Planning Ahead For Our Next Car Purchases

With my previous car purchases, I did very little planning ahead. My first car was discovered in a semi-functioning state in the yard of an old friend of my parents – we put in some work and got it going. My second automobile was a pickup truck – I just got the type that my uncle recommended, buying the first one of that kind that I test drove, and bought it with no down payment. While the first one was a pretty good deal, it was mostly a matter of someone getting rid of a junk car and helping out the son of an old friend. With the pickup, however, it was a pretty expensive deal – not planning ahead cost me quite a bit of money.

My wife came into our marriage in much the same situation – her first car was from a family friend and her second one was actually purchased from her father’s business, and she’s still driving it.

Our next purchase, however, won’t be nearly so cavalier. Here’s why:

First, saving ahead means less debt when we actually do make the purchase. As soon as I really put together the full picture of how much an auto loan costs – and as soon as my current vehicle was paid off – I started saving for our next vehicle purchase.

Second, researching the purchases carefully means we wind up with a more reliable vehicle that really matches our needs. No more asking my uncle what he likes then running to the dealership. Instead, I intend to get a lot of information on my autombile purchases.

Third, our actual needs are much more clear than they were when we made those purchases. Our current vehicles were purchased when we weren’t even married and our needs were completely different. Now, we’re a family of four living in a rural area, which really specifies what kind of purchases we’ll be making.

Here are our two planned vehicle purchases in the coming five years.

Minivan

When? 2008-2009
Why? We have a family of four right now and we’re talking of making it at least a family of five. Soon, a minivan will be our only good option for transporting the crowd along with the requisite items needed.
What models? We’re looking at a late model used Toyota Sienna, based on Consumer Reports and Car and Driver. We’re a big fan of the all-wheel drive option and it scores well on safety. However, we will probably look at new since both models depreciate much more slowly than the average automobile.
What vehicle will it replace? My wife’s sedan is starting to have some issues, so it will be the one replaced. We’d like it to last until summer 2009, but summer 2008 is an ominous possibility.
What’s the plan? We’re currently making a “car payment” to a savings account equivalent to what our combined car payments were before we paid off our vehicles. This money will be used to pay for a good portion of this vehicle, along with whatever value my wife’s trade-in has.

Truck

When? 2010-2011
Why? A four wheel drive pickup is incredibly useful in Midwestern winters, plus the pickup enables us to transport things quite easily. I’ve used my current Ford pickup for quite a lot of hauling over the last few years and it hasn’t slowed down, either.
Other possibilities? We have discussed getting a smaller car for me instead if I continue to commute. Another possibility is not getting a car at all if I wind up writing at home.
What models? The model year that I’ll likely purchase hasn’t come out yet, but I’m keeping a soft eye on them.
What vehicle will it replace? My current pickup.
What’s the plan? The day the van is purchased, that car savings account becomes savings for my truck.

So, what’s the message here? Three take-home tips:

If you’re free of car payments, start saving for your next one now. The interest will work in your favor instead of against you.

Know what your needs are. The biggest ones are the number of passengers you’ll regularly have (or expect to have in a few years), where you’ll be driving it and how much, and the aesthetics you demand.

Get multiple opinions. When you start to get close to the purchase, hit the library for an hour or two and research your choice. Look for the Consumer Reports car buying guide for starters, then move onto other sources (Car and Driver, for example).

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