Used Car Value Calculator?

[Mike Lowe]

The wife and I just bought a house. My lease expires in 2 months and I do not want to carry a car payment any longer. I plan on paying cash for a car but don't want to spend a fortune (I'm talking like $5,000 tops). With kids likely on the horizon between 1-4 years what I'm leaning towards is a used 2002 Ford Explorer with about 75,000 miles or so. We want some sort of SUV to toss the kid(s) into and I want to avoid having a car payment.

Here's my dilemma: I couldn't care less what type of car I drive to be honest, the wife wants something decent and really wanted to spend more to get something better. I'm cheap and not very materialistic and I like to invest my money elsewhere aside from a piece of tin that loses money every day. I'm also very frugal and want to do what's financially best. My question is, I'm thinking with 75,000 I should get at least 2 years out of it (I drive about 1,000 miles/mo). Anything above that is bonus. Here's the math:

Current payment on lease: $250
That's $3,000 per year to put towards justifying paying cash.
If I drive the used Explorer for 2 years I've saved at least 1,000. If it lasts me longer, awesome.

But, what if I were to double my spending and get something around $10,000, say a Jeep Grand Cherokee Lardeo with around 50,000 miles on it? Would the savings work out based on the same math above? Am I better to leave the other $5,000 in the bank for the home/mortgage payments? We could pay cash for either one, or even higher, but we also don't want to pinch every last penny into a stupid used car. I certainly don't ever want to lease again as it's just pissing money away (although it served its purpose for me just out of college). The wife's car is a 2003 with about 50,000 miles on it so down the road we'll need to replace that too. Anyway, here's the $10,000 car:

$250/mo (current payment on lease)
$3,000 per year
If I drive the $10,000 for 3 years I've saved the same amount of money as the $5,000 one. With my avg miles, I'd have another year until I hit 100,000 miles on this vehicle (for a total of 4 years) and my savings would be $4,000.

What if I take it a step further and get something for $15,000 with 25,000 miles on it?

$250/mo (current payment on lease)
$3,000 per year
If I drive the $15,000 car for 5 years I will break even. Five years would put my mileage at approx. just under 80,000. If I can sqeak out 2 more years and get to 100,000, which I am expecting to do with the other examples, I'd save $6,000.

So, scenario one I'd have a 2002 car in 2011 at 100,000 miles. (9 year old car)
***9 year old car at 100,000 with at least a $1,000 savings***

Scenario two I'd have a 2003-2005 (varies) Grand Cherokee Laredo in 2013 at 100,000 miles.
***9 year old car at 100,000 with at least a $4,000 savings***

Scenario three I'd have a 2008 Laredo (a lot with even less than 25,000 miles) with worse case scenario being 2015 before hitting the 100,000 mile marker.
***7 year old car at the MAX 100,000 miles with at least a $6,000 savings***

So, option 3? Is my thinking correct?

I feel like I'm solving story problems!

1) I would still need to figure in resale value too I guess right? Oh my gosh, my brain hurts! Option 3 is obviously the best bet here as well (and 2 is better than 1)

2) I would need to figure out what the value would be for anything over the 100,000 miles. Option 3 again?

3) How much will interest play a part? Even on $15,000 at 6% we're talking $900 so I'd still be saving $5,100 as apposed to $6,000 on option 3.

Math kids, throw me some advice here!

[SackAttack]

Can I ask, and I mean this purely in the spirit of curiosity, why the prospect of kids = SUV?

Both of my parents drove regular cars until me and my brother were of 'activity' age.

What about babies/toddlers makes an SUV a necessity? It doesn't seem like you'd drive the Explorer long enough for them to get to the youth sports/whatever age.

[Mike Lowe]

$15,000 future kid mobile, at 6% interest, would come out to $250/mo if I were to put $5,000 down and had the loan for 5 years (which I'd consider on an '08). That's $600 towards interest.

If we put $10,000 down, we'd pay $300 towards interest.

But that obviously changes the savings for scenario 3:

Now we're spending $3000 per year.

My brain really hurts now, I need someone to tell me how this compares to the $5,000 truck which would pay itself off in just 2 years (but have much higher mileage). If I were to buy another $5,000 car to take over for the one which may die at 100,000 miles (again, my bare minimum expectation) what's the best decision to make here?

[Mike Lowe]

Originally Posted by SackAttack

Can I ask, and I mean this purely in the spirit of curiosity, why the prospect of kids = SUV?

Both of my parents drove regular cars until me and my brother were of 'activity' age.

