I’m seeking brilliant insights, ideas, etc on our situation. The basic facts:
- We have 2 non-running cars (a 90 Sunbird and a 90…oh, sporty thing, can’t remember, but a popular kinda car), both of which could probably be fixed up for under, say, $500 each. However, neither one will do as a family car as they are both small 2-doors and we have a family of 6.
- We also have one POS, tiny, junky car that Mrbodypoet drives, which also doesn’t help us out, family-car-wise.
- We have one broken-down-AGAIN van (this time it’s the starter, although the heater and AC is out too), with well over 120,000 miles on it. Last time I had a new transmission put in it, the mechanic handed over the keys and said, “Go trade it in. Quick.”
- We have NO credit, none whatsoever, although we can get a JD Byrider-type deal where you put down $500 and pay $200/month for a vehicle that is worth maybe $1800-2000. My trusted mechanic has a buddy who will work out a deal like that for us, if need be.
AND: 5. We just got our tax return, to the tune of $4500.
Our options:
- Use the $4500 to buy something outright, for close to that amount. (We need a van or at least a very VERY roomy four-door.)
Then get the van fixed, sell it, or donate it. (If we opt to buy something and sell the other fixable cars, we could bank that money instead.)
- Trade the van in at a JD Byrider place, and do the $500 down/$200 month on whatever decent (?) vehicle we can manage.
- Fix the van with part of the money, bank the rest, and hope for the best.
- What else? I’m sure there are options we’re missing here.
Caveats: Mrbodypoet would rather bank the entire return and just fix the van. I would rather sell the van and the other cars and buy something decent, but I understand his need to have an emergency fund. Without the tax return, we will have NO money in savings.
A compromise would be ideal, but I really have to have a reliable vehicle, and I much prefer a van or something roomy. And I’m fed up with having car troubles. 
sigh Any wisdom? Should I buy a bicycle built for six?
Thanks! karol
Ouch.
I’d go for reliable transportation first: if you bank the tax return you may end up blowing it on your POS van in two weeks anyway. And, while it’s being repaired you’ll have the oh-so wonderful scramble to figure out how to get everyone from point A to point B.
The way I’d do it is:
- Stick money in secure place while you’re doing this. It probably won’t earn enough interest to be of much use to you, but who knows.
- Shop around for best deal on new reliable transportation.
2a) See how much you’d get for your current van, and check it against the book value. Do the same for the two non-running cars, since it sounds like they’re just eating up space for you guys.
2a1) If it’s a reasonable deal, grab it.
3a2) If it’s not a good deal, donate the vehicles to someone, like the National Kidney Foundation, and use it as tax write-off for next year. (Or sell them for parts? Dunno if it would be worth it.)
- Place any money leftover from getting the van into something that’ll earn money for you, but hopefully something that will allow you to make an emergency withdrawl if you need the cash.
Best of luck!
<< Driven by a little old lady only on Sundays and never above 20 mph… >>
Thanks, Nightsong. That’s sort of the way we’re leaning right now, I think.
It looks like we can take a pretty good chunk of the tax $ and put it toward a car, and we’ll just plan on trading in the van. I know it’s better to sell it outright, but this would be simpler, and I’m afraid if we don’t trade it in, it will just sit in the drive for the next ten years.
Not sure what kind of vehicle we can come up with for $3000 plus the trade in, but hopefully it won’t be any worse than what we’re driving now!
Regards,
k
Sell all the POS vehicles (who needs 4 POS hanging around their yard?), maybe keeping one for the Mr. if he can keep one of them running for himself, and buy a nice, lightly-used car (three or four years old) with your tax return. See if you can’t make some kind of deal with the car lot so you can pay half of it up front and the other half on time, so you can build up your credit rating. A lease would also work to build up your credit rating, but I don’t care for leases because you end up with nothing at the end of the lease.
As you probably noticed, I’m pretty keen on using this windfall to build up your credit rating. My feelings towards credit are kind of split; I think it’s important to have credit available for you if you need it for some kind of dire emergency, but I personally try to never use it.
Repairing the van is OUT.
If you get it running, you’ll be tempted to keep it. Then you’ll blow the tax refund on something else. When the van breaks again, you’ll be back at square one.
Dump the van and the two non-working cars now. Get what you can for them and walk away.
Use the money from those car sales and your tax refund to buy a second-hand minivan. Spend it all. That much cash should get you a vehicle in good shape, giving you some time free of car payments and repair costs to get yourself back on your feet financial-wise.
Checking kbb.com, a '94 Chevy Lumina with 81k miles on it is about $5600 retail in my area (Seattle). You’d probably get a better deal in a private sale.
Good luck.
In addition to the fine words mentioned above:
Perhaps bank away about $500 in a savings account.
The main issue with getting a car with the remaining money is that you will be hard put to get a reliable van/station wagon for that.
One thing my husband and I did was to lease a Ford Windstar (we figured that since we were leasing a brand new vehicle, it didn’t really matter what it was, so we just looked for the best deal on a lease). Toward the end of the lease we looked around for another van and just returned the Windstar when it was up.
Having a good credit record is helpful. Also, if you lease, that dealership will have a certain amount of motivation to keep you as a customer, so they will likely ask you if you want to renew the lease, refinance the car or get another one. Since you will have a relationship with them, you may have more leeway.