Buy a vehicle cash or finance?

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jsapiandante
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Buy a vehicle cash or finance?

Post by jsapiandante »

Hi all,

I wanted your input about our upcoming vehicle purchase. My DW and I are expecting our first child in September and she's pushing me into buying an SUV for our growing family. Currently, we both drive a 2000 Toyota Camry and a 2009 Honda Accord with 150k+ miles in it that are fully paid off. We haven't had any serious issues with it but she has concerns about its safety due to their respective age. I've tried convincing her that our current vehicles is all we need, but she's dead set on needing a bigger vehicle for its safety purposes and our plan to have another child in the coming years. I'm not going to argue any further with her (happy wife happy life).

The good thing is that we've been saving for a new car for the past 4 years in the hopes that we'd need to replace one of the cars should they break down. Currently, we have $25k to put down on a new vehicle.

We've decided to get a brand new 2017 Subaru Forester. After negotiating with several dealerships, we were able to get a quote (including taxes and fees) of $24,987. Since we have excellent credit, we qualified for their 0% financing for 48 months. I'm torn between paying it off in full, or finance it (since it's basically free money) and invest instead. What would you do? And why? Thanks in advance for all your input.

Joseph
mortfree
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Re: Buy a vehicle cash or finance?

Post by mortfree »

I would finance the car.

Determine what you want your monthly payment to be and then, if necessary, put down that amount of cash.

For instance,

24987.... $520.56
23987.... $499.73
22987.... $478.90
21987.... $458.06
20987.... $437.23
adksherm
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Re: Buy a vehicle cash or finance?

Post by adksherm »

If it really is zero interest you should borrow but sometimes cash gives you a discount that makes the loan cost more than zero.
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CAsage
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Re: Buy a vehicle cash or finance?

Post by CAsage »

I'd finance it and put the payments on autopilot! You can easily get 2% on a conservative bond fund for the next couple years, and you will be ahead. Slightly! Interest rates aren't much, but you would be ahead! If you feel that the cashflow would be stressing, then don't.
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fandango
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Re: Buy a vehicle cash or finance?

Post by fandango »

Be sure to check all the fees with the 0% loan from Subaru. Sometimes a few things are added here and there (I have seen $2000) to get the loan.
Afty
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Re: Buy a vehicle cash or finance?

Post by Afty »

adksherm wrote:If it really is zero interest you should borrow but sometimes cash gives you a discount that makes the loan cost more than zero.
Yes, be careful of this. Often these 0% loan deals have an alternative that gives a discount or rebate if you pay cash.
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jsapiandante
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Re: Buy a vehicle cash or finance?

Post by jsapiandante »

They're letting me put down up to $2500 with credit card. I can use my double cash to get back $50 and finance the rest. Thanks for your input! You've just validated what I thought was the better option. Cash flow isn't much of an issue since we are saving 50% of our after-tax income after maxing our tax deferred space and Roth.
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jsapiandante
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Re: Buy a vehicle cash or finance?

Post by jsapiandante »

Afty wrote:
adksherm wrote:If it really is zero interest you should borrow but sometimes cash gives you a discount that makes the loan cost more than zero.
Yes, be careful of this. Often these 0% loan deals have an alternative that gives a discount or rebate if you pay cash.
I've brought this up to them about getting a discount if I pay cash. The salesman says this is as low as they'll go as they are giving it to me well below invoice price.
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Helo80
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Re: Buy a vehicle cash or finance?

Post by Helo80 »

Heads up, Subs are up about 10% from 2016 sales. So, dealers are going to hold the cards in the negotiation right now and if you won't pay their asking price (within reason) somebody else will. I have no idea where your price sits, but thought I'd throw this out for ya.
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SeeMoe
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Re: Buy a vehicle cash or finance?

Post by SeeMoe »

Pay off the car STAT! Your credit union has low usery rates and that is the only interest you will have to pay. Then pay that loan off fast! Be free of debt for awhile and enjoy it by saving more until the next cycle begins...

SeeMoe.. :?
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bloom2708
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Re: Buy a vehicle cash or finance?

Post by bloom2708 »

Interesting car pick. With 1 or 2 kids, the Subaru won't really be any bigger than the Camry or Accord.

The Forester isn't really much bigger than the Camry/Accord. It likely has newer safety features especially if you get the eyesight package.

