My wife wants a new car

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My wife wants a new car

Jordan SutherlandBusiness Member
Realtor · Lubbock, TX · Member since 2016 · 86 posts · 119 votes

Hey guys, I would love to hear some opinions on my personal finances. I'm a 23 year old fireman in Texas. I make a decent salary and my wife is able to stay home with our two kids. We are able to live confortably because we have no debt ( besides our home and our two rental properties), but we still have to stick to a budget to make ends meet. We just got into real estate investing last year and I would like to keep the ball rolling.  We have about $40k in the bank and in moderately aggressive mutual funds not in retirement accounts. We are expecting our third child in June and my wife says she needs a new car to accommodate our whole family. She currently drives a 2008 impala that could hold our whole family, but would be very inconvenient with 2 babies and a 6 year old in the small back seat. My car is even smaller than hers. My wife wants a used SUV in the $15,000-$20,000 price range.I told her that she should keep her current car, because it will help with our long term financial goals, but she is adamant in getting something newer and bigger. I feel like we are doing very well for our age, but I feel like if we spend too much money on cars and other liabilities it will severely compromise our financial future. The money we would spend on a car could be used as a down payment on  another rental property in my local market.  Even a small car payment of $300/month will not fit in our budget at all, as  our income is nothing to brag about. What do you guys think we should do? Make my wife happy and get the car or try to remain frugal in our personal finances and continue growing our investment portfolio? Thanks for any input!!

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Natalie KolodijBusiness Member
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Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
9y

Just from the standpoint of someone's whose first career was mechanic- I'm shocked that impala has made it 10 years and likely will start giving you some spendy issues soon. So ...keep that in mind as well. 

You can look into a used Honda cr-v that may hit closer to the $10k mark and be a little bigger, not break the bank, and be reliable. 

You've got to figure out a way to balance both frugal and happy wife. A new car is definitely cheaper than a new wife.

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  • Ian WalshBusiness Member
    Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    9y

    Drive a car until it can't run.  That is my opinion and what I have done on my last 3 cars.  I literally drove them until their last moment.  It is hard to justify the money on a car as it only loses value.  

    1Reply
  • Account Closed
    Johnson City, TN · Member since 2014 · 586 posts · 705 votes
    9y

    This is one of those times in which you must ask yourself why you are investing and what is the purpose of money? Money won't do you any good when you are in a nursing home. The welfare of my family right NOW is worth far more than potential payoffs years down the road. Your wife sounds like a reasonable lady. Too many would be insisting on a NEW 60+ vehicle!  If you don't replace this car now, when will you?  Being a parent is stressful, especially for a mother that is caring for small children all day. Find a way to provide this reasonably request for your family.

    1Reply
  • Account Closed
    Vendor · Brandon, FL · Member since 2016 · 71 posts · 20 votes
    9y

    What a great thread!  My vote is personal:  momma needs a comfortable, reliable and safe vehicle. Don't break the bank - shop wisely - 'cause if momma ain't happy, ain't nobody happy.  The return on your investment:  A happy home....so worth it.  

    2Reply
  • Linda S.
    Investor · Richmond, VA · Member since 2016 · 1k+ posts · 2k+ votes
    9y

    @Jordan Sutherland,

    How in the world is this even debatable?! Happy wife-- happy life!  Think of general quality of life, removing 2 kids while being pregnant from a tiny car, and then having 3 kids from a tiny car-- sounds miserable!     She is a stay at home mom, so she likely travels and takes them places all the time,  personally I'm dreading it already for her if she doesn't get the SUV!  Having 3 young kids, it's better and safer in a SUV IMO.   

    Her request sounds completely valid, I'd suggest just looking at ones under from 10-15K, go for value and longevity.     Think safety, stability, and also quality of life for her.

