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I might do the unthinkable.

5K views 28 replies 19 participants last post by  Dan JGC 
#1 ·
I figure what better place to talk to other car enthusiasts about my situation than a great forum with great members. So let me explain my situation here. I am 30 years old and own my own townhouse that I purchased new in 2007. I recently got married to my wonderful wife back in May and we are expecting a baby which is due in August. I have always been used to the single life and have a nice six figure career which allows me to do pretty much what I want as far as cars go. I havent always made the best decisions as far as cars go as I tend to go through them too quickly and as everyone knows its not the best thing to do financially. When I first laid eyes on the new Overland it was something I was instantly interested in and knew I wanted to get one. As you all probably know sure enough I went ahead and ordered one and now I am having second thoughts on this. I want to try and change especially now that I have much greater responsibility with a wife and now a baby this summer. My wife recently quit her job since she is pregnant and we have been talking about selling the townhouse and buying a single family home in the not too distant future. I have decent savings but certainly not enough to pay cash for the Jeep and still have enough to get myself out of this townhouse and a downpayment on a new one. Sooo with all that said I think the responsible thing to do is cancel the order for my new Overland and stay car payment free until its a little more feasible to get back into a $45,000 car. My wife is by no means making me do this however obviously she doesnt recommend it, but she told me to get it if I want it. We certainly arent struggling by any means, but if I were to buy a new Overland it would make things a little tight in the near future if we were to consider moving. The other thing that is swaying me to cancel is I can always consider buying a new 2013 or something in a couple years which will have even more goodies and updates or even a SRT8 who knows. I know I pretty much answered my own question, but I was more or less just looking for a little pep talk from my car friends.
I only paid a $250 deposit which I cant remember if it was refundable or not but thats not really a big deal. If I do decide to cancel would there possibly be anyone here interested in taking over the Jeep described in my signature? I negotiated a damn good price (in the $41's) that maybe the dealership could work out with the new person. I am 35 days into the order and am in D status with a VIN. Also, for whats its worth I certainly dont need a new car. I dont tow, I dont offroad, I dont haul a lot of people I simply love the Jeep and enjoy driving. My current Lexus ES300 is a great car with no issues and is paid off. Alright guys tell me what I already know ;)

Thanks,
James
 
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#2 ·
Hi James.
You could be having what is known as buyer's remorse, either that or you are thinking "smart" and keeping a bit in reserve.
If I were in your position, I would likely wait a couple of months and find a near new 2nd hand jeep with low miles. The depreciation is such that you can save a damn lot of cash letting someone else take the first hit.
2nd hand vehicles can still be placed on a loan or leased, you'll just be saving a bunch.
I have never bought new, always a few months old, with low miles. I've saved myself many tens of thousands of dollars doing that.

Good luck with your decision mate!
 
#9 ·
I agree with Marlin. Wait for it. Let someone else take the depreciation. Besides, the aftermarket has not caught up anyway, so you will be on the edge of your seat waiting for the mods to come out.
 
#4 · (Edited)
James,

I think the fact that it's come to this pretty much answers your question. Let me tell you my story and you can at least know that even us died in the wool car guys make decisions that are tough when it's the right thing to do. 5 years ago I was in the position to buy a Cayenne Twin Turbo so I did. It was everything I expected it to be and more. about 1 year into ownership we purchased some property over on the coast and not long after that things changed with my job so I could go full time VO. We decided to build on the property and move. About 1/2 way into the project it became painfully obvious that the Cayenne and it's fairly steep monthly payment was not the smartest thing to have when you are trying to build your home and the market is starting to go sour. I sold the Cayenne and went to a Trailblazer SS that cut our monthly nut by more than half. I kept that for 3 years and weathered the storm of horrible property values, reduced income without bonuses and everything else that came from the recent depression (sorry, recession isn't nearly strong enough to describe what's happened in our little part of the US, 40% property devaluation, 14% unemployment, etc. etc.). We're coming out the other side now and honestly, I don't miss the Cayenne and it's $1200 payment.