You get the second kid and you will be entering mini-van zone years. Strollers, bags, pack n play. The Subbie will feel "tight" and you'll be looking again.

There are a lot of good car threads out here to browse. Read some with your wife. I do not like "happy wife, happy life" or being "pushed" into a decision. How about saving up (the projected monthly payment or more) between now and the child being born. Try to actually pay for a chunk of the new car.

1 kid in an Accord or Camry fits completely fine. Much wisdom out here, take your time and don't rush the decision.
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Jack FFR1846
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Re: Buy a vehicle cash or finance?

Post by Jack FFR1846 »

It will indeed be easier to get a baby seat in/out of a Forester than with a sedan. Been there, done that. Will it be safer? I wouldn't assume this without looking at actual crash ratings. I know Subarus are typically near the top but would want to look at the numbers.

For the finance part, sure, take the zero percent. I've done plenty of deals for Subarus and the factory typically offers exactly one incentive on a vehicle. If it's zero percent, they don't have any alternate cash offer. Take the zero percent, set to auto pay and be done with it. Last I knew, Subaru goes through Chase and it's pretty smooth.
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takeshi
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Re: Buy a vehicle cash or finance?

Post by takeshi »

jsapiandante wrote:What would you do? And why?
Not what you're asking but I'd also recommend carefully reconsidering the vehicle choice for reasons stated above and not rushing the decision. Make sure you're buying based on what you're looking for versus trying to justify a decision you've already made.

Looking at the specs (granted, spec sheet racing has its limitations and caveats) the Forester doesn't offer significantly more room than your Camry aside from rear legroom though the increased height will be of some benefit with loading and unloading children. However, it's your call if that covers your need for "bigger". As for safer, the Forester probably is safer than a Camry 17 years it senior but, again, don't assume.

I personally don't care for minivans but I don't have or plan to have kids. If I did, I'd be looking at them though. I'm not saying that the Forester isn't right for you. There just isn't enough in your post for me to see your thought process on selection.
Last edited by takeshi on Fri Jul 07, 2017 9:51 am, edited 7 times in total.
stats99
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Re: Buy a vehicle cash or finance?

Post by stats99 »

I like getting the Subbie now to replace the 17 year old Camry , and then figure in 5 years, with a second kid, you can replace the then 12 year old Honda with a mini or bigger SUV and hold the Forrester as a second car.

I have a 2017 Forester...like it....spent 3 years reviewing CUVs. I like the Eyesight, consider that as in 5-10 years all that may be standard. I paid $27k for Premium with eyesight.
stoptothink
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Re: Buy a vehicle cash or finance?

Post by stoptothink »

takeshi wrote:
jsapiandante wrote:What would you do? And why?
Not what you're asking but I'd also recommend carefully reconsidering the vehicle choice for reasons stated above and not rushing the decision. Make sure you're buying based on what you're looking for versus trying to justify a decision you've already made.
This. If you want a new car, get a new car, but trying to justify it by saying a you need a new car because mid-size sedans don't provide enough room for a family with a single child doesn't make any sense.
livesoft
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Re: Buy a vehicle cash or finance?

Post by livesoft »

We took a 0% loan in your situation. That is, after negotiating the price and starting to write a check for the vehicle, they offered us a 0% loan for 3 years. We put the money in the stock market and made about 25% investing over the course of the 3 year loan.
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ETadvisor
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Re: Buy a vehicle cash or finance?

Post by ETadvisor »

bloom2708 wrote:Interesting car pick. With 1 or 2 kids, the Subaru won't really be any bigger than the Camry or Accord.

The Forester isn't really much bigger than the Camry/Accord. It likely has newer safety features especially if you get the eyesight package.

You get the second kid and you will be entering mini-van zone years. Strollers, bags, pack n play. The Subbie will feel "tight" and you'll be looking again.

There are a lot of good car threads out here to browse. Read some with your wife. I do not like "happy wife, happy life" or being "pushed" into a decision. How about saving up (the projected monthly payment or more) between now and the child being born. Try to actually pay for a chunk of the new car.

1 kid in an Accord or Camry fits completely fine. Much wisdom out here, take your time and don't rush the decision.
+1 - Two kids under 5 and the larger SUV (i.e. Honda Pilot) is perfect. The trunk always has 2 to 3 strollers in it. Never owned a Subaru but I assume forester is compact SUV. I would not get a compact SUV during the stroller years.
GuyFromGeorgia
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Re: Buy a vehicle cash or finance?

