Is it a good idea to keep my current car and purchase another car, knowing my current car has mechanical issues and is a gas guzzler? If I purchase another vehicle and keep mine, I will have two payments. My salary can afford it, but does it make sense? Or should I trade mine in, have one car payment and when it's time, look for another car for me?
-- Trevor Transport
Dear Trevor,
If the car's worth $3,000 more than the car loan even in its current state of disrepair, what'll it be worth when you put in a couple of grand in repairs?
I'm going to suggest you fix your current car with an eye toward giving that to your child when he gets his driver's license, and you focus on buying the high-mileage car for your commute that will allow you to manage your fuel costs.
It's also likely to make sense from a car insurance perspective for your child to have the repaired old car versus a newer model. You say the car drives just fine. I'm going to take that as it's reliable and dependable or will be after the repairs are completed.
I'll also suggest you don't buy the second car until you're ready to turn over your current car to your child. Why take on the car insurance expense, depreciation and maintenance of a second vehicle before he can drive it? You'll be paying more in gas over this time frame, but the additional fuel costs should be less than the expense of owning two cars when you only need one.
A child having a car isn't a birthright, but it sounds like you've already made that decision. From a car insurance perspective, putting your child in a dependable older car in his first year or two of driving can make sense financially. You just have to be comfortable about how safe he is in the vehicle.