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New Car or Ride current one into ground?

Bing: 5% of 14k is $700.

If you can get 5% !!! If you find a way, let me know.

“If you can get 5% !!! If you find a way, let me know.”

Okay, here’s how:
Buy shares of companies that pay high dividends, such as HCP, which currently pays a 5.9% dividend, or, my favorite–Realty Income Corp–which pays a 4.4% dividend each month!

4.4%/month? not according to what I can find on their web site.

“4.4%/month? not according to what I can find on their web site.”

The relative value of the dividend relates to the purchase price of the shares, and for me it amounts to 4.4%. For somebody who bought at a higher share price than I did, the dividend would be less.

However, I am enjoying that 4.4% monthly dividend–as well as a decent appreciation in the share price since I purchased the shares about 1 1/2 years ago. But, even if somebody buys their shares at a higher price today, the company’s 10 year 5.1% divided growth rate bodes well for the future.

And, for those who think that this is “off-topic”, since Realty Income Corp owns commercial buildings that they lease–at a substantial profit to retail businesses–many of the Advance Auto and Auto Zone locations that you visit (as well as Rite Aid, CVS, Walgreens, etc) are actually owned by Realty Income Corp, and those auto parts companies are merely tenants, paying big rents to Realty Income Corp!

For Realty Income Corp, it’s currently 4% per year, paid monthly.

"Bing: 5% of 14k is $700.

If you can get 5% !!! If you find a way, let me know."

Yeah, where’d I get that? I dunno.

Well the average on reasonable mutual funds are more like 7%. Some years 20% and some -10% but if you rely on CDs at the bank or money market, yeah then you are in the 1/2 to 1% range. No pain/risk, no gain.

“For Realty Income Corp, it’s currently 4% per year, paid monthly.”

That is the case, based on the current share price, and that isn’t exactly…shabby.
However, for those of us who bought our shares at a lower price, the percentage “payoff” is more substantial.

If your primary consideration is financial then stick with the Saturn. No amount of repairs are going to exceed the $14k you’d be paying for the new car. Insurance on the existing vehicle will be cheaper. And even at 200k miles I bet it gets just as good mileage as the new car.

If comfort, convienence, and gadgets that work (for awhile anyway) are your top priorities then by all means get the new car. It sounds like a good deal.

Life is short, buy a new car and end torturing yourself and the Saturn.

As mentioned, there are better choices than the Focus, the dual clutch transmission could be clunky at low speed. Look on focusfanatics forum.

We’ve gone through the same process with our '98 Ranger, and here are some thoughts.

In Favor of Keeping The Old One:
a.It’s a known quantity. You are familiar with the way it runs and feels.
b.You may pay practically nothing for registration, and probably less for insurance than with a new car. The biggest ownership expense – depreciation – is in the older car’s favor.
c. You don’t need to worry about it. If someone runs into it, you can walk away with little angst. If someone steals it … hey, wait a minute – no one is going to steal a 14 year-old Saturn. Having a car you don’t worry about is a big plus!

In Favor of Getting a New One:
a. Nearly any new car is vastly safer than your car, both in avoiding accidents and in protecting you if you have one (look at the Insurance Institute for Highway Safety website, for your '90 Saturn and for a new Focus).
b. You’ll feel much better in a more comfortable and quiet car that can accommodate your height. BTW did your priest make you drive a car that lacks headroom as penance for a major sin?
c. You may think your old Saturn will last forever, but there will come a day when it will leave you stranded, facing a huge repair bill, or screaming in panic when something dangerous fails. That’s a bad place to be in. We don’t own anything in life , and you’ve borrowed this car long enough, it seems to me.

If you are attached to your car, keep it and drive it on bad winter days or donate it. My guess is you’ll never drive it after buying a new one. BTW despite what other posters have said, the Focus is not a bad car, and that seems like a good price as long as it fits your size.

As a owner of a older car, I can easily understand your dilemma. A new car would be more worry free, but I think the questions that you should think about are, do you still enjoy your old car? Do you mind putting money into it a few times a year? Are you comfortable with a new car payment monthly? How much do you average in car repair bills over the last couple years? Are you getting the itch to drive something different?. I think these are all good questions. in my case I still enjoy my 1997 thunderbird, so for the time being I am okay putting money into it. I understand that I go through bad periods where I put more money into it than on other months. I think for me, it will come down to either a few very expensive repairs back to back or something major happening for me to give the car up. I think this is a hard decision for someone to make and I wish you luck with whichever way you decide to go.

@snowlip7

Attention, Please!
Am I missing something?

It’s been several days and several pages of comments. We are missing too much information and snowlip7 has not responded. Is snowlip7 still out here… coming back?