Post by GuyFromGeorgia »

I agree with one of the previous posters in that the new car won't be much bigger than what you have now, also likely not much more safe. I recommend keeping the cars you have for your first kid and see how you feel once you have a second kid. I've got 3 kids and wish I could have stayed put as we were going into our first kid. Instead, I bought a small SUV ( Ford Escape ) and before I knew it I had out-grown it and needed another. Going into our 3rd kid my DW got a minivan (Toyota Sienna) and I got a full sized 3rd row SUV (Lexus GX).

To your question, whenever I get a new-to-me car, I will finance if I can get at or under 2%. I do this even if I have cash in the bank. I pay it down aggressively over 1-2 years. My goal is to always ensure I have appropriate cashflow and emergency savings.
PowDay
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Re: Buy a vehicle cash or finance?

Post by PowDay »

We've decided to get a brand new 2017 Subaru Forester.
How tall are you and your wife? I have a 2015 Forester and once the rear facing car seats are installed, I can no longer sit comfortably in the passenger seat, and can't safely drive the car from the drivers.

We now have a second on the way, and have to sell the Forester since it can't do two rear facing car seats.

For slightly more you can get an outback that has significantly more space.
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Re: Buy a vehicle cash or finance?

Post by Jack FFR1846 »

I think to be clear, he's not getting the Forester because it's bigger....or because it's safer. He's getting it because his wife wants it. Perfectly reasonable reason. If she wanted a Miata, you could ask the same questions about how to pay for it. Chances are, she'd be in the Miata if that was her preference.

I've had both my kids in my Shelby Cobra when I owned that. No air bags, crumple zones, eye site, stability control (or heater or windshield wipers or radio). Best car ever made to put kids to sleep with the loud sidepipe just outside the door.
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bloom2708
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Re: Buy a vehicle cash or finance?

Post by bloom2708 »

One idea is to find someone with a kid and borrow their rear facing car seat with a base unit. We had a car seat with 2 base units and kept the base units secured in each car. The car seat just snaps in.

Test that in the Forester with the car seat in place. Then see how much space the driver and passenger has in between the seat.

Actually, try this with the Camry/Accord too. My wife and I did a "she drops off" and "I pick up" from daycare. Not sure if daycare will be in the mix.

I guess, my point was to not rush into spending $27k on a financed car that may not work any better than your current cars.

We brought our first kid home in a 1978 Ford F-150 2WD pickup with the car seat "in the middle" on the bench seat. We made it home.
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alfaspider
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Re: Buy a vehicle cash or finance?

Post by alfaspider »

bloom2708 wrote:One idea is to find someone with a kid and borrow their rear facing car seat with a base unit. We had a car seat with 2 base units and kept the base units secured in each car. The car seat just snaps in.

Test that in the Forester with the car seat in place. Then see how much space the driver and passenger has in between the seat.

Actually, try this with the Camry/Accord too. My wife and I did a "she drops off" and "I pick up" from daycare. Not sure if daycare will be in the mix.

I guess, my point was to not rush into spending $27k on a financed car that may not work any better than your current cars.

We brought our first kid home in a 1978 Ford F-150 2WD pickup with the car seat "in the middle" on the bench seat. We made it home.
You will be fine with a car seat in any of these cars. A handy resource for shopping and kid seats:

https://www.cars.com/news/car-seat-check/

As far as the 1978 F-150- you made it home, but I'm guessing the little one would have fared poorly had you crashed. Modern car seats give them a fighting chance.
bloom2708
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Re: Buy a vehicle cash or finance?

Post by bloom2708 »

alfaspider wrote: As far as the 1978 F-150- you made it home, but I'm guessing the little one would have fared poorly had you crashed. Modern car seats give them a fighting chance.
Define "fine" as a previous poster said, if you are tall with a rear facing car seat, you won't be fine. $27k for not fine isn't fine.

It was a up to par rear facing car seat with base unit. I just happened to be driving that pickup in 1999.
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PowDay
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Re: Buy a vehicle cash or finance?

Post by PowDay »

bloom2708 wrote:
alfaspider wrote: As far as the 1978 F-150- you made it home, but I'm guessing the little one would have fared poorly had you crashed. Modern car seats give them a fighting chance.
Define "fine" as a previous poster said, if you are tall with a rear facing car seat, you won't be fine. $27k for not fine isn't fine.