    4Reply
  • Patrick S.
    Investor · Indianapolis, IN · Member since 2017 · 21 posts · 7 votes
    9y

    Check out your local credit unions and if they don't offer a low enough rate, check out an online credit union called DCU (dcu.org). They're offering rates as low as 1.99%. When I got a loan from them about a year ago, that rate was 1.74%. The kicker to get that rate is that you must direct deposit $1k or $2k into your savings account with their bank. If you don't do that, it adds 0.25% to your ARV. The biggest perk to this place? They offer a 125% LTV loan on the vehicle. I happily took that extra 25% at only 1.74% interest and used it towards the title and registration. You can pay cash or you can finance at a rate that's below inflation and use that cash towards a new property that'll easily cover the loan payments.

    0Reply
  • Mike ReynoldsPro Member
    construction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes
    9y
    Originally posted by @James Masotti:
    Originally posted by @Frank Trigoso:

    Explain to her the difference between good and bad debt. This comes back to sales. You need to sell her the idea that you will purchase a larger car with the cash flow of the next property. That is what I will do.

     I'm pretty sure I am the only person on the planet that could never sell my wife anything. :)

     Well you did at least once sell her on the idea of you. Pretty funny stuff though.

    0Reply
  • Chinmay J.
    Investor · Northern, VA · Member since 2016 · 1k+ posts · 904 votes
    9y
    Originally posted by @Jordan Sutherland:

    Hey guys, I would love to hear some opinions on my personal finances. I'm a 23 year old fireman in Texas. I make a decent salary and my wife is able to stay home with our two kids. We are able to live confortably because we have no debt ( besides our home and our two rental properties), but we still have to stick to a budget to make ends meet. We just got into real estate investing last year and I would like to keep the ball rolling.  We have about $40k in the bank and in moderately aggressive mutual funds not in retirement accounts. We are expecting our third child in June and my wife says she needs a new car to accommodate our whole family. She currently drives a 2008 impala that could hold our whole family, but would be very inconvenient with 2 babies and a 6 year old in the small back seat. My car is even smaller than hers. My wife wants a used SUV in the $15,000-$20,000 price range.I told her that she should keep her current car, because it will help with our long term financial goals, but she is adamant in getting something newer and bigger. I feel like we are doing very well for our age, but I feel like if we spend too much money on cars and other liabilities it will severely compromise our financial future. The money we would spend on a car could be used as a down payment on  another rental property in my local market.  Even a small car payment of $300/month will not fit in our budget at all, as  our income is nothing to brag about. What do you guys think we should do? Make my wife happy and get the car or try to remain frugal in our personal finances and continue growing our investment portfolio? Thanks for any input!!

     Can a small job over the weekend for your wife while you watch little ones not do the trick? Making additional $300-$400 shouldn't be a big deal. If y'all need an SUV  for 3 little ones...y'all need it.  Just find a way to make it happen

    0Reply
  • Kathryn Pierce
    Naperville, IL · Member since 2016 · 11 posts · 8 votes
    9y

    I agree with the used minivan. Not the most stylish choice, but extremely convenient and practical.

    Has your wife ever considered taking in an extra child a couple days a week for in-home daycare? Or using care.com to find a family that needs some help picking up a preschooler mid-day? (I work full time outside the home, and I know how much I value the experienced mommas who watch my kiddos during the day. I realize 3 kids is already a handful, especially during the newborn phase, but some mommas excel at this.)

    She can work as much or as little as she wants, and still make more than enough to cover a monthly car payment. Who knows maybe if she runs it as a biz there might be some tax benefits for the minivan being a biz expense?

    Otherwise, pick up another rental to pay the car payment.

    1Reply
  • Daniel Hanson
    Investor · Waukesha, WI · Member since 2011 · 199 posts · 97 votes
    9y

    @Jordan Sutherland

    There is lot of good advice above about marriage and cars.  Since that is covered I'll give some personal finance advice.  

    We used to always have this debate in our household about how to allocate the money that was sitting in 1 single pot at the bank.  We solved it by setting up a free account at ING for savings ( it's now Capital One 360) and then creating about 8 sub accounts on the ING account.  ( emergency fund, car buy and repair, property taxes, RE down payments, vacation, etc.). A portion of our paycheck goes directly to our spending checking account for things like mortgage, bills, groceries etc, but the rest gets deposited to the ING account, and then automatically transferred to the various sub-accounts.  Since you've already saved up $40k on one income, I'm sure you can figure this out.  For us the most valuable part was sitting down and making the decision on how to split up the pot of money, because every decision to put $1 into a sub-account took that dollar away from a different account.