I think you need to get your family started and hold off on any new vehicles until things settle after the baby is born and you get your housing settled. These vehicles will be here in a year or so and like you said, the SRT8 will probably be the SUV that really floats your boat. Take the money you save on depreciation between then and now and buy a bigger house :)
 
#5 ·
Wow, James....first off congratulations on the two counts (marriage and baby) and secondly it's nice to know there are still some responsible youths around to give me hope that my country may not go the way of Rome. That said, my advice is to NOT rush into buying a home.

IIRC, you're in the Chicagoland area like me, and prices have a way down to go. With a child under four or so, a single family home is not essential and may actually hamper you more than you think. Unless you buy a new home, you are going to have things to fix, change, update, maintain, etc. even if you think "..oh this house is perfect and needs nothing!". I've owned several homes, and I said the same thing to myself every time. Take time to evaluate what school districts you like (District 102 is outstanding, BTW) because that should be priority one for your child when the time comes.

The WK2 is already purchased, and you'll lose on the sale so you must consider the loss on that and weigh having a reliable new (opening can of worms here) vehicle vs how much you want to save. You'll make some money selling your townhome, yes? In another two to three years I anticipate townhome demand should be up as people who cannot swing a single family home enter the market.

While I understand the urgency, the rush to do things is not the right speed; slow down, evaluate, plan, evaluate, adjust the plan, evaluate it again and then chart your course of action. If you didn't already buy a WK2, then not buying one would have been more prudent.

However, unless you cannot make the payments AND set aside enough money over the next few years, it is better to not take the financial loss on the vehicle..One additional thought: by making vehicle payments you are helping your credit score which will be helpful when it comes time to apply for a mortgage. Credit history matters and a payment helps.
 
#6 ·
The WK2 is already purchased, and you'll lose on the sale so you must consider the loss on that and weigh having a reliable new (opening can of worms here) vehicle vs how much you want to save.
He hasn't bought anything, he just put down a $250 deposit to place an order. He has no obligation to purchase and has at most the $250 to lose.
 
#11 ·
Congrats Pops, and best wishes to mom and baby.

+1 always good to stay conservative with spending, and at this point you just subordinated yourself to your family's needs for the most part.

That said, what car will your wife drive and how many miles on it and the Lexus?
 
#12 ·
James, I was (am) in a very similar same situation.....

I got Married in August, turned 29 in Oct and our 1st baby is due mid-march. We bought a single family house prior to our wedding.

My wife had a 2005 C-class and I had a 2006 RR S/C & a 2006 Infiniti G35 coupe (which was sold in when we bought our house for extra cash - see what men do for love, makes me sick). Anyway, she wanted a bigger car, not needed but wanted, andwould drive the Range. So, we traded in my RR on her 2010 R350 in June. I got her C-class. I couldn't stand it. So, I did my research and ended up in the Limited Jeep on Nov 3rd. I could have bought a used vehicle but I wanted what I wanted.

We are making the payments; house and two brand new cars and have money to do the stuff we want and need. My parents and her parents think we are crazy. We set enough aside each month for the bills and the future, if/when my wife stops working we will be OK.

You have to decide if your situation can handle a new car at this time. In ours, it was a yes. Would we have a ton more money if we didn't buy two new cars inside of 5-months, perhaps. But who knows. Now, that we are on a "budget" we cook our own dinner instead of eating out everynight. So who is to say if we would be saving anymore than we are now if we didn't have two new car payments. Only you know if you are able to stick with a plan.

You only go through life once, enjoy it the best you can. New Jeep or not, you have a new wife and a new baby soon enough.
 
#13 ·
Sounds like a question for Suze Orman....

Anyway, I guess you have to look at what is changing. The Lexus ES300 is paid off....what can you get for it? The change is the difference between the Lexus ES300 and the Jeep. First, you'll have a 4x4 that can get you through the snow (important with a family), unlike the Lexus ES300. Second, you will have a newer vehicle that is safer esp. with the ACC. Third, you'll have a vehicle with a warranty for repairs.

