#CarSearch #NewCarOptions #CarInsurance
Option 1: A More Affordable Choice
Are you considering a more budget-friendly option to replace your totaled Lexus? Purchasing a car in the $10k range might seem appealing – you can own it faster and have lower monthly payments. However, it’s crucial to weigh the pros and cons. While it may save you money upfront, older cars may come with potential issues or repairs down the line. Make sure to thoroughly inspect any vehicle in this price range before making a decision.
Option 2: Investing in a Higher-End Vehicle
On the other hand, if you’re looking for a more reliable and newer vehicle, consider investing in a car around $20k, like the Grand Cherokee you mentioned. A newer car typically means fewer mechanical issues and higher reliability. However, keep in mind that a higher-priced car will come with larger monthly payments. If you decide to go this route, ensure that the total cost fits comfortably within your budget, including insurance, maintenance, and any unexpected expenses.
Consider Your Financial Situation
It’s great to hear that you’re financially stable with no debt and a good credit score. When making a decision, think about your monthly income of $3000 and total expenses of $900-$1000, including your previous car payment. Ensure that the new car’s monthly cost fits comfortably within your budget so that you don’t strain your finances.
Seeking Expert Opinions and Suggestions
Ultimately, the decision between a more affordable car or a higher-end vehicle depends on your priorities and financial situation. It’s essential to consider all aspects, from reliability to monthly payments, before making a choice. Remember to seek advice from car experts, friends, and family to gather different perspectives.
Conclusion
Making a decision about your next car is a significant step, especially after the unexpected loss of your Lexus. Whether you opt for a more affordable option or invest in a higher-end vehicle, prioritize reliability, affordability, and your financial stability. Take your time to research and explore different options before committing to a new car. Good luck with your car search, and I hope you find the perfect vehicle for your needs. 🚗💭
Why would you be choosing a 72 month loan @300 when you have $2000/month after necessities?
Never owned a hustler car that didn’t blow up on me or have constant recalls. I wouldn’t put Jeep and reliability in the same sentence myself.
Get a Honda or Toyota sedan for 10k or less. Stay away from a Jeep. You’re sadly mistaken if you think it’s going to be reliable, especially for the next *6 years* you’d be paying on it.
You don’t need AWD in Michigan. I did it for years with normal sedans with all season tires.
You make nowhere near enough to buy a $20k car. You pull in $36k a year. You need a budget friendly car that does the trick. Please do not take out a 6 year loan on a car. The fact that you stilled owed 17k on a 3 year old Lexus at 23 is scary as well.
I personally think you are spending way too much on a car.
Just buy a cheaper used car. $300/mo for a car payment? What’s your insurance going to be on a newer Grand Cherokee?
You are making 3k a month with 1k expenses, on paper saving 2k a month. Just buy a cheaper used car outright.
>my car (that I owed 17k on)
>2nd option I have looked in to is going up to 20k
You want to take a loan out, in greater value of the loan for your original car, that you currently owe 17k on *after three years* of $370/mo!?!?!?
My guy or girl, you need to change your mindset on money and what’s actually needed. You are spending way too much money and will keep spending way too much money with your current mindset.
If you don’t go with your first option, you are a silly person.
Are you getting nothing from insurance?
Go with the 10k car as long as you can find something reliable. As long as it gets you where you need to go safely, reliably, and comfortably, that’s all you need in a car. Frills are just extras, and the interest rates right now are not your friend. You can always upgrade in a few years after your credit score is closer to 800 and “hopefully” the interest rates lower.
Jeep doesn’t equal reliability. I would look for a different vehicle.
Insurance totaled the vehicle but are they paying you enough to completely pay off the loan?
E-bike. For your health, your wallet, and planet Earth. If it doesn’t work out you can always buy car later. If you can make it work you’ll be much better off.
>2nd option I have looked in to is going up to 20k & specifically a newer Grand Cherokee. Could go 72 months if I wanted which would be around $300 a month. Going to be more reliable and should have less issues but little more expensive a month.
You won’t be getting that close to 300. Add interest and dealer BS. And jeeps are incredibly unreliable. You will have MORE issues than if you get a Japanese sedan for half it’s price.
Jeep is not known for its reliability. nSpending either 10k or 20k is more or less OK, but don’t buy Jeep if you want it to last. Toyota, Honda, even Mazda or Subaru. I’d stay away from Jeep, VW.