    2Reply
  • Aaron KaplanPro Member
    Camas, WA · Member since 2017 · 52 posts · 8 votes
    9y
    Happy wife= happy life...'nuff said. Bite the bullet... get a crv or RAV4 and move on.. impala lasting already a decade is a miracle anyway....
    1Reply
  • James MasottiPro Member
    Rental Property Investor · Washington Township, NJ · Member since 2015 · 1k+ posts · 976 votes
    9y
    Originally posted by @Daniel Hanson:

    @Jordan Sutherland

    There is lot of good advice above about marriage and cars.  Since that is covered I'll give some personal finance advice.  

    We used to always have this debate in our household about how to allocate the money that was sitting in 1 single pot at the bank.  We solved it by setting up a free account at ING for savings ( it's now Capital One 360) and then creating about 8 sub accounts on the ING account.  ( emergency fund, car buy and repair, property taxes, RE down payments, vacation, etc.). A portion of our paycheck goes directly to our spending checking account for things like mortgage, bills, groceries etc, but the rest gets deposited to the ING account, and then automatically transferred to the various sub-accounts.  Since you've already saved up $40k on one income, I'm sure you can figure this out.  For us the most valuable part was sitting down and making the decision on how to split up the pot of money, because every decision to put $1 into a sub-account took that dollar away from a different account.

     A great exercise indeed. I downloaded 7 months of bank/credit card transactions to confirm if how we are living actually matches the budget we have set. We did pretty good, but having that automatic ING account would definitely make it much easier to evaluate how we were doing on our budgeting in more real time.

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  • David Cline
    Sandy, UT · Member since 2016 · 13 posts · 5 votes
    9y

    I love that you asked this. I literally was in the exact same situation this week. Had about 40k saved, looking for the next property while the wife is about to give birth and wanted a vehicle upgrade. I ended up calling a bunch of dealerships until I found one that offered a good amount for a trade in. Found the crossover we wanted and talked them down to 18k. Put 7k down with about 4k from the trade in. So our loan is for approximately 10k over 6 years. Negotiated for a low interest rate so our payment is 185 a month. The wife is happy, and we still have about 35k after it's all said and done so I'm happy.

    3Reply
  • Deanna McCormick
    Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes
    9y

    I VOTE VAN not a SUV,, family of 5 is a scramble over seats in a SUV..

    I'm a grandma bought a Sienna van just for the grand kids.. and what a blessing..fits the car seats and everyone loves it..

    If she's happy everyone is happy.. 

    2Reply
  • Daniel Hanson
    Investor · Waukesha, WI · Member since 2011 · 199 posts · 97 votes
    9y
    Originally posted by @James Masotti:
    Originally posted by @Daniel Hanson:

    @Jordan Sutherland

    There is lot of good advice above about marriage and cars.  Since that is covered I'll give some personal finance advice.  

    We used to always have this debate in our household about how to allocate the money that was sitting in 1 single pot at the bank.  We solved it by setting up a free account at ING for savings ( it's now Capital One 360) and then creating about 8 sub accounts on the ING account.  ( emergency fund, car buy and repair, property taxes, RE down payments, vacation, etc.). A portion of our paycheck goes directly to our spending checking account for things like mortgage, bills, groceries etc, but the rest gets deposited to the ING account, and then automatically transferred to the various sub-accounts.  Since you've already saved up $40k on one income, I'm sure you can figure this out.  For us the most valuable part was sitting down and making the decision on how to split up the pot of money, because every decision to put $1 into a sub-account took that dollar away from a different account.

     A great exercise indeed. I downloaded 7 months of bank/credit card transactions to confirm if how we are living actually matches the budget we have set. We did pretty good, but having that automatic ING account would definitely make it much easier to evaluate how we were doing on our budgeting in more real time.

