Car buying with kids

[Librarian of Doom]

Backstory: My husband and I have been married for almost 9 years. We each had individual cars before we got married, both were old "beater" cars that died shortly before the wedding. After we got back from our honeymoon we went car shopping and bought a 2003 Chevy Cavalier. We were able to pay cash for it. We bought it in part because all the reviews basically said "you can drive it into the ground." We had a second beater car for a short time, also paying cash for it, but it had issues we didn't have time or money to fix.

For most of our marriage we've just had this one car, which was fine for awhile. But now we have two kids and are contemplating a third and the maneuvering required is getting ridiculous, not to mention we're at almost 175,000 miles on the Cavalier. Plus, the back seat is not big enough for 3 car seats, or 2 car seats and a booster. We're getting to the point where we're not going to be able to put off buying another vehicle much longer. Unfortunately, we're not in a position to pay cash, which means we're going to have to squeeze a car payment into our budget; we can probably stretch to $200/month, maybe. Add to that my almost pathological loathing of car salesmen, and the ridiculous prices being charged for anything under 100k miles and I'm getting very frustrated, as well as overwhelmed sifting through online reviews.

Does anyone have recommendations for vehicles that are good for hauling the kids around in? We're going back and forth on the question of minivan/SUV vs. sedan; opinions? Should we just bite the bullet, buy a beater, and save up until we have cash for a newer one?

[mandy75]

I really recommend a van, especially if there is going to be a 3rd. My husband got me a Town and Country when our 3rd came along, it was just not a good idea have 3 small children sitting side by side in a backseat. Now that they are older, we traded our van for a Chevy Cobalt and I LOVE my little car, but still miss the van sometimes.

[Pat G]

I've no idea about the American car market. If you were in Australia i'd recommend a vehicle like the Honda Odyssey (Wikipedia tells me is available in North America). You could grab an older model for much less, while not as good looking is still a reliable big minivan, lower to the ground so you don't have to feel like you're loading up and getting in and out of a truck.

[leadchipmunk]

This should fit the kids.

Besides that, I'd say go with a minivan. A 3 row SUV, like certain Ford Expeditions, would be good if you live somewhere where 4wd is necessary.

I don't have any recommendation on which vehicle to get, I prefer to stick to 2 door Jeeps and am trying to find a way to get rid of my backseat and increase my secure cargo space.

[Haikoo]

THough I hate the mini van because I don't want to drive a minivan..it is awfully convenient. And more economical. We went with minivan over SUV because of cargo space. Most of the 3 row suv's (except maybe something like a suburban) don't have any cargo once you get all those seats in there. It isn't like you can just move a kid, know what I mean? NOw it COULD work if you could manage to squeeze 3 in a row in the middle seats, but anyone who has ever installed 3 carseats in a row knows that that takes a magical combination of the right car and the right car seats, plus a lot of blood, sweat and f bombs.

We have 3. We started with one girl, then had twins. It is certainly nice to have the space of the minivan on trips and things. Plus there is room in the back for groceries, suitcases, bags, whatever equipment is needed. Once we are all in boosters (soon) I wouldn't mind getting more of an SUV type, but they are so much more expensive, it is difficult to say if we will ever get to that.

[Oogiem]

I know this isn't exactly the common option but I'd take a look at finding a nice used full size pickup truck with a crew cab. Our wonderful Dodge ram 2500 with full 4 doors has plenty of room for hauling 3 adults in the back seat and you still have a truck to haul the rest of the stuff. We got a shell topper for ours. New diesels are very expensive, but I'll never own another gas vehicle just based on lifetime costs. If you can possibly manage to get one, a good diesel truck should last you easily 15 years or more.

If you do go the diesel route let me do some checking on what is the best engine now. Ours is a Cummins and I think it's one of the best engines out there. We got our truck new in 2004 and expect to keep it for another 10-15 years.

[bgvanbur]

When we had an SUV (Toyota RAV4) with two kids (both in boosters) and my wife had to watch a friend's baby, it was a squeeze to get all three kids in the backseat. I don't think it would fit one booster and two baby seats.

This is one of the reasons my wife finally bought the minivan she always wanted (Honda Odyssey).

[dshale]

My wife drive a honda odyssey. We have two young boys. Sliding doors make it easy to get them in and out. The good outweighs the bad once the second came along. We also have a nephew that we babysit from time to time that is 3. My vote is to bite the bullet and get a van. We got ours used but a newer model for $240 a month.

