Old Van Or New Car

from Jonni McCoy

Q. I have an older van that really needs to have major repairs, such as brakes and possibly a new/rebuilt  engine.  We put a new transmission in it before Christmas while I was still working.  I am at home now and use the van primarily for carting the kids to the store and to the pool, etc. My husband has the "I want a "new" car urge and keeps talking about using my van for a trade-in.  We figure that we could "afford" payments of $200.00 a month but that would be all of our discretionary budget. How do we decide which is the best use of our money?  Fix the old or invest in a newer vehicle? MichelleRaytown,  MO

There are several questions to consider.

I doubt that you can get a brand new car for your trade in plus $200 payments, so you will probably get another used one. Is that going to be any better than the one you have?

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Do you want to have NO discretionary money? Can you or your husband really live without any "extras" for a few years?

Can you and your kids live "bone dry" financially just so you can have a newer car?

The $200 per month comes to $2400 per year. Do you think you would spend more than that on repairs?

These are just a few of the questions that you should ask yourselves before making that decision. I am sure that you have others issues to consider in addition to these.

Jonni McCoy is the author of "Miserly Moms – Living On One Income In A Two Income Economy" and "Frugal Families – Making The Most Of Your Hard Earned Money!"