Keep Clunking or Buy a Used Car?

Dear Miss Mota Mouth,

We have a 94 Explorer that is about ready to die. It can’t be worth more than $1,500 and needs about $2,000 works immediately to be safe. Is it worth it to fix up this car or should we look for something else.

We have been looking at 2004 Corollas and for under $15,00 online and can buy one with around 40K miles for cash. On the other hand, we own a home and could use the $15k to pay down the 5.8% mortgage.

Ben and Beth in Alabama

Dear B & B,

If you have such a good rate, don't pay down your mortgage! You can afford to pay cash for the new car and (by the sounds of it) you need it.

Paying cash when you are buying online also means that you will be able to buy from a private seller and that translates into your buying dollars having a lot more oomph because private party will be below any dealer’s retail cost!

You can always write off the interest paid on the house and not so much on car repairs. Glad to see that you are considering a car that will have some staying power with its maintenance because I suspect that you will drive this car until it bites the bucket.

Onward!

M

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