     Yeah, it's always gut check time when you want to spend "x" but that account only has "y" dollars

    0Reply
  • Thomas Hickey
    Real Estate Investor · Peabody, MA · Member since 2013 · 304 posts · 91 votes
    9y
    Sell the impala and buy an early 2000s Jeep Grand Cherokee with the 4.0 straight six it's a 300k mile motor.
    1Reply
  • Thomas Hickey
    Real Estate Investor · Peabody, MA · Member since 2013 · 304 posts · 91 votes
    9y
    Best car for a real estate investor is a used crew cab 8 foot bed diesel truck. Nothing it can't do pertaining to property, moving people and gets decent mpg for what it is.
    0Reply
  • Account Closed
    Investor · Rochester, NY · Member since 2017 · 2 posts · 1 vote
    9y

    LEASE A VEHICLE

    There are plenty of ZERO DOWN lease deals to be had and as investors we love zero down. The benefits of leasing are that you make half the payment vs buying, you'll always be covered under warranty and your wife will always have a safe vehicle to transport your family. I've had my wife in a lease vehicle for 12 years and every 3 years she gets a new vehicle to drive. When you do the numbers on the lease payments you'll see that what it costs to lease a brand new vehicle for 10 years is what it would've cost you to buy a vehicle in 5 years and at the end of the 5 years what are you left with, an older used car that really isn't worth much that isn't covered under warranty. Forget the old "don't go over the miles" routine because the dealer will wash those miles when you go to get another lease vehicle and if they don't want to then tell them you're looking at their competition and they will cave. I lease 2 vehicles and got my parents into leasing and they couldn't be happier because they never have to worry about their vehicle breaking down. If it breaks down then the dealer fixes it under warranty and gives you a loaner to drive. Your payment on a used car are about the same for a new lease vehicle. I've been in sales for years so I know how to really negotiate the best deal and it isn't that hard with a lease and they will bend over backwards to earn your business when threatened with their competition. If they want a down payment for the lease you can have them wash it into the payments and negotiate some more. Do the leg work and home work and you can save yourself a bundle and have the wife driving a new, safe vehicle.

    1Reply
  • Reaz H.
    Rental Property Investor · Raleigh, NC · Member since 2016 · 49 posts · 15 votes
    9y

    You've received a lot of advice from people on this thread. I'm just putting in my few cents on the topic in terms of what I would do if I were in your situation.

    • First of all, the Impala will get expensive to maintain as it ages. But that may not matter if you swap it for another used car. Used cars will cost to maintain. A swap with a cheaper to own car might be better for you.
    • I don't usually recommend buying a SUV. You'll find that you will make little use of the extra space that you are paying for. Instead,  you will be burning through more gas. And if you don't use it, then it's no good is it?
    • Having said that, if you use the extra space for your real estate endeavor it might be worth the change. Imagine not having a pickup but still being able to use your larger car to transport materials for your DIY projects at your rentals, etc.
    • Also you can get a more reliable car for less. I just checked and found a 10 yr old Honda CRV or better yet, an Odyssey that has <70K miles for $9-10k or less. Hondas are fairly trouble free and easy to repair cars. Please avoid European imports. 
    • You can try working a bit more, or have your wife work from home to help fun her need for a better car. 
    • Reduce your cars if possible. Say you keep just the 1 big car and do everything with it. It will be a bit complicated at times and very difficult if both of you work odd hours. But reducing to just the 1 car will be a great decision because it will maximize the utility of your car, reduce maintenance costs as the car ages, and reduce your insurance. Worst case scenario keep the small el-cheapo commuter for small trips. 
    0Reply
  • Denise Mayo-Walley
    Investor · Sugar Land, TX · Member since 2013 · 71 posts · 26 votes
    9y
    A $15-$20k small SUV (such as a CRV) honestly will not offer anymore room than the full-size impala. Also in that price range, you're talking about another USED car. You must decide if you think it's worth spending more money to get a car that offers less trunk space for a stroller and no more seating room - but for it to be higher off the ground. Also, the gas mileage will likely go down, leading to more expense. As a woman, I love the overused happy wife, happy life saying however I'm also sure you're wife wants financial stability for her family as well. Good luck!
    1Reply
  • Natalie KolodijBusiness Member
    Moderator
    Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
    9y
    Originally posted by @David Faulkner:

