Financing a car: is this dumb and is there another option?
I am delurking to ask for your thoughts.
Background: In September of 2003, our car (Chevy Celebrity, 1994) that we had for 3 years and had absolutely no problems with mechanically or aesthetically, even though it had over 110k miles on it, and was completely paid for was in an accident - not our fault - and totalled. Out situation was that I wasn't working, DH was loosing his job due to company filing bankruptcy and going out of business. He had no leads on a new job yet, although it was obvious that he will find another job shortly. We needed another car immediately so did not have time to look for a good used car. We ended up leasing a new Altima, since it was cheaper then buying and financing. Anyhow, that lease will be over in fall of 2007, thank goodness.
My personal feeling on this whole thing, is even though I like our Altima as far as cars go, I cannot stand that fact that we have to pay for it monthly ($230) and have nothing at the end of 3 years, and our insurance is insane because of it ($320 per month) -- this is New York.. Lesson learned: never ever lease a car again. I also doubt I will have a new car again or at least in foreseeable future. DH's feeling are not as strong on this subject, but overall we in agreement.
Now onto my problem. When this lease is up, we will need another car. It will defiantly be used. We think we might want to get a minivan at that point (two little DDs), but not sure yet. By talking to people we can trust, we expect to need about 8-10K, but hopefully less. We do not have that much cash unless we dip into out house downpayment funds which we cannot do. So the only way I see of getting that 'new' used car is by financing it. We have come up with two options: either get a car loan, or pay for it through student loans. The was I see it, student loans will have lover interest rate then car loans, and will be consolidated when DH graduates. We can always pay more on the consolidated student loan payment if we can. Payments will be way lower then out current car payment and insurance will go down as well. So we can still keep the same payment amount and pay off loan sooner. What does everyone think about this? Is there a better way to do it? FYI: DH will have to take that loan this summer as this is going to be his last year in school and he will graduate May 2007. His loans will be in deferment until about November 2007, when we will consolidate them and have to start paying them off. This will be about the time we will need to turn in our lease and get another car.
Thanks in advance for your thoughts.