Save up for a few months and buy a used reliable Toyota Corolla or Honda civic cash for $5-6k or less. Put liability insurance only on it. Then save up to upgrade to a $20k car cash later. Do you know what will happen when you’ve finally saved that $20k? You’ll realize it isn’t worth spending it on a car and you’ll keep that beater until the wheels fall off. And then you’ll do it all over again. You will teach yourself one of the most valuable lessons most Americans never learn – never finance a depreciating asset.
**TL;DR:** Just because a car gets totaled (for any reason), it doesn’t mean you’re free and clear of the loan, even if you have GAP. Insurance is going to assess the value of your vehicle prior to the tree falling on it and give you a settlement amount. You may still owe the bank money to close out the loan.
If that insurance settlement covers your loan payoff, then you are indeed free and clear to go look for a new car. If the insurance settlement does not payoff your loan, there are a number of things you are responsible for. **You must continue to pay your auto loan on time until the loan is paid in full. If you do not, your credit score will absolutely be affected.** You are responsible for filing a claim with the GAP company for their settlement. GAP can take 90-120 days to send the bank their settlement money, and they will absolutely drag their feet on it. Meanwhile, you still owe money to the bank. Some auto finance companies (or banks/credit unions), like the one I worked for, will also attempt to start the GAP claim as well. This is fine, the GAP company will combine all the information from the bank and from you into a single file and work on it. There are things the bank will not have access to- such as a police report from the accident/incident that totaled the vehicle. You will have to provide that to GAP as well as any additional information for them to settle the claim.
Just because the vehicle is totaled does not mean that GAP will payoff all remaining amounts. There are many GAP insurance providers out there, and they all have different contracts and terms within. Some of them will pay up to 125% of the value of the car (actual cash value of the auto, not amount of the loan), where some of them will pay up to 150% of the value of the car. None of the GAP insurance providers that I worked with would pay for skipped or deferred payments. You might still end up owing money to the bank, despite having insurance and GAP.
Example:
You buy a car tomorrow. Let’s say you sign a loan contract for $20K but the car’s actual cash value is $12K. You drive it home, and a tree falls on the car, totaling it. Insurance looks at the car and pays a settlement for $12K. You file with GAP and GAP says “we will pay up to 150%, insurance paid $12K, so here’s another $6K.” The bank has now received $18K of the $20K from insurance and GAP, and you still owe the other $2K to close out the loan.
All of that being said, Look for a similar car payment to what you are paying now, or less. $370 a month was working out for you? Stick with it. Maybe even go up to $400. Be aware, however, that taking a large jump in payment ($100 or more above what you are used to) tends to not go well for anyone.
I would buy a $10k car any day over a $20k Cherokee. No jeep is worth $500 if you actually value reliability. There’s plenty of cars under $5k that are reliable. I just bought a 2003 Miata with 123k miles at the beginning of the year for $4800, and it’s been my daily.
I’m looking at cars for my 16yo daughter and the budget is about 10k. I can tell you that you can probably find a 2014-2016 Toyota Camry, Corollla, or Honda Civic for $10k that will already have 150k miles on it and STILL be more reliable than the Lexus or the Jeep Cherokee. Jeep is NOT known to be reliable. You could also spend a little more or go a little older for like a Honda Accord.
That being said I don’t think that affording $300/mo would be a problem for you. Unfortunately a lot of people here don’t realize that a $300 payment today isn’t a $300 payment 4 years ago. Cars are just becoming more and more and more expensive and payments will rise, even for the “used/reliable/value” cars. Even spending 10-11k on my daughters car with $3-4k down is still going to be about $200/mo.
I’m sorry, but putting “Jeep and more reliable” in the same sentence doesn’t work, unless extremely lucky. Also, if you need to extend it to 72 months, you obviously cannot afford the damn thing. Be smarter with your money, because $3k monthly is not a lot and can quickly dwindle in this economy.
You don’t want a used car loan right now if you can help it, because the rates are high around 7% as you noted. If you must get one, you want a shorter loan term of 36mo and a 14k-18k car to mitigate the interest burden.
The best is to either buy a used car with cash or a new car with promotional 0-2% financing. For $550/mo you can buy, for example, a 2024 Mazda CX-50 paying only 0.9%-60mo this month. That’s a very good option as you’ll have a trouble-free car well into your 30s that you locked in at the lowest price it will ever be at a very low rate.
Now if you want a cheap used car like others are suggesting, well that’s quite a rabbit hole and is really not where you want to go if you are gainfully employed. Sure, I can recommend you a 2010-14 Subaru Legacy 3.6L as a good value michigan car in the 10K range and it will last you for a good while.. The market has come down since the pandemic but that is more at the above 20K level, the under 12K market is still very much slim pickings.
Chrysler product
Reliable
You can only choose one