[morethanjustamom]

When I was pregnant with our 4th, we went from a Chevy monte carlo (loved that car!!) to a dodge caravan. I really enjoyed the minivan because I'm short (5'4"), and getting babies in car seats in and out was much easier than an suv.

I got a ford expedition a few years ago, and I love it, but all of my kids are bigger now, no carseats, they have bigger friends, etc. I recommend a minivan if you have babies or small kids, suv if you have bigger kids or teens.

[BarefootDawsy]

My sis just pocked up a 3 year old Dodge Caravan that may as well be brand new and it wasn't too pricey. She loves it and says she'd never go back. Oh and she's not the sort of person that I would ever have expected to want a minivan

[ETFnerd]

car loans happen to be dirt cheap right now. this credit union is offering used auto loans online at 1.99% interest:

https://www.penfed.org/used-auto-loan/

you said you had a budget where you can squeeze a $200/mth payment. it sounds like you're stretching it. normally i wouldn't suggest you go into debt, but auto loan rates and terms are really great at this time. there is a sweet spot in that lending market.

better if you calculate using a $150 monthly payment to be safe. then over 60 months, you'd need to pay $9,000 in payments, and at 1.99% interest, you could borrow about $8,500.

better yet, calculate using a $120 monthly payment to be even safer. Then, over 60 months, you'd need to pay $7,200 in payments, and at 1.99% interest, you could borrow about $6,750.

credit terms on auto loans are exceedingly easy today as long as your car is worth the amount of the loan and you have a job. you should give it a shot even if you have bad credit.

when you get approved for the loan at the credit union, they will cut you a check for $8,500 or $6,750 depending on which payment you choose.

you can then go to the dealer to choose the car you want up to the price you want to pay. the way i'd do it is to look around for a car and ask for an "out the door" price that includes everything, tax, tags, license, fees, etc... make sure it's everything. it's important that you ask for an all inclusive price so that you know you can afford it.

after you've identified a car that maybe the dealer will let go at say $7,000, offer them $6,500 and pay at most $6,600. If they don't want to negotiate, walk away. you've got cash in your pocket and it's up to them to get you to part with it. they'll want to play ball, they sit there all day to make sales, not to talk to people.

don't tell them up front that you'll be paying cash. dealers make a lot of money from financing. they'll assume you'll be financing it because most people do. if they ask you whether you'll need a loan, say maybe. once you've negotiated the lowest price for the car tell them you'll pay cash.

try to make sure that you buy a car that will last the 5 year term of the loan. i think that amount should be enough to buy a minivan.

good luck.

PS: you can qualify to join that credit union if you have a family member in the military or who is a veteran. otherwise, you can make a $25 donation to a military charity and get in that way.

[IfItPlugsIn]

I know this isn't exactly the common option but I'd take a look at finding a nice used full size pickup truck with a crew cab. Our wonderful Dodge ram 2500 with full 4 doors has plenty of room for hauling 3 adults in the back seat and you still have a truck to haul the rest of the stuff.

We have a 2006 Dodge RAM 1500 Mega Cab that we bought new. I hate driving it because I'm normally a small car person, but I absolutely love the spaciousness. I can walk around in the back seat (makes buckling the kids so much easier). Plenty of room for 3 car seats. We also have a 2003 Chevy Impala. Mileage rocks, but squeezing in a 3rd carseat is going to be really tight. When we get something new, it will probably be an SUV (husband wants a Suburban), mostly for the seating, cargo room, and towing.

[ETFnerd]

downside is that full sized pickups and suv's aren't exactly fuel efficient, are more expensive and tend to depreciate faster...

[IfItPlugsIn]

downside is that full sized pickups and suv's aren't exactly fuel efficient, are more expensive and tend to depreciate faster...

True, which is why we have the Impala (32MPG lately!). But if you're intending to run a vehicle until it dies, depreciation doesn't matter much (gonna be $0 when you finally ditch it), and I don't know how a van compares to SUVs and trucks. Our truck gets 15-17MPG, and a diesel would get much better (but fuel cost is a little more). Size and space is going to decrease the fuel efficiency, so it's a trade-off. We also need to be able to haul our yellow lab, and pull our trailer. I miss my Corolla... sigh.

ETA - 4WD is pretty much a necessity for the winter here too.

