We bought a brand new 2008 Honda Odyssey EX. We picked it up last week and we love it so far! I feel a little guilty saying that since hey, a new car costs money, but I think we did it as cost-saving as we could.
See, we could have stuck with our 2004 Toyota Corolla, which was a great car. It had a relatively good number of miles on it and it ran well. Thing is, it was getting too small for our family. We’ve been getting by finding ways to fit everything into the trunk of the car on various outings.
Shopping at BJ’s was always fun since we had to get things like diaper and wipes boxes into the trunk as well as the stroller (remember, we have two kids one of which is a toddler). On some days we got real close to not fitting everything.
The other things was we really couldn’t fit any more people than the four of us. Maybe we could squeeze a friend of my daughter’s in but that was it. We wanted to be able to transport more people if we wanted (and hey, there’s always the possibility of more little ones too).
Let me show you what we did to keep costs down:
We traded in our Corolla
We considered keeping it but we didn’t need two cars. We were better off putting the car toward the cost of the Odyssey.
We researched and then researched some more and then shopped around
We checked Consumer Reports, Edmunds.com, the official Honda site, the Official Toyota site…We looked everywhere we could to make sure we understood what the dealer costs were and what prices we could expect to get for both the new car and our old car. With this information we shopped around until we found the best price from a dealer. In the end, after an odyssey of our own, we received a price that we were happy with (much less than MSRP and lower than dealer invoice).
We added some luxury but not the works
I wanted power side doors which put us up higher than the base model. After that we didn’t go for any other options. As much as we would have liked them we didn’t get the navigation system, the DVD player, the leather seats, etc… We looked at what we knew we needed and wanted and stuck with that.
We got a great financing deal
I know, buying a 2-3 year old car and paying for it in cash is what a lot of experts say is the best thing to do. We’ve had bad experiences with older cars already and we know we are going to use this car for as long as we are able (many, many years we hope!). We considered a used car but in the end we wanted new. One thing that helped decide was the fact that Honda is offering 0.9% financing right now (Toyota was offering 0% but we preferred the Honda overall). Financing for 0.9% is real close to free money (a great reason to make sure your credit score is good).
So you know, we have enough put away that we could have paid the car off entirely but since the rate is so low we can keep the money in our Capital One 360 Savings account and let it earn interest while we pay the fianancing. I did some quick calculations and our financing is costing us less than $300 while we could earn around $1,800 keeping the money in our savings. For a used car the fianncing would have been much higher.
Our insurance will be lower
As an added bonus I found out that our auto insurance premiums will be lower since the Odyssey is considered a safer car.
Our vacation will be more local
We were undecided on what to do for vacation this year. We were strongly considering flying off somewhere that has Caribbean water. But now that we have a new car with more storage space we’re going to do a driving vacation and travel within a day or two’s distance and check out the sites. Yes gas is expensive now, but we’ll still be saving more than if we flew somewhere.
We have a little bit of buyer’s remorse knowing that we have a debt to pay off but we’re really happy to have gotten the car! We’ve already taken a couple of small trips and we plan to do some more (there’s a frugal list of things to do somewhere out there isn’t there?).
A car is a great big expense. But I think we purchased ours in a way that’s financially responsible.