It was a up to par rear facing car seat with base unit. I just happened to be driving that pickup in 1999.
Rear facing is also no longer a temporary thing, most states are changing their laws to be mandatory rear facing until 2, and it's recommended that kids stay rear facing until 3-4 depending on their weight.

If you plan to have two kids, you could be looking at 8 years of rear facing car seats.
bloom2708
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Re: Buy a vehicle cash or finance?

Post by bloom2708 »

PowDay wrote: Rear facing is also no longer a temporary thing, most states are changing their laws to be mandatory rear facing until 2, and it's recommended that kids stay rear facing until 3-4 depending on their weight.

If you plan to have two kids, you could be looking at 8 years of rear facing car seats.
I didn't mean to imply they could choose rear facing (or not). I agree with 2 or 3 kids, you have a rear-facing car seat or 2 for 5-6-7 years.

:|
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Re: Buy a vehicle cash or finance?

Post by deltaneutral83 »

I always get a chuckle out of the "well my wife wants a safer car" and is uneasy/nervous/concerned about what they currently have. A) If my wife was fine with me operating the "unsafe" car I myself would be nervous. B) Safe car does not equal brand new car, if so, one would be getting a new car every 12 months. I don't think replacing a 15+ year old car is ever a bad idea but I'd be getting rid of a car that was 6 months old if it were truly unsafe, and I'd pass that advice on to all my relatives, not just the ones with minor children. OP's story isn't really all that much of an issue as I know people in general who replace new cars every three years and claim the "safety" issue as the rationale.
aceoperations
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Re: Buy a vehicle cash or finance?

Post by aceoperations »

We bought a new Prius V when we had our first child 2 years ago. Going with a non-0% loan made the car $1,500 cheaper because the dealership gets cash credit for getting someone to sign on a loan. The deal was that, once the dealership got their cut for the loan, I could go in and pay it off in cash with no prepayment penalties. So, that's exactly what I did. I signed up for a 3% loan, and then paid $5000 using my credit card (2% back) and then wrote a check for the rest of it.

It is a little long winded I know. I also had some headaches later because the loan was "created" but paid off soon, and that caused some confusion with getting the title released. Then the title was sent to the wrong address. :oops: A bunch of phone calls and almost a year later, the title came in the mail.
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goingup
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Re: Buy a vehicle cash or finance?

Post by goingup »

I have to say there is a special joy associated with paying for a car in cash. No monthly payment annoyance. Just simple. Since it was always your plan to save cash to purchase the car outright, I'd execute the plan. You know what they say...good planning is its own reward. :beer
alfaspider
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Re: Buy a vehicle cash or finance?

Post by alfaspider »

bloom2708 wrote:
alfaspider wrote: As far as the 1978 F-150- you made it home, but I'm guessing the little one would have fared poorly had you crashed. Modern car seats give them a fighting chance.
Define "fine" as a previous poster said, if you are tall with a rear facing car seat, you won't be fine. $27k for not fine isn't fine.
I suppose if you are sufficiently tall, any car is a problem. But someone who is 6 foot can fit with a rear facing car seat in any of those cars. I have an infant car seat in my car (Subaru WRX STI), which is smaller than any of them, and I am right around 6 foot. It's also worth noting that you don't need to fit EVERY car seat, just one. Some are more bulky than others.
Afty
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Re: Buy a vehicle cash or finance?

Post by Afty »

I'm on your side (or your wife's side) and wouldn't be totally comfortable with my kids riding around in a 17 year old Camry. I also agree with the other posters that if you're going to buy an SUV now with the plan to have another kid, consider a larger one. Having 3 rows becomes very convenient once you have two kids -- you'll start driving their friends around, or maybe a grandparent will come to visit and need to ride with you. A minivan would also be a good choice -- not strictly necessary, but very convenient and comfortable.
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beyou
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Re: Buy a vehicle cash or finance?

Post by beyou »

I have a Forester, had a minivan when the kids were young.
Overall greatly prefer the Forester over a minivan.
Also prefer it over any sedan.

As to financing, if you are sure you got the best price possible, and they still give you 0% why not ?
But that rate is always in lieu of a cash rebate. No free lunches.
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TSquare
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Re: Buy a vehicle cash or finance?

Post by TSquare »

as per the usual, this thread has veered off course into debating whether or not the OP should buy a Forrester.

