In need of a pick me up pill (or a strong cocktail)

iVillage Member
Registered: 11-24-1997
In need of a pick me up pill (or a strong cocktail)
5
Sat, 04-27-2013 - 7:09pm

It's been a month since I lost my job.  Now comes financial issues.  Went to get my car inspected.  It passed, BUT I need to replace the front end pipe ($1,275.) + cabin filter ($79.99) + tax (8.75%).  I can get it repaired at a nearby dealership & save a bit on the tax (7.67 vs. 8.75%).  My car (Toyota Camry) is 9 yrs. old with 69,300 miles on it.  I visited the Toyota dealership today to see what kind of deal I could get.  They offered $5,000. for the trade in & I would trade it in for a 2009 Corolla with 24,000 miles.  On top of this, my dishwasher is not working.  So I'll be calling KitchenAid on Monday to get it fixed.  The dishwasher is 11 months old (since we bought it just after we moved in).

Next?  Wishing I could join my kids on their vacation to Australia.  They are leaving May 6th. 

Strategies anyone?  As for my car, my husband is saying to put the repair on the credit card & he will pay it off.  I was tempted to take the deal above, but I'm also contemplating if I get the car fixed, & wait until December when I turn 59 1/2, then I can take money out of my retirement without penalties & buy a used Prius or another hybrid car.  The Corollas are good, but given that we're almost in retirement, I'd rather invest in a hybrid so we can save on gas.  Right now with the layoff & severance package, my 401K is frozen.  Staples is releasing my 401K next month, then I can do a IRA rollover.  However, I still can't touch it, because I'm not 59 1/2 yet & I refuse to pay penalties 7 months before I'm eligible.  Also, as for taxes, the way I see it, even if I do pull out $15,000. for a used car, our annual income will still be low because I'm not working (yet).

So please give me your thoughts on this.  I can't drive much longer with a cracked front pipe & dirty cabin filter.

Kathy

iVillage Member
Registered: 04-16-2009
Sun, 04-28-2013 - 12:35pm

$5000 for a 9 year old car is a good deal. It has only 111528km (I have to change the milleage to kilometers to make sense to me). You haven't driven it that much.

The question you have to ask yourself is that latest repair the start of more to come or will, after you fix the car, you can milk a few more years out of it. Do some research on your make of car and its problems (blown head gaskets known to happen after a certain milleage, brake problems....).

As it is now, the cost of repair is still less than the book value of the car, it is still probably worth the cost to repair it. 

Since you are not working and retirement is coming soon, how much driving will you be doing? Any savings from driving a hybrid could be small compared to the cost of getting a "newish" car. In other words, how many miles would you have to drive to make up for the added cost of replacing your car,including lost interest from the money used to buy the car, Increase insurrance and Repair costs on the hybrids?

Other considerations.. who else drives the car? When your DH retires, will you go down to one car? How is his car?

Good luck

Avatar for elc11
Community Leader
Registered: 06-16-1998
Sun, 04-28-2013 - 12:47pm

The dishwasher should still be under warranty, correct? We also bought a KA and as I recall the manufacturer gives a 1 year warranty. So hopefully that won't cost you anything.

Personally I wouldn't touch the retirement fund even at 59-1/2, unless you have a nice nest egg in some other fund. With the way they're talking about Social Security running out of money and raising the co-pays on Medicare it looks like retirees are going to need more money to stay afloat than previously anticipated.

I would vote for repairing the existing car IF the mechanic says it looks otherwise sound. 70000 miles on a Camry isn't that much, unless it was a hard 70K---you know how you drive, how well you maintained your car etc. With a used car you don't know the history. The dealer probably offers a limited warranty but still...As for a used hybrid, are there many available and how affordable? I too would like to get a hybrid or an electric vehicle, I'm holding off as long as possible in hopes that a lot more charging stations get installed here and throughout the state.

Anyway, when you start working again you can start saving for that hybrid.

As for Australia, that would be lovely but are you seriously considering it? I can't even imagine how expensive the airfare would be this close to the travel date.

Don't you hate it when you have these kinds of decisions to make?!

Avatar for suzyk2118
iVillage Member
Registered: 07-30-1997
Sun, 04-28-2013 - 2:18pm

Start here: http://www.edmunds.com/appraisal/ and look at both cars with the details you have on them and go from there.  A Corolla isn't as expensive a vehicle as a Camry and likely isn't built quite the same because of that.  It's always better to sell privately than trade in if you can afford that as well.  The mileage on your car is fine; dh considers looking into switching once we get near/above 100k miles but before that isn't concerned, and Japanese cars do fine well beyond that.  Hybrid batteries are still horrendously expensive to replace but I've also heard good things about how long they're lasting.  All things to evaluate.  Good luck! (based on the results from Edmunds, as I don't know the details of the cars in question, I'd be tempted to fix and hold)

Sue

iVillage Member
Registered: 11-24-1997
Sun, 04-28-2013 - 2:32pm

Decision made (it was tough)  I'm getting my car repaired & I'll wiat until Dec. to take money out of my retirement fund to buy a 2012 or 2013 hybrid.  By then they should be on discount since all the dealerships will have their 2014 models on display.  This way I can justify getting a "new" car without paying full price for it.  I appreciate your thoughtful replies.  As for your questions - my retirement account only has $25,000.  I don't need it for retirement.  My husband, David, will be collecting a teacher's pension.  Yes, it's the same pension that all 50 states are protesting about.  I understand both sides of the controversy.  The Governors & their states are mandated by signed contracts to fund these pensions with taxpayer's money (revenue collected from property, school, sales & other taxes) & the Governors want to use the money for other projects but their hands are tied because of these signed contracts.  And of course heaven forbid they raise taxes because they are running for reelection & they will be kicked out of office if they raise taxes.  On the other hand, the teachers, police, firemen & other civil & Federal workers claim that when those contracts were being negotiated, they should have had better financial advisors/accountants to warn the Governors incase of a recession, the states will run out of money.  They also claim that their respective jobs is helping the public & because of their lower salaries, they needed the extra benefit of a lifetime pension.  So, as I said, my $25,000. is a drop in the bucket.  As for charging stations, here in the NYC area, I haven't seen many of them.  I would like an all electric car too, but no plans to get one until I see charging stations.  So the hybrid cars are my best option.  As for how I accumulated 70,000 miles on a 9 yr. old car - most of the driving was commuting to work (7 miles) & local stores.  Didn't take many long distance trips. 

Well, that's it for now.

Kathy

iVillage Member
Registered: 04-16-2009

P.S. Hybrids are good for in-city, stop and go travel. Here, the city found that using hybrids for the Express Buses did not save money on fuel since the buses stopped infrequently and travelled on the special express lanes on the highway. They were better for the non-express buses which stopped frequently at red lights, stop signs and bus stops.

So, fuel savings depend on the type of driving.

Good Luck