I would first hold off on selling the townhome. You don't need a single family home with a kid under 2. I don't know what your real estate market is right now....but sell the townhome only if you can get a really good price for it and a deal on a new home. If you have a $200K townhome, you'll be out $12K+ to sell it and thousands on the new home.

The other issue is, what have you saved for retirement....if you haven't saved at least the cost of the Jeep in your retirement accounts (not counting your other cash).....then perhaps a shiny new vehicle isn't responsible. Are you saving at least 10% of your pre-tax income now???

If you always live below your means, esp with a $100K+ job, you'll never have money worries and that is priceless....
 
#15 · (Edited)
Yeah there is pretty much no reason to buy a new luxury item if you cannot easily afford to do so. That might have something to do with this mess our economy is currently in.

Where I bought my vacation home a year and a half ago is like foreclosure city now. Almost all the homes in that area are vacation homes and people really stretched out to buy them and I know more than a few who ended up in bankruptcy because of it. The house I bought was in foreclosure, the people originally bought it (new) for 1.6 I paid 630.
 
#16 ·
Regardless of whether or not you move forward with the Jeep....do your homework on the real estate.....and you thought car dealers are difficult to work with and are clueless...just wait until you're dealing with Realtards®.

Stay put and save up.....

I moved to Florida recently and was amazed on the crazy stuff that was going on down here with real estate. I rented a brand new condo on the beach for 1/2 the price of the cost of ownership for two years before making a prudent purchase.....1/2 million less than another owner paid a few years back...crazy. So be careful with real estate.
 
#17 ·
this is going to sound sappy but here it is. as a father it is our job to sacrifice. we do so in hopes to make a better life for our wife and children. i have learned to find joy in putting off my wants for the other money suckers in my life. i look forward to the day they are out of college. i bought my wife a new x and made her happy, plus i get to drive it. welcome to the daddy club. live by dave ramsey and you will be fine. read she calls me daddy and raising a modern day knight and you be even better :thumbsup:
 
#18 ·
I don't know you personally and don't think a public forum would be the place for advice. But here goes.

Just because you're having a baby doesn't mean you have to buy a big house and get a van. It's just one little baby that will take years to grow. Your current sedan is paid off and fine for a baby car seat. I'm not sure what your recent wife drives but as long as it's a mid-sized sedan, you should be fine. Better if it's paid off.

You've been in your town house only 4 years and not sure if it was new construction. You're probably going to lose money on it if you try to sell. It's probably going to take a while too. I personally know of people with houses on the market for a couple of years.

Keep your car and your town house. Concentrate on the needs of you and your wife while you still don't have any children. Go out. Enjoy yourselves. You haven't had much time as a married couple. You already have pressures of the baby and don't need to add to it with a house and car.

Enjoy your baby and taking care of it the rest of your life. It will be your new job. When the baby is taken care of and things settle down back to normal then you can look at something new.

You probably could get the Overland and trade in the older or less kid friendly vehicle but not the house. It could be the last nice car you get in a while. Just don't get a mini-bus (van), you don't need one until you have at least three little ones unless you can get three car seats in the back seat.

Remember, it won't be a life of DINKs any more.
 
#19 · (Edited)
Thanks very much for all the information and tips guys I do appreciate it. I do want to say just a few more things because a few people commented on how our economy got to where its at because of peoples poor decisions etc etc. Well first off I would absolutely never put myself into a situation where I couldnt afford something, secondly im not necessarily a kid anymore I do have well established credit and do infact have a mortgage on my townhouse that I bought brand new about 4 years ago. I take pride in what I have and have very good credit. So its not an issue of trying to establish credit or being able to make ends meet because everything is fine in that regard. We live comfortably and my gov't job is very secure.
As far as the house goes we are still at that stage where we dont know what we want to do. Our townhouse is basically new and is good size so maybe it would be smart to just stay here for a few more years I dont know. I know I would be taking a hit on my place, but at the same time the place I buy would also be way down as well so its a toss up as far as thats concerned.