OP I don't care what car you buy. I'd put down the maximum allowed that still qualifies you for the 0% rate, invest half of the remaining amount, save the balance for the hospital bills associated with the birth of your first child, and take your wife out to a nice dinner. When the baby comes, those nice dinners out will be fewer and farther between.

-tsquare
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VA_Gent
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Re: Buy a vehicle cash or finance?

Post by VA_Gent »

If you take the loan at 0% and auto pay the loan out of an account that holds the cash and reinvest interest. You are only ahead by $750 after tax at a 2% rate after 48 months. Sounds like a hassle and getting a guaranteed 2% rate is not that easy today. At 1% you are $350 ahead.
Conclusion: no big deal either way.
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westcoast
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Re: Buy a vehicle cash or finance?

Post by westcoast »

The Honda CR V, is a good alternative. Has lots of room for baby seats and everything you need for the kids for near the same price. I don't think they have 0 percent financing..
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jsapiandante
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Re: Buy a vehicle cash or finance?

Post by jsapiandante »

Thanks for everyone's suggestions!
stats99 wrote:I like getting the Subbie now to replace the 17 year old Camry , and then figure in 5 years, with a second kid, you can replace the then 12 year old Honda with a mini or bigger SUV and hold the Forrester as a second car.

I have a 2017 Forester...like it....spent 3 years reviewing CUVs. I like the Eyesight, consider that as in 5-10 years all that may be standard. I paid $27k for Premium with eyesight.
I like this train of thought. If or when we do decide to have our second child, my Accord might need replacing by then and may need to get a bigger vehicle. The decision to have a second child is still very up in the air. We will probably see how we can manage financially the first few years with our first child and go from there. quote="PowDay"]
We've decided to get a brand new 2017 Subaru Forester.
How tall are you and your wife? I have a 2015 Forester and once the rear facing car seats are installed, I can no longer sit comfortably in the passenger seat, and can't safely drive the car from the drivers.

We now have a second on the way, and have to sell the Forester since it can't do two rear facing car seats.

For slightly more you can get an outback that has significantly more space.[/quote]

I'm 5'9'' and she's 5'3''. I don't think our size will be much of an issue. The outback is just a little outside our price range. Another reason she wants an SUV over using our sedan is the ease of moving stuff in and out of the car. She's very petite and will most likely drive the Forester around while I'm at work. She's scared to drive any car bigger than that. We tested the Forester a few weeks ago and she's comfortable with the size and space it provides. We also looked at the CR-V and Rav 4 but she states that it still felt like driving a sedan.
bloom2708 wrote:One idea is to find someone with a kid and borrow their rear facing car seat with a base unit. We had a car seat with 2 base units and kept the base units secured in each car. The car seat just snaps in.

Test that in the Forester with the car seat in place. Then see how much space the driver and passenger has in between the seat.

Actually, try this with the Camry/Accord too. My wife and I did a "she drops off" and "I pick up" from daycare. Not sure if daycare will be in the mix.

I guess, my point was to not rush into spending $27k on a financed car that may not work any better than your current cars.

We brought our first kid home in a 1978 Ford F-150 2WD pickup with the car seat "in the middle" on the bench seat. We made it home.
We will have two base units to put in my Accord and the Forester.
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Re: Buy a vehicle cash or finance?

Post by H-Town »

jsapiandante wrote:Hi all,

I wanted your input about our upcoming vehicle purchase. My DW and I are expecting our first child in September and she's pushing me into buying an SUV for our growing family. Currently, we both drive a 2000 Toyota Camry and a 2009 Honda Accord with 150k+ miles in it that are fully paid off. We haven't had any serious issues with it but she has concerns about its safety due to their respective age. I've tried convincing her that our current vehicles is all we need, but she's dead set on needing a bigger vehicle for its safety purposes and our plan to have another child in the coming years. I'm not going to argue any further with her (happy wife happy life).

The good thing is that we've been saving for a new car for the past 4 years in the hopes that we'd need to replace one of the cars should they break down. Currently, we have $25k to put down on a new vehicle.

We've decided to get a brand new 2017 Subaru Forester. After negotiating with several dealerships, we were able to get a quote (including taxes and fees) of $24,987. Since we have excellent credit, we qualified for their 0% financing for 48 months. I'm torn between paying it off in full, or finance it (since it's basically free money) and invest instead. What would you do? And why? Thanks in advance for all your input.

