Keep It or Trade It In?

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She Wants a New Car

We have a used minivan that I just love. However, as it's getting older, more and more things are going wrong with it. We are having a hard time keeping up with mechanic's fees, especially now that the warranty is over. I know that it's a matter of time before the transmission is gone again. I would like to trade it in for new car. Since we still owe some money on it, what is the best way to go about trading it in for new car?
Mrs. B. in San Antonio

Consider Keeping Old Van

Although I am not answering the question specifically, I would like to challenge you to think about something. If you are concerned with the frequent repairs of your old van and money is tight, consider this. There is essentially no repair that will cost more than months of a new van payment. Even if you made new van payments of $300 per month (or very likely more), this money would go very far in a repair shop with hopefully months of reprieve in between repairs. Maybe you'd want to consider keeping the van longer while saving for the new one.
SB in MS

Keep Ailing Minivan on Road

I would suggest that you keep the minivan until you have it paid for. You are just asking for unending debt if you try to get a new vehicle without having the current one paid for. Here is a suggestion that might be of help since you are incurring mechanic bills to keep that ailing mini-van on the road.

First, there must be a local community college near you that has an automotive program. At our local community college, they will do work on cars for the experience and the price of the parts. Most of these schools also teach auto body and do repairs for a small fee and the cost of parts. They aren't as fast as a professional mechanic shop, but they do good work and are certainly reasonable in cost. The only way you can win is to drive that minivan until it is totally paid for!

Sell Outright

The best way, financially, to handle getting a newer car is to find an older vehicle with low mileage. I learned this from Consumer Report. If you are looking for another minivan, keep Toyota in mind. You'll pay more, but it will also last longer. Remember, you can make a lot of repairs for the monthly payment that you will be making on a new vehicle.

The best way to have a down payment is to sell your vehicle outright. You will get more money for it than if you were to trade it in. If you don't want to sell it yourself, ask a dealer what your vehicle is worth on trade, but don't tell the salesman which vehicle you want to trade it in on. The salesman can maneuver the price of his vehicle according to what you are offered in trade.

Avoid a Dealer

First, sell your current van and pay off the debt. You can sell it privately, or to a dealer, although you'll probably get more by selling it privately. Previously, I sold a car for $1800, but a dealer offered me only $500 for it. Hopefully, you don't owe more than the vehicle is worth. Now, determine you much you have. If it's a few thousand, that's all you need.

The most reliable and cheap minivans available are the Plymouth Voyager and the Dodge Caravan (they are virtually the same) with the 3.0L V6 and 3 speed auto from the early 90s. It is important to find this engine and transmission. Chrysler's four-speed tranny didn't hold up the way the three speed did, and the 4 cylinder engine doesn't last very long. This combination has a very good reputation, but because it's the smaller V6 and 3 speed, it can be purchased for cheap. I bought a 1992 for $4000 with 136,000km two years ago. I've put in $200 in repairs over those two years. My friend has one with 300,000km on it, and it's still going strong.

I would avoid a dealer. Their job is to make money. If you need financing, interest rates are low. Go to a bank or similar institution. If you want a warranty, buy an after-market one (there's lots on the net).

This Works for Us!

Mrs. B and her husband might want to go for a drive like we did! When my car was starting to use too much oil, we went for a Sunday afternoon drive, which was about a 100 mile circle in our area, taking main roads. We saw many cars for sale. We came home with a beauty for $750! Yes, that's right, $750. We refuse to make car payments, as they are such a drain on your income, and totally unnecessary.

This beautiful and luxurious '91 Chrysler New Yorker is in excellent shape. Owned by an older couple, it did have nearly 200,000 miles, but needs no repairs at this time. Everything worked on it. There were no oil puddles under it, no rust, the brakes and tires were fine, it didn't smoke, and it drove like a limo. It also uses no oil. The cruise control even works! The only "problem" was a blinker light bulb that was out. Even if I do have a few repairs, we can afford it, since we have no car payments.

This car had been for sale for a month, and the price was down from $1200. The man was glad to get it out of his yard, and we were very happy to take it home. Oh yeah, the interior was immaculate, too. It had plush leather interior and the owners had never smoked in it, either!

This is how we buy cars! Not having payments and having our debt paid off allows us to both work part time.

Keep a Poker Face

First, Mrs. B. should not purchase a new vehicle, just a newer one. If she purchases a new vehicle, she is going to take a huge financial hit due to depreciation. She should shop for vehicles that are about two years old or older.

She should begin her shopping in the pages of reputable consumer publications, such as Consumer Reports, in order to learn as much as possible about the various vehicles. If the Consumer Reports' car buying guide is unavailable, she could check out their website. Among other things, she will learn about the cars' reliability and how much she can expect to pay.

Prior to dealing with a car dealership, she should read up on how to buy a car, including how to shop and negotiate price. Consumer Reports has some excellent information and advice on these subjects.

Mrs. B. should only consider a vehicle for which she can contact the previous owner. After narrowing things down to one or more vehicles, she should go home and call those owners and get as much information as possible about the car. If possible, she should ask how much the dealership paid or allowed them for the car, as this will be useful in price negotiations. She should ignore the salesman's warnings that the car may not be there when she gets back. Maybe it will, and maybe it won't. Even if it does get sold out from under her, it is not the only used car in town. No one should purchase a vehicle without knowing about its quality, history and reliability.

Once she has found a vehicle that she likes, she should consider hiring a service that will examine the vehicle for her in order to uncover hidden problems. Some of these services will meet her anywhere she wishes, such as the mall, her driveway, or even at the dealership. We have had two cars examined in this way, and found it to be well worth the money. If such a service is not available in Mrs. B's area, she should take the vehicle to a reputable mechanic to be tested.

Even if she finds the perfect car, she should try her best to maintain a poker face and not pay any more attention to that car than any other car on the lot. If she shows much interest in the car, the salesman will spot it and will be unwilling to negotiate.

After finding the vehicle that she wants, she should wait overnight before making the purchase. It's a good idea to "sleep on it" before making a purchase, especially an expensive one.
Vance in Shelbyville, KY

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