I did consider buying a used Overland, but the problem is any used one thats available now or in the not too distant future is going to be a very early built one probably made in 2010 that doesnt have features that I want such as ACC, saddle, or even quadralift for that matter. Thats the main reason I decided to go new.

As mentioned I did NOT buy anything yet I simply put down $250 and nothing more so I can very easily get out of this. As of right now im going to keep the order going as im sure there is still a month or two before its delivered and im going to really think this over and give it a lot of consideration into what you all said.

Dan JGC,
I know you asked about retirement and thanks for bringing that up because I think thats important as well. To answer your question yes I do save for retirement I have been contributing to my TSP/FERS accounts since I started with the FAA in 2006.

Basically, the moral of all of this is its time for me to start being a little more responsible and put others before me especially with a munchkin on the way. Can I afford this Overland? yes Do I absolutely need this Overland? no Does my wife think im an idiot? yes :)
 
#21 ·
I know I would be taking a hit on my place, but at the same time the place I buy would also be way down as well so its a toss up as far as thats concerned.
This is an important point - since you are already "in the real estate market" as an owner of your townhome, you really shouldn't worry about moving from a financial perspective. If you sell the townhome and buy the SF home, and real estate values continue to fall ... well the townhome's value would have fallen too. Same consideration in reverse.

Base your decision to move on where you and your spouse want to be for the next ten years (don't forget to consider school district quality!)

DanJGC is right about the real estate market - it's a grind getting a good property, but there are certainly values out there.

As for the Overland - my advice is to delay gratification. I'm in pretty good shape financially, but I've been driving a 13 year old Jeep and a 23 year BMW for, well .. 13 years :) At this point, I'm excited about my forthcoming Overland, but heaven knows I've waited for it.

Unfortunately, new vehicles are one of the worst investments financially. You need to realize that you are paying dearly for the "new car" smell, etc. That's why I try to keep em a long time and really savor it when I do get a new one.

Lastly, Rosewood mentioned Dave Ramsey: I've listened to his show and on balance he makes a lot of sense. Financial peace of mind is a wonderful thing.
 
#20 · (Edited)
JTS, Are you Air Traffic control ?! :) I think we'll need those foreverrrrr hehe But it looks like you have this figured out!
 
#22 ·
The real estate thing isn't as simple as saying all real estate is down so it isn't costly to move. it is costly. More costly than most people realize. And moving is purely an expense....a huge transaction cost that you will never ever recover. Don't listen to real estate agents for investment advice...heck most can't even take a good listing photo.

You'll be paying the 6% (so on a $200K townhome that's $12K) and other costs, plus disruptions in your life. Then there are the closing costs on the new home and mortgage costs if you have a mortgage. Plus you'll want to decorate. And moving costs. Easily total move costs $20K lost. Plus the SFH probably has higher costs, taxes, etc..... However, SFH do tend to hold and build value better than say a townhome or condo...it really is market specific.

The only way it is really worthwhile to move after only 4 years of ownership is if you find one heck of a bargain on the new place and yet can sell your old place for a fair price.

There is a saying that you make money in real estate at the time you buy it, not when you sell it. What does that mean? Well, two things. First, you decide whether or not you want to participate in this real estate market. Then, second, you decide what you want to pay. When you go to sell it, the market decides the price and you have no power over that (as many people are now well aware) plus most people don't have the luxury of deciding when to sell (as many people are also now well aware) since often it is a life event outside their control....change of job, illness, death, divorce, etc.... So, buy it at a bargain price and you will be way ahead of the rest (better off than most but no guarantee of making a profit).

Homes are mostly a store of wealth (for many a forced savings account) that is protected against inflation but has little real rate of return. It is a place to live, not an income producing investment.

Illinois is still a declining real estate market. Will it go down 30%, probably not. But it won't rebound with any significance either. Probably will be a stagnant asset for at least 5 more years.
 