Joseph
Since it's free money, I would finance it and invest instead. Even a 4 year CD would get you at least 2-3% return each year.
researcher
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Re: Buy a vehicle cash or finance?

Post by researcher »

You get the second kid and you will be entering mini-van zone years. Strollers, bags, pack n play.
I personally don't care for minivans but I don't have or plan to have kids. If I did, I'd be looking at them though.
with a second kid, you can replace the then 12 year old Honda with a mini or bigger SUV
Two kids under 5 and the larger SUV (i.e. Honda Pilot) is perfect. The trunk always has 2 to 3 strollers in it. Never owned a Subaru but I assume forester is compact SUV. I would not get a compact SUV during the stroller years.
I also agree with the other posters that if you're going to buy an SUV now with the plan to have another kid, consider a larger one. Having 3 rows becomes very convenient once you have two kids.
I'm baffled by all of the suggestions to buy a minivan or 3-row SUV. This advice is pure insanity in my opinion.
The OP's first child isn't even born yet and there may not even be a second child in the future. Even if there is a second child 5 years from now, there is absolutely no need for a minivan or 3-row SUV.

I have 2 young kids and own a midsize sedan and compact SUV.
There is no problem getting kids in/out of either vehicle and plenty of room in both for day-to-day travel.
We've taken countless road trips in the compact SUV (2hrs-13hrs one way) and never needed or wanted more room.

I can't imagine what these people are hauling around that necessitates a minivan/large SUV.
Unless you regularly transport more than 2 adults along with the 2 kids, there is simply no need.
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VA_Gent
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Re: Buy a vehicle cash or finance?

Post by VA_Gent »

[/QUOTE]Since it's free money, I would finance it and invest instead. Even a 4 year CD would get you at least 2-3% return each year.[/quote]

It needs to be a risk free rate on the $25,000, otherwise you are just speculating with your "new car money fund"
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stoptothink
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Re: Buy a vehicle cash or finance?

Post by stoptothink »

researcher wrote: I'm baffled by all of the suggestions to buy a minivan or 3-row SUV. This advice is pure insanity in my opinion.
The OP's first child isn't even born yet and there may not even be a second child in the future. Even if there is a second child 5 years from now, there is absolutely no need for a minivan or 3-row SUV.

I have 2 young kids and own a midsize sedan and compact SUV.
There is no problem getting kids in/out of either vehicle and plenty of room in both for day-to-day travel.
We've taken countless road trips in the compact SUV (2hrs-13hrs one way) and never needed or wanted more room.

I can't imagine what these people are hauling around that necessitates a minivan/large SUV.
Unless you regularly transport more than 2 adults along with the 2 kids, there is simply no need.
One of the many odd American cultural norms. For some reason, Americans require much larger cars than the rest of the world. Just like with a home, I prefer not to spend more just to get more space that I'll never actually use.
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lthenderson
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Re: Buy a vehicle cash or finance?

Post by lthenderson »

jsapiandante wrote:I've brought this up to them about getting a discount if I pay cash. The salesman says this is as low as they'll go as they are giving it to me well below invoice price.
I have found that the act of writing a check in a lesser amount and sliding it over the desk will almost always get a discounted price over financing. Of course you have to be there in person for this to work and that isn't a very popular position on this forum.

A zero percent loan also isn't "free". You have to spend a fair bit of extra time sitting in the finance department, setting up the automatic payments, dealing with the title down the road, adding the lender to your car insurance policy, etc. It isn't worth the $450 savings assuming you get 2% on the difference between the cost of the car and the required down payment.
ETadvisor
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Re: Buy a vehicle cash or finance?

Post by ETadvisor »

researcher wrote:
You get the second kid and you will be entering mini-van zone years. Strollers, bags, pack n play.
I personally don't care for minivans but I don't have or plan to have kids. If I did, I'd be looking at them though.
with a second kid, you can replace the then 12 year old Honda with a mini or bigger SUV
Two kids under 5 and the larger SUV (i.e. Honda Pilot) is perfect. The trunk always has 2 to 3 strollers in it. Never owned a Subaru but I assume forester is compact SUV. I would not get a compact SUV during the stroller years.
I also agree with the other posters that if you're going to buy an SUV now with the plan to have another kid, consider a larger one. Having 3 rows becomes very convenient once you have two kids.
I'm baffled by all of the suggestions to buy a minivan or 3-row SUV. This advice is pure insanity in my opinion.
The OP's first child isn't even born yet and there may not even be a second child in the future. Even if there is a second child 5 years from now, there is absolutely no need for a minivan or 3-row SUV.