    Anybody know if they closed that Section 179 tax loophole for "farm equipment" that big SUVs qualify(ied) for? My developer buddy bought an Escalade ESV back in the day, and since it weighed over 6000 lbs, he was able to depreciate/deduct 100% in the year he purchased since it was heavy enough to qualify as farm equipment. God Bless America :)

     You can take more 179 on vehicles over 6000lbs - I think it's 25k for this year 

    I've never found any correlation to it relating to farm equipment though- but I could have missed that part. I always knew it as the "hummer loophole". A way for business men to get huge fancy SUV's when the deduction was really meant for work trucks 

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  • Joe Kim
    Rental Property Investor · SF Bay Area, CA · Member since 2014 · 352 posts · 543 votes
    9y

    Ok...i'm going to dive in and say....NO to SUV.    Minivan is the best way to go.   3 kids!  

    You and especially your wife will thank me if you make this move to Minivan - Sienna or Odyssey.  

    I have 3 kids and here are the key reasons for  minivan

    #1 Largest Cargo room.  SUV is a joke compared to the minivan unless you are going to something gigantic an old school suburban.

    #2 7-8 people seating AND still cargo room for stuff.  when Grandparents visit, or you have to drive your kids friends, etc...

    #3 safer for kids - sliding doors are a godsend when parking.   no slamming your doors into the next car.   No older kids slamming doors on your other kids hands/face

    #4 Cool factor- who cares.  you are a parent.  your life is over in terms of impressing others.   And now you are an investor.  Investors think about value...not image.

    2Reply
  • Zulma Calderon
    Investor, flipper Boynton Beach, FL · Member since 2015 · 23 posts · 3 votes
    9y

    first you have to convince your wife  that the rental investment works and that a lot of people are making and having luxury lives because of it . when she understands that she can let you buy the rental property and with the  cashflow she can have her car.and after few years that condo will help for your kids college and books , then she will be ok with that.  my recommendation is ask her to listen to the biggerpockets Podcasts  in her way to work or when she gets time and after a few of them on her head her mentality about real estate is going to change. . In my house is backwards , i did that with my husband and is working ... good luck....

    0Reply
  • Anthony GaydenPro Member
    Rental Property Investor · Omaha, NE · Member since 2014 · 2k+ posts · 3k+ votes
    9y
    I understand that you are excited about investing, however your wife and family come first always. Buy the car, but also find places to cut expenses elsewhere, work overtime at your job, and look at part-time employment as possible ways to offset the cost.
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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @David Faulkner  I bought a 435k airplane and wrote off about 400k year one..  but remember recapture is a beotch...   and in those days talk about financing I got it for 5% down  only 25k ish.

    and 5% fully amortized over 20 years so payments were only 2400 ish a month.. what a deal to go 200 mph  in style and comfort.

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  • Moshe H.
    Rental Property Investor · Ramapo, NY · Member since 2016 · 243 posts · 108 votes
    9y

    There have been many valid points made here but I haven't seen anyone else come at it from having gone through the same experience... I had a 3 year old when the twins were born. Couldn't imagine fitting the three in the back of a sedan. Car seats are WIDE. In fact, it's almost impossible to fit 2 car seats and a booster in the back row of even my 7-seater minivan, but that's why I have a middle row. 8-seaters are a wee bit wider - I know for sure the Sienna is. I sold my Honda CR-V in exchange for a minivan because, as someone else pointed out, the back seat is not much wider if at all.

    Focusing on spending your money wisely is important. That's why we found our car used on Craigslist for about $8200. Not saying you should do this necessarily, but it worked for us and it's a lot less than $15,000. Long story short, you need a different vehicle - it doesn't have to be new and it doesn't have to cost $15,000. Otherwise your wife will be struggling to buckle everyone in every single time she drives anywhere. Plus it could be less safe, in my opinion.

    Edit: Just wanted to add that we paid part of the price in cash and financed the rest with the bank. It was more hassle than if you buy from a dealer, but it is definitely possible to buy a car from a private party and still finance it with a bank.

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