What about babies/toddlers makes an SUV a necessity? It doesn't seem like you'd drive the Explorer long enough for them to get to the youth sports/whatever age.

Yeah you're right, I'll be more specific and say that we also wanted for numerous other reasons; mostly those times when we're both frustrated saying "dang, we need to borrow so-and-so's truck" for moving, hauling material etc. We certainly DONT need an SUV more than we do but it'd be nice to have it when the need does arise.

[Mike Lowe]

For the record: I was all for spending just the $5,000 on something like the 'Plorer but when I looked at the math it made me think...I'm just worried about carrying an extra $250/mo with a new house; the Explorer is just as nice to me as the 2006 G6 I drive now! It just gets me to work and the occasional "truck" stuff I guess.

[SackAttack]

Originally Posted by Mike Lowe

Yeah you're right, I'll be more specific and say that we also wanted for numerous other reasons; mostly those times when we're both frustrated saying "dang, we need to borrow so-and-so's truck" for moving, hauling material etc. We certainly DONT need an SUV more than we do but it'd be nice to have it when the need does arise.

Okay. As long as it's going to have actual utility for you and not perceived utility that never does you any good.

[flere-imsaho]

It sounds to me like you're effectively choosing between two options:

Option 1: Buy as cheap a car as possible that'll last at least 2 years, saving the most amount of money & putting your financial situation at the least amount of risk.

Option 2: Buy a slightly more expensive used car that'll last at least 5 years, and give you utility in the bargain at the cost of more money and somewhat more risk to your financial situation.


I guess my first piece of advice is that unless you really do need a truck very often, honestly, you would be best to punt on the idea of owning a truck, SUV or Jeep. If you do this, you've accomplished two things: 1) cut out the possibility of owning a vehicle (based on the ones you mention) without great reliability combined with high mileage and 2) given yourself a lot more options (and more affordable options) amongst the sedan set.

Following on from that, my second piece of advice would be to get a used Toyota Corolla or Honda Civic or (spending a little more money) a used Toyota Camry or Honda Accord. Reliable, relatively cheap to repair, and will do just fine holding kids in their car seats for the first 5 years you're going to own the car. At that point you could look at something else.

For reference, my 1999 Corolla is worth about $2,000 max, right now, so that's probably the bottom range if you look at these four models. We feel just fine transporting 5-month-old Samuel in this car, in his car seat, and the car has been very reliable (even starts when parked outside in -10 degree weather!).

As for all the math - it looks correct to me - just make sure you're taking into account repair costs, both in the likely frequency of repairs as well as the cost of parts & labor (i.e. this is not the time to get a German car).

[SackAttack]

Originally Posted by flere-imsaho

It sounds to me like you're effectively choosing between two options:

Option 1: Buy as cheap a car as possible that'll last at least 2 years, saving the most amount of money & putting your financial situation at the least amount of risk.

Option 2: Buy a slightly more expensive used car that'll last at least 5 years, and give you utility in the bargain at the cost of more money and somewhat more risk to your financial situation.


I guess my first piece of advice is that unless you really do need a truck very often, honestly, you would be best to punt on the idea of owning a truck, SUV or Jeep. If you do this, you've accomplished two things: 1) cut out the possibility of owning a vehicle (based on the ones you mention) without great reliability combined with high mileage and 2) given yourself a lot more options (and more affordable options) amongst the sedan set.

Following on from that, my second piece of advice would be to get a used Toyota Corolla or Honda Civic or (spending a little more money) a used Toyota Camry or Honda Accord. Reliable, relatively cheap to repair, and will do just fine holding kids in their car seats for the first 5 years you're going to own the car. At that point you could look at something else.

For reference, my 1999 Corolla is worth about $2,000 max, right now, so that's probably the bottom range if you look at these four models. We feel just fine transporting 5-month-old Samuel in this car, in his car seat, and the car has been very reliable (even starts when parked outside in -10 degree weather!).

As for all the math - it looks correct to me - just make sure you're taking into account repair costs, both in the likely frequency of repairs as well as the cost of parts & labor (i.e. this is not the time to get a German car).

This is really what I was getting at, but flere put it better than I could.

How much moving do you plan to do in the next 3-5 years?

[mauchow]

If you can get a good rate, 3.9%, why not take it and invest the 'down payment' into something that will return more than 3.9%?

Oh, because the economy sucks right now.

[wade moore]

I'm not trying to be snarky here - but if you're looking for value why would you be considering an older Ford with 75,000 miles or good god, a Jeep? Why would you not be looking at a Japanese SUV where you get it at 75,000 miles and at 12,000 miles a year it's good for another 5-7 years?