This is voice of maturity in the back of one’s head:
I’m not sure why he/she has figured on possibly financing $14,000 of a relatively cheap car.
The only way I’d ever recommend doing that is if he/she had banked nearly that amount and could earn some interest on the money, since financing is $zero.

If he/she has not saved anything then he/she should start saving at a goodly rate and banking some money before considering a purchase. If one can’t save, how are they going to make payments? And what if something bad happens to the income stream during the loan period? Getting behind the 8-Ball or putting oneself in that possible situation is never a good idea.

Also, we don’t know what insurance coverage is on the Saturn. Does it include collision? I can almost assure anybody that insurance on a financed new car is going to be much more expensive than on the old car. Has this been factored? I’d definitely be on the phone to my insurance agent to find out prior to considering a new ride.

To me, it could just be that he/she simply cannot afford a new car. Who knows without additional info?

I’m afraid we are all beating a dead horse here unless snowslip7 shows up, again!
CSA

If he/she has not saved anything then he/she should start saving at a goodly rate and banking some money before considering a purchase. If one can't save, how are they going to make payments?

That’s the way the vast majority of people buy cars. I surely don’t…but way too many do.

“That’s the way the vast majority of people buy cars. I surely don’t…but way too many do.”

Yup!
As far as most people are concerned, the only important question is, “How much will my monthly payment be?”.

How they will actually make that payment is another issue entirely…

The amount of people who can pay cash for a car is really low. If someone can make the payments without having to post phone groceries or utility bills so what. It is not as if the OP (who has most likely left the building) was asking about a high priced luxury vehicle.

So, how much does it cost to have the head liner fixed? Ditto for windows? No one commented on that. I doubt that is a high priced endeavor. I am not disagreeing with the other folks, just pointing out his two big complaints aren’t horribly expensive.

My son bought a 2002 Protege from Hertz in Chicago. He told me recently it has passed 300,000 miles. Transmission and motor solid.

insightful: Exactly. I could have paid cash for my 2002 Mitsubishi Eclipse but at 0 down and 0% interest for 60 months why would I?

VDCdriver: "As far as most people are concerned, the only important question is, “How much will my monthly payment be?”. They would finance a car for 10 years if the monthly payment was right! These are the people who pay 10% or more interest for a 2 or 3 week payday loan or over $2,000 for a rent to own TV they could buy for $800 cash! I almost feel sorry for them (not really). Also the ones who take “advantage” of the $99 to $129 very attractive automobile leases with$4,000 due at signing who pay remainder of the retail monthly payment in advance. That reminds me of the auto insurance companies “vanishing deductible” scam. Pay $12 extra per month for 5 years and your $500 deductible disappears. No. You have paid your $500 deductible that statistically you will never have to worry about in advance! I feel so fortunate that simple mathematics was still taught in my schools.

Working on the Dave Ramsey premis of “never finance a car” can I surmise that I should find whatever job is near enough to walk to and save until I can pay cash. If Dave were to ask me I’d tell him he’s full of it.

Having operated a garage for many years, seeing and hearing the situations that many people faced, it became quite obvious that there are a great many good people who find themselves in desperate situations for various reasons and transportation is among the top most difficult problems to face for many. And speaking of Day Ramsey, how many Ford Granadas does he think are waiting on desperate people who somehow find themselves with a hand full of hundreds. Where did they get the hundreds BTW?

But speaking specifically to the OP’s dilemma, in this less than perfect world where an unexpected breakdown could occur on the way to work and result in a wrecker bill of $hundreds and the need to decide where to take the car for repairs while sitting on the shoulder and wondering how to get to work ‘right now’ and how much the repair will cost and how to get to work for days or even weeks until the repair is completed and paid for can result in a great many set backs. I have been quite fortunate the past 30+ years, being able to afford to pay cash for above adequate transportation and always having a spare or 2 and possibly a vehicle being flipped to drive so if something I drove broke down I could call either of 2 wrecker services on my phone’s friend list and likely not be inconvenienced terribly. If I assume that the OP lives and works in a much more urban and hectic situation than myself and is neither familiar with repairing his own vehicle or even on a first name basis with wrecker owners and repair shop owners and doesn’t own a reliable backup vehicle he might be wise to let the old Saturn slip into history and look closely at his best options to replace it. Certainly a bargain might be found at a dealership where the off lease 3 year old models with financing similar to the new models is possible but honestly, if a good(?) new car that suits him can be comfortably financed it does seem to be a good option… But, as always, opinions vary.

Every time I want to see how the 0% would work for me, I realize that I can also take the cash back option. That is like a stock market return that is guaranteed. Also, they want to charge a $500 financing fee, always hidden somewhere in the fine print.

The other problem I have is most of the time I buy 2-3 yr old cars and financing those is even more complicated. So all cash it is for me.