[Oogiem]

downside is that full sized pickups and suv's aren't exactly fuel efficient, are more expensive and tend to depreciate faster...

Our big truck gets 23-28mpg

If you plan to keep the vehicle for a long time depreciation doesn't matter.

Our truck was a top of the line model with a lot of extras, heated leather seats, which are actually wonderful in our winter and a lot of specials I wouldn't have normally gotten. Total out the door cost brand new was $38K but we've already owned the truck for 8 years and have no plans to replace it within the next 10-15 years or so. Maintenance is fairly inexpensive and we should get 250K miles on it before we need to do anything major at all and many local trucks get to 500K miles before needing major work.

I think you need to look at lifetime costs when choosing a vehicle. But then again I'm a buy a new car or truck and keep it until it's dead kind of gal.

ETA we are also in a 4WD required area and also haul things like 6-8 bags of dog food, pine shavings a trailer full of sheep and other stuff regularly. One big plus for a diesel is if you redo the tubing in the engine you can run biodiesel and with a bit of extra work you can run straight vegetable oil in it. A diesel engine can be run on all sorts of stuff you can grow and make yourself and if you are in an area with fast food joints biodiesel from used fryer oil can be made inexpensively as well. Watch the highway tax issues but it's a good option. Locally fryer oil is in high demand for the various biodiesel makers.

[ETFnerd]

there is no way that a full sized pickup with an extended cab gets 23/28mpg. 15/20mpg is more like it. if you're hauling stuff on it regularly, you won't even make that... 23/28 is what a honda accord gets for gas mileage...

http://www.fueleconomy.gov/feg/byclass/Standard_Pickup_Trucks2012.shtml

[msuroo]

dealers make a lot of money from financing.

Having worked in auto finance my whole career, this is one of the things that very few people understand. Most dealers don't actually do any financing themselves (in fact, most are borrowing on floorplan loans just to keep an inventory). The majority of financing comes from either the captive finance arm of a manufacturer (Ford Credit, for example), a large auto finance company (Ally Financial, TD Auto Finance), or from a commercial bank (JP Morgan Chase). In any instance, these companies provide the dealers a matrix based on vehicle type and credit grade as to the rates they are willing to lend at.

Seems straightforward right? You are looking to by a $10,000 Dodge Caravan (or whatever). The bank is willing to lend at x% based on that car and your credit score, and the monthly payment is just a function of math. Except not. Dealers are allowed to write up that rate when they draw up the loan contract, and any difference between the market rate and the contract is kept by the dealer.

This is why, if you let them, dealers will always negotiate based on monthly payment, rather than vehicle price. There's no confusion with price - the sale either happens or it doesn't. But most people shop based on monthly payment amount because that's how they are paying for the car, and dealers prey on that.

That's not to say that getting financing from one of those sources is always a bad idea. Especially when it comes to captive finance companies, the parent company manufacturers will often subsidize the loans of the finance arms in order to "move the metal". (When you see ads for 0% financing, this is what is happening.) If you go that route, get the dealer to show you the bulletin from the finance company/bank showing the minimum rate that they will lend at to make sure that's what you are getting. Dealers will be reluctant to do this, but if they want your business bad enough (and they do), they'll show you.

Then again, if you are looking at a used car, there's not likely to be a lot of loan subsidizing going on, so you're probably better off just getting a pre-approved check from the credit union and buying from the dealer in cash like ETF recommended (this is what I did when I bought my last car).

[ETFnerd]

yeah, maybe it wasn't clear but car dealers don't have their own funded financing, but they make a lot of money from financing cars as distributors of financing programs, often they make more from this activity than they do from selling cars after expenses...

i would go even further to say that the banks and finance companies don't provide the financing either, it is the securitization bond investors who buy the pools of auto loans tendered by the finance companies... banks' expertise is supposed to be credit risk underwriting although i'm not so sure these days...

who are these investors? probably an insurance company or pension with long duration assets and liabilities...

where do they get their money? from people who buy insurance policies or save for retirement through their work...

who is that? probably you... so you are in the end borrowing from your consumption/saving behavior and paying a lot of intermediaries along the way...

beautiful how our complex economy works...