I have 2 young kids and own a midsize sedan and compact SUV.

There is no problem getting kids in/out of either vehicle and plenty of room in both for day-to-day travel.
We've taken countless road trips in the compact SUV (2hrs-13hrs one way) and never needed or wanted more room.

I can't imagine what these people are hauling around that necessitates a minivan/large SUV.
Unless you regularly transport more than 2 adults along with the 2 kids, there is simply no need.
I have 2 young kids (preschooler and toddler) and own compact sedan and large SUV.

Isn't the aggregate price similar to midsize sedan and compact SUV assuming all bought new base models
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munemaker
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Re: Buy a vehicle cash or finance?

Post by munemaker »

Jack FFR1846 wrote:
I've had both my kids in my Shelby Cobra when I owned that. No air bags, crumple zones, eye site, stability control (or heater or windshield wipers or radio). Best car ever made to put kids to sleep with the loud sidepipe just outside the door.
Not likely both at the same time since a Shelby Cobra has only two seats. Was it an original Shelby Cobra or a replica?
researcher
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Re: Buy a vehicle cash or finance?

Post by researcher »

ETadvisor wrote:Isn't the aggregate price similar to midsize sedan and compact SUV assuming all bought new base models
I'm not sure what your point is.

We are talking about the need/recommendation to run out and purchase a minivan or 3-row SUV as soon as you have a kid.
We're not evaluating the combined price of two hypothetical vehicles. The OP already owns two midsize sedans.
mega317
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Re: Buy a vehicle cash or finance?

Post by mega317 »

lthenderson wrote: I have found that the act of writing a check in a lesser amount and sliding it over the desk will almost always get a discounted price over financing.
Sorry if I'm being dense but can you clarify this? Do you mean after you've been told the "lowest" price you write out a check for less than that as a negotiating tactic?
https://www.bogleheads.org/forum/viewtopic.php?t=6212
jharkin
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Re: Buy a vehicle cash or finance?

Post by jharkin »

researcher wrote:
You get the second kid and you will be entering mini-van zone years. Strollers, bags, pack n play.
I personally don't care for minivans but I don't have or plan to have kids. If I did, I'd be looking at them though.
with a second kid, you can replace the then 12 year old Honda with a mini or bigger SUV
Two kids under 5 and the larger SUV (i.e. Honda Pilot) is perfect. The trunk always has 2 to 3 strollers in it. Never owned a Subaru but I assume forester is compact SUV. I would not get a compact SUV during the stroller years.
I also agree with the other posters that if you're going to buy an SUV now with the plan to have another kid, consider a larger one. Having 3 rows becomes very convenient once you have two kids.
I'm baffled by all of the suggestions to buy a minivan or 3-row SUV. This advice is pure insanity in my opinion.
The OP's first child isn't even born yet and there may not even be a second child in the future. Even if there is a second child 5 years from now, there is absolutely no need for a minivan or 3-row SUV.

I have 2 young kids and own a midsize sedan and compact SUV.
There is no problem getting kids in/out of either vehicle and plenty of room in both for day-to-day travel.
We've taken countless road trips in the compact SUV (2hrs-13hrs one way) and never needed or wanted more room.

I can't imagine what these people are hauling around that necessitates a minivan/large SUV.
Unless you regularly transport more than 2 adults along with the 2 kids, there is simply no need.
I am VERY impressed you amanaged a road trip with kids in a CUV.

When my wife got pregnant with our twins I drove a hatchback and she a Corolla. I resisted buying something larger but when we tried mounting two car seats in the corolla and I saw that would put the steering wheel in my lap I gave in.

We got a 3 row and I've never regretted it. We take week long road trips often and go to destinations like national parks where we are staying in rental houses or condos and can't count on a hotel lending us kid supplies. We usually stay in rental houses and cook. With 2 kids in car seats you absolutely pack the back with the 3rd row down...

2 large suitcase for parents ( or more... my wife seems to fill up 2 by herself ;) )
2x (or more) bags for kids clothes, toys, etc
2x diaper bag
2x pack and play (to use as travel crib)
2x travel high chair
Outdoor gear, beach gear, etc
Cooler/food

(The above list for example when we took the kids 8hours north for a week in Acadia NP at age 3)
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SmileyFace
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Re: Buy a vehicle cash or finance?

