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Would like some feedback on the economics of whether to sell/trade our cars for different vehicles. In another thread, where I was seeking suggestions on cutting the budget, someone suggested that we sell one of our vehicles and replace it to have a lower gas mileage vehicle.

This has caused me to look at the situation very closely and would appreciate feedback.

Frankly, while we've been in debt paydown mode these past 2 1/2 years I've tried not to think about cars. We paid off my car loan almost a year ago and so we no car debt. And, I knew that I never wanted to have a car loan again. At the same time, I had this nagging thought in the back of my mind that at some point car replacement would be an issue and I knew we weren't currently saving for it.

The thing I wasn't paying much attention to was automobile expenses. I knew they were there but hadn't really thought too much about them since I wasn't considering changing cars. The feedback in the other thread caused me to look at this more closely.

Automobile expenses overall run about $1700 a month including fuel and maintenance and repairs. I think we could cut that by about $7000 a year through changing to vehicles that are more fuel efficient and, while still used, would be newer, lower mileage vehicles that needed less repairs/maintance.

3 main options - do nothing, replace with vehicles costing no more than we can realize from selling our vehicles, or replace with vehicles that cost somewhat more paying the difference out of pocket. One reason to look at this seriously now is that my husband is getting a larger bonus than usual in March, he will net around $21,000.

So what to do with the $21,000? One option - pay roughly $12,000 to Bank of America for a credit card that is at 1.99% that will expire in May. Pay $5400 to finish paying off our house insurance for the year. In addition we have $5400 for furniture at 0% that expires in June. We also have $5500 that is due on furniture on 0% that will expire in June.

Another option - Use that money (or part of it) to straighten out the vehicle situation not the next several years. If we did that the $12,000 would be transfered to the 4.99%. The furniture we would be able to pay by June in any event. The insurance we would continue paying for over the course of this year.

Our vehicle situation is somewhat complicated. In replacing I have 3 main concerns - vehicle safety, fuel costs, and repairs/maintenance.

Lexus RX300 - 1999 with over 100,000 miles on it. This vehicle is driven primarily by our au pair to drive our son to school. It will probably have 30,000 to 35,000 miles put on it this year. Mileage is about 18-19 miles per gallon.

What I like about this vehicle is that I feel it is a very safe vehicle. Since my son rides in this vehicle daily for a long distance I am not going to replace this with a tiny car that I would feel is unsafe. About as small as I would go would be a Honda Civic. This car has been a good car for reliability but is starting to have more and more repairs (at the car shop for the second time this month even as I write this).

I could replace this with something like a 4 year old Civic -- much better gas mileage and new enough that it make not have as many repairs. We would expect to keep it for several years for my older son to drive when he starts college.

I have looked at vehicles that would be available to replace this vehicle without us spending any more money and I would not be comfortable with those vehicles for my kids to ride in. I would rather pay the extra money for gas and keep this. So replacing this car would cost perhaps $4000 extra.

Nissan Quest - 2004, 71000 miles - This car has 2 functions. About 20,000 of its annual miles are me driving it two and from work. I love this car and enjoy driving it. But it oonly gets about 18 miles per gallon. The second function (maybe 5000 miles a year) is to be our family car. We have 6 people living in our house and at least once or twice a week need to transport 6. This car has very nicely served that need (video system for kids, for example). However, logically, it doesn't make sense for me to be driving this car when 80% of the time I am by myself. We have come to think that the family car should be the vehicle that is driven the least (my husband's vehicle).

The replacement vehicles I have been considering the most is a low mileage 2005-2007 Toyota Prius which would still be under warranty. These seem to be available for around $18,000 to $22,000. The older ones have the fuel savings but have enough mileage not to be under warranty. The newer ones cost more but are under warranty.

Ford Excursion - 2000, 165000 miles - This car has 2 functions currently. DH drives it to the park and ride van pool area. Also, it used for transporting our large dogs with large dog crates, particularly for dog shows. We rarely use it as a family car except for dog shows.

This vehicle has a diesel engine and while its fuel mileage is not good, it is better than many vehicles of similar size. The only way we could significantly improve the fuel mileage by replacing this vehicle with the Toyota Highlander Hybrid, but even used ones of those are well above our price range.

Replacing it would do some other things for us. First, this is the vehicle that I have been most worried about replacing. Last year it did not need many repairs (about $1000 as I recall). The two years before that it was about $2000 per year. Replacing it with a used vehicle (such as a Suburban) that was 4 or 5 years old and that had under 100,000 milege would alleviate the concern about having to replace it and buy us several more years. I think we could replace this with something in the $12,000 to $15,000 range that was 4 or 5 years old.

The other thing is does is replace a vehicle that I do not feel comfortable using on a weekly basis as a family vehicle. Based upon the reading I've done on accidents/deaths and vehicles, I do not find this vehicle safe (DH disagrees). To put it clearly -- I would not sell my Quest if that meant the Excursion would become the family vehicle. I would want something else to be the family vehicle (most likely options are a Suburban or some other SUV or a minivan that seats 6 and that can be modified to hold a dog crate or two -- even if that means that only 2 people can be in it while crates are there).

If we replaced the cars we would be set on the car front for the next several years. We would not go into debt to do it and we would cut our car costs about $7000 a year.

Or we could use the $21,000 to pay to debt, the primary part of that going to pay debt that would otherwise be at 4.99%.

I'm somewhat conflicted as to what to do. We could alternatively try to trade in the cars (or some of them) for vehicles that would not have any net cost to us. The main problem with that is that doing that means getting vehicles with better gas mileage, but with other problems and it doesn't solve the car issue for the future.

(I do realize that this isn't all or nothing. We could use some part of the $21,000 for this but not all of it. I am just trying to present the alternatives as clearly as possible).
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