#23 ·
James,

Congratulations! Its sad to hear you may be giving up the overland but you're making the right decision. My son is turning 6 months tomorrow and I've been married a little over a year now. Nathan just called me today with my VIN number. It looks as though I'm going to head to Chicago after all. We should grab a beer when I'm out there. By the way, do you know what you're having yet?

Albert
 
#24 ·
What part of this issue is "unthinkable"? Canceling a factory order for a car? As you go through life your perspective will change in ways you cannot grasp now. You will look back on this decision and laugh at the fact that you even gave it a second thought. I'm not being dismissive of the thought that you're putting into this dilemma, just sharing a glimpse of what your world view will evolve into someday, God willing. Happens to all of us, as it should.

You are on the threshold of an enormous and life-changing event. Congrats on your recent marriage and the start of your new family, James! Your priorities seem to be well in order my friend. Trust your instincts; sounds like your decision has already been made. :thumbsup:
 
#25 · (Edited)
Buy the house. Your kid needs a backyard with a swingset more than you need a new Jeep.

Home prices are at great levels right now. The 30 year interest rate is starting to creep up right now, so IF you do wait, you'll be spending more for your home. (new cars ALWAYS have some sort of incentives to get you to purchase regardless of the economy)

Oh, and get a dog to go along with that new house, swingset and kid.
 
#27 ·
Keep in mind that there is no urgency to buy a new home...home prices are going to remain stagnant for years..... If a real estate agent tries to push a transaction sooner then later...beware, do your homework...there is no rush.

With car prices, they still run a predictable path....home prices right now aren't. They are probably declining in your area of IL and will be stagnant for some time along with IL raising taxes overall (including probably on home owners since they are stuck).

Just be cautious and prudent when buying and selling a home in this economic era.

I have a lot of experience in real estate even though that is my main thing and have made a lot of money in real estate by making VERY careful, prudent decisions regarding land development in the midwest. I also know of people who have lost a ton of money (millions) in real estate in the last few years and some went BK or are about to soon. The stress of being stuck with declining real estate is terrible since you are completely helpless and have to shell out more money each month...the stress some these people are in have taken them to the brink....

So, just sayin', take your time and make a careful decision regarding a new home in this economic era.
 
#28 ·
I see all this talk about buying a house but I don't think that's the best move for you right now. There are a lot of advantages to a townhouse in the early stages of building a family. For the next 2 or 3 years your life will revolve around the newborn, you don't need to be worrying about lawn care, general maintenance, shoveling the drive in the winter and everything else that's probably done for you as part of your association fees. You also don't know where you'll be by the time you new child is ready to start school or what new priorities you will have as a new father.

Although real estate prices are at historic lows the fact you already own means the value of your town house should track the rest of the market. If the market goes up for that new house you want the value of you town house should track up as well keeping the difference between the two pretty much that same. If you were renting then that would be a different story but you aren't so my advice would be to stay put. You have 4 years or so to make the final decision on which neighborhood you want to raise your family in, don't rush into something now that you might regret.
 
#29 ·
Although real estate prices are at historic lows...
Not really in real dollar terms following the long term home price trend line. We're still above in many areas with a further 5%-10% decline to return to trend line not out of the question. Realistically, these things should dip below the trend line before hitting their lows.

Home prices are also being propped up by artificially low interest rates engineered by the Fed and of course nearly all new mortgages are being bought up by the Fed Govt. and backed by them. Once interest rates are no longer being manipulated, they will rise and thus home prices will need to fall further to match the monthly affordable payments under higher interest rates (6%-7%+) since most people buy homes via financing versus outright cash purchases. Moreover, a return to the 20% down is happening and will continue to be entrenched as the Fed Govt exits its involvement and the banks return to originate and hold and any mortgage investors require more skin in the game...resulting in even fewer buyers and more downward price pressures. Add higher home ownership costs (taxes) and home prices will have to further decline to remain affordable on a monthly payment basis. Selective inflation that doesn't included home prices will also put downward price pressures on home prices.

The bottom line in real estate is that you make your money (or lose the least amount as the case my be) at the time you buy it, not when you sell it.
 
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