Post by SmileyFace »

I've taken advantage of Subaru 0% in the past - free money with no extra fees nor alternative incentives (obviously still negotiate as normal). Money in the bank - put it on auto-pay.
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Re: Buy a vehicle cash or finance?

Post by Vanguard Fan 1367 »

VA_Gent wrote:
Since it's free money, I would finance it and invest instead. Even a 4 year CD would get you at least 2-3% return each year.[/quote]

It needs to be a risk free rate on the $25,000, otherwise you are just speculating with your "new car money fund"[/quote]


I "speculate" by buying Vanguard's Long Term Corporate Bond fund, which currently has a 30 day yield of 4.23 percent.

We got out our Excel program and put in 25000 at 4.23 percent compounded monthly and came out with 29,600. So you could gamble that the Feds will keep up this low interest rate environment for 4 years and get 4,600 cash.

I have always paid cash for my cars. I am self employed, and if I am out diving and an eel bites off my hand I lose my income. So I am not sure if I would want to take out a 4 year loan.
Upton Sinclair: "It is difficult to get a man to understand something when his salary depends on his not understanding it."
ETadvisor
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Re: Buy a vehicle cash or finance?

Post by ETadvisor »

researcher wrote:
ETadvisor wrote:Isn't the aggregate price similar to midsize sedan and compact SUV assuming all bought new base models
I'm not sure what your point is.

We are talking about the need/recommendation to run out and purchase a minivan or 3-row SUV as soon as you have a kid.
We're not evaluating the combined price of two hypothetical vehicles. The OP already owns two midsize sedans.
The discussion did skew off topic from OP, however my point (and others agree) is to consider a larger SUV. Both of the OP cars will soon need to be replaced unless they plan on becoming a 1 car family. I assume the cost of the vehicles is a factor when deciding on purchasing cars. :shock: I am simply informing of another option to consider for a growing family of 4 is the Honda Pilot and Mazda 3 rather than a Honda CRV and Mazda 6 as I believe the aggregate cost is similar. Obviously the OP can select equivalent for Subaru, Honda, Toyota, Mazda, etc.
ETadvisor
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Re: Buy a vehicle cash or finance?

Post by ETadvisor »

We got a 3 row and I've never regretted it. We take week long road trips often and go to destinations like national parks where we are staying in rental houses or condos and can't count on a hotel lending us kid supplies. We usually stay in rental houses and cook. With 2 kids in car seats you absolutely pack the back with the 3rd row down...
+1
If you are active, we were gifted the jogger (bob) stroller. It is excellent but takes up much trunk space as do the strollers for infants.
researcher
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Re: Buy a vehicle cash or finance?

Post by researcher »

jharkin wrote:I am VERY impressed you amanaged a road trip with kids in a CUV.
When my wife got pregnant with our twins I drove a hatchback and she a Corolla. I resisted buying something larger but when we tried mounting two car seats in the corolla and I saw that would put the steering wheel in my lap I gave in.

We got a 3 row and I've never regretted it. We take week long road trips often and go to destinations like national parks where we are staying in rental houses or condos and can't count on a hotel lending us kid supplies. We usually stay in rental houses and cook. With 2 kids in car seats you absolutely pack the back with the 3rd row down...

2 large suitcase for parents ( or more... my wife seems to fill up 2 by herself ;) )
2x (or more) bags for kids clothes, toys, etc
2x diaper bag
2x pack and play (to use as travel crib)
2x travel high chair
Outdoor gear, beach gear, etc
Cooler/food

(The above list for example when we took the kids 8hours north for a week in Acadia NP at age 3)
No need to be impressed that a family of 4 is able to take a trip in a CUV. It's really quite easy.

We take all of the same types of trips you describe...staying at VRBOs/cabins/ect and traveling to places like state parks and beaches where outdoor/beach gear are needed. We've taken 3 12+ hour trips, 3 9+ hour trips, and countless 4+ hour trips.

One complicating factor for you is the fact that you have twins. Your situation is quite rare are not applicable to the vast majority of parents.
Another problem is you take way too much stuff. Your wife needs 2 large suitcases to go to a national park for a week? Do you need TWO diaper bags? Do you really need high chairs and pack & plays for your 3 year olds on vacation? We stopped using these items by age 2.
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