

    It'll come in handy for road trips.  You can fit the whole family with lots of room to spare.  It's great on gas, for a large SUV. 

  • Investor · Gaithersburg, MD · Member since 2013 · 660 posts · 441 votes
    9y

    I didn't read all the responses but I have a very non-real estate answer for you.  Make sure to check your cars safety guide.  Most cars will say you should NOT have a safety seat of any kind in the middle back seat.  A lot of parents with one kid make a mistake and put the safety seat in the middle of the back seat thinking it makes it easier for adults to ride along back there.  In a lot of states, you cannot go booster free until the age of 8 and even a 6-year old often times still fits into a convertible seat.  Go by the weight and height limits, not the age of the child.

    The best advice I have for you is to take your car to one of the child safety seat programs.  They are free and almost everywhere.  You can find one by googling.  Those folks know everything about the cars and where seats can go safely.  Even if you've been before, you didn't have 3 so go again.  If they have an arrangement that works, then I'd say you could stick with what you have.  Just keep in mind, just because they fit, doesn't mean they'd be safe in an accident.

    Your kids are the #1 priority.  Make sure they are as safe as can be and if that means a bigger car to accomplish it, then you get the bigger car, regardless of your real estate goals.  Then you can argue about what to get and how much to spend.

  • Rental Property Investor · New Bern, NC · Member since 2015 · 43 posts · 22 votes
    9y
    Would you rather have a little bit more money sitting around in your bank account and wallet, or a happy family that loves you? Ultimately the decision is different based on different people and their goals/needs, but I myself went through something very similar not too long ago. I ended up bitting the bullet and buying a 2017 GMC Terrain at 40k. I can afford the monthly payments, but as you might already know, that cash could be used as a down payment for a future property. Depending on how much time you have until you need to buy a new car, consider seeking a new investment vehicle that can pay for your new vehicle. Have you considered finding a multi family property that cash flows well enough to off set your future vehicle expenses?
Join the conversationCreate a free account to reply, vote on answers and follow this thread.