Just as we settled on indeed using this blissful period before the arrival of baby Squidge (and attendant daycare fees) to knock out the PMI on our house, and have made good headway on the matter, life again throws us a curve that keeps the PMI plan a constant conundrum.
This time, that curve comes in the form of the Pepaw van. Mr. Steward and I had already settled on the fact that in 2-3 years, we would like to buy a minivan. We don’t need a minivan with two kids. But we want one, for several reasons. It will make travelling to our family’s homes a lot easier, as we are already running out of room in our car by the end of some trips. Flying is less of an option with two, so we see more long car trips in our future. We also don’t have a vehicle that can haul anything now. So, though the gas mileage will be atrocious, we decided this would be our someday splurge. The plan was to save up to buy a 6-7 year old Sienna or the like with around 100,000 miles, which should run us about $10,000-$12,000.
I called my Pepaw, a homegrown mechanic, to see if the personal finance community’s love of Toyotas and Hondas was well-founded. He said they do seem to last a long time. He also said that he is currently selling a 2014 Dodge Caravan that he bought new. It has 55,000 miles, new tires, is still under a Powertrain warranty, and no accidents. He’d sell it to me for $13,500.
Which is just about the amount left before we would get the PMI off our house, and the very maximum we would have “extra” in our budget over our current baby-free period. He needs to sell it soon-ish, because they bought another of the same vehicle, the next package up, due to my Memaw’s problems with arthritis and shutting the trunk latches.
Besides the general pros to a minivan I already mentioned, there are several reasons why this minivan:
- One owner (and we know him!), and nothing wrong with the vehicle except a scratch on the back and a clothes hanger that has come loose.
- Mr. Steward’s 2006 Mercury Sable, which we’d be replacing, has doors that don’t shut in the winter, the cruise control is out, and he did not always maintain the car well in the past. There is also rust on the exterior. It has a little over 100,000 miles. It’s still quite serviceable, but it’d be nice to replace it sooner than later.
- The price seems fair, according to Kelly Blue Book. Since it’s a family transaction (although I have to confirm with the BMV), we should also save about $1,000 in sales tax.
- We’d be getting a much lower mileage car than I suspect we would if we wait the 2-3 years.
- I’ve driven the vehicle, and I liked it. I also think the Caravan is the best-looking of the minivans.
- Our car philosophy is to drive it until the wheels fall off. So, theoretically, once the interior space upgrade is made, we won’t need another car for a long time.
- We would have to take out an auto loan. We could complete paying off the vehicle in six months to a year. If we edge toward the latter, things would be tighter than usual for the last few months once daycare for Squidge begins, barring unforeseen positive occurrences, like raises.
- Daycare for Squidge, plus my being out of work for a month unpaid, are still somewhat unknowns in our budget. Obviously we can project the numbers, but stuff happens. I’m wary of adding another factor that might make those times more challenging than they need to be.
- I’m somewhat against auto loans on principle. I don’t want to become like so many, poor because of bad automobile choices.
- We’d still have PMI on our house for another couple of years, at $600/year. I’m also against PMI on principle.
So tell me, is my Pepaw’s offer serendipitous or a vile temptation? Would you stick with the PMI plan, or switch gears to buy the van?