[wildross]

there is no way that a full sized pickup with an extended cab gets 23/28mpg. 15/20mpg is more like it. if you're hauling stuff on it regularly, you won't even make that... 23/28 is what a honda accord gets for gas mileage...

http://www.fueleconomy.gov/feg/byclass/Standard_Pickup_Trucks2012.shtml

Not stock.. My neighbor gets 23MPG on the highway with his F350 dually, 4WD, stretch cab, once he added some aftermarket tuners. My son regularly gets over 20MPG with his Dodge 2500's, 4WD, again, with a tuner (and he drives HARD).

My stock Dodge 3500 dually gets 18MPG unloaded on the freeway. Once I pass 100K, I'll drop the DPF to improve the mileage.

edit: Oogies' truck is old enough that there are lots of mods to get that kind of mileage. The Dodge Diesels are very customizable and the 5.9L series is holding its value very well because they have less emissions controls on them.

By contrast, I have a friend with a Dodge Dakota, quad cab with a small gas V8. He gets about 12 on the freeway.

And my wife loves driving the big truck in traffic. When we had the kids, we ran 2 Suburbans back to back. One went to 225K miles, the other we got rid of around 180K. Great vehicles.

[msuroo]

yeah, maybe it wasn't clear but car dealers don't provide financing, but they make a lot of money from it, often more than they do from selling cars after expenses... i would go even further to say that the banks and finance companies don't provide the financing either, it is the securitization bond investors who buy the pools of auto loans tendered by the finance companies... who are these investors? probably an insurance company or pension with long duration assets and liabilities... where do they get their money? from people who buy insurance policies or save for retirement through their work... who is that? probably you... so you are in the end borrowing from your consumption/saving behavior and paying a lot of intermediaries along the way... beautiful how our complex economy works...

Sorry, I wasn't suggesting that you didn't know how auto finance worked, but just that the majority of consumers don't.

[ETFnerd]

makes sense that you're in se michigan and work in auto finance... business must be booming these days... i worry about these consumer loans since it seems to be just about the only place these days that's seeing growth...

[Librarian of Doom]

I have no car advice. I choose to take public transport everywhere, or walk. Which has its challenges, but it worth thinking about if you live in a good area for buses/trains.

I wish! We're in a semi-rural/semi-suburban area. No commuter trains. Public transit would cost me about $12/day round trip to get to or from work, so $60/week, more than I plan on paying for a car payment. I've toyed with the idea of riding a bike to work. The distance isn't far, but we're in a very not-cyclist-friendly area, and I would need to cross two highways with speed limits of 55 and 65 mph (around 88 and 104 kph). Add to that the fact that I would be crossing in the dark in the mornings about 3/4 of the school year, and I don't feel safe doing so.

Thanks for all the suggestions. Special thanks to ETF and msuroo for the suggestion of getting the check first, then going to the dealer. For some reason, that hadn't occurred to me. My brother is active military, so I may check out that credit union.

[LRB]

Never imagined I'd say this, but I LURVE our minivan. Honda Odyssey -- seats 8, drives like a car (not a truck), and is amazing and convenient in all the right ways. Honda makes really long-lasting, reliable cars. I bet you could get a good deal on a used Odyssey from some family that has grown beyond its minivan phase and is selling.

[Oogiem]

there is no way that a full sized pickup with an extended cab gets 23/28mpg.

We track it accurately so yes we do get that on highway. Our truck does a lot better than the sticker said it would, maybe the way we drive? I have no clue why but it's a great truck.

[Oogiem]

When estimating the financial costs of a car, you need to include the costs of petrol, maintenance & repairs, cleaning, insurance, registration, parking fees, equipment (like car seats) and replacement cost (e.g. assuming that a car lasts 10 years). If you take the time to do the maths, you'll most likely find that public transport works out cheaper, even allowing for the occasional taxi ride.

Agreed on the need to include all costs to get an accurate picture but disagree about public transport.

There are thousands of places in this country with NO as in ZERO public transport AT ALL. I live in a county that does not even have a taxi company in the entire county. There used to be one in Delta, about 30 miles away, but they shut down a few years ago. Mearest taxi company is 75 miles from us.

There is one senior bus that will come pick you up for senior daycare or to the once a week seniors lunch and a bus that goes once a day to and from downtown to the pool the next town over so kids can get a rid to the pool but otherwise there is no public or even private paid for transport at all.

If you cannot drive you depend on the neighbors to take you.

For most of rural western US public transportation is a total joke, the nearest bus station for long distance travel is also 75 miles away as is the nearest train station.