Justify the Note...

There's no way to justify it monetarily. Driving your Frontier will be cheaper...no question about it.

You just have to decide whether or not having a new vehicle you want is worth the cost of obtaining it. If its not...then you're better off sticking to your Frontier.

 

It's not just about fuel. How much are you paying in maintenance and repairs? Tire replacements? Insurance?

Add up all the expenses for both cars (say on an annual basis), then compare the bottom lines.

 

$400 / month? Ouch!! Keep the truck unless you really need a 4-seater. The luster of a new car will wear off in a couple months, but the car payments won't go away.

I think non-CA hybrid warranty is 100k miles/ 8 yrs, so 12.5k mi / yr.

Looks like you're about 8k mi / yr, so won't get max battery warranty advantage.

But the Prius is amazing on gas. I can't miss getting 55 MPG in a 2010 and easy on the environment.

 

My recommendation, keep your paid for vehicle. When you absolutely have to have a new vehicle because the old one isn't dependable anymore then consider the Prius. I don't think you can ever justify the cost of a new Prius based on fuel mileage alone. If on the other hand you really want a Prius and the $400 a month extra is no problem for you go for it.

 

I did a similar comparison when ditching my Kia Soul for my Prius, although my situation was a bit different from coach81. Obviously one of the biggest deciding factors was from a gas saving point of view.

I still had 3 years worth of payments left on the Kia when I got the Prius. Based on driving 15,000 miles a year (45K miles for 3 years) and $3 a gallon gas...

The Kia Soul:
21 mpg combined
12.7 gallon tank
266.7 miles per tank
$38.10 per tank of gas
168.7 fill ups in 45K miles
$6,427.47 for gas in 3 years

The Prius:
52 mpg combined (yes i've been getting that)
11.9 gallon tank
618.8 miles per tank
$35.70 per tank of gas
72.7 fill ups in 45K miles
$2,595.39 for gas in 3 years

There you have it, a savings of $3,832.08 for 3 years worth of gas by having the Prius.

Of course there are other considerations as well.

Toyota reliability versus Kia: Prius
Toyota resale value versus Kia: Prius
Toyota driving refinement versus Kia: Prius
Coolness factor: Prius (but totally subjective)
Technological innovation: Prius by a landslide
Features: Tie (Prius has some features that the Kia didn't and vice versa)
Price: Kia
Fuel Consumption: Prius
Insurance: The premium went up by $30 for 6 months on the Prius

Sure it might cost more of a pretty penny to drive a Prius over the average run of the mill car out there. But if that is the only consideration then heck I'd recommend a used Geo Metro that gets 50mpg too.

Your ownership satisfaction of having a Prius versus a Frontier is the bottom line. For me the decision was simple. The Prius is really worth it.

 

Borrowing money to buy a car is never a good idea. Only do it if it is really necessary.

Tom

 

Nothings cheaper than what you own. you can buy a lot of gas for 400$ a month!!Keep your old car, Gas is cheap now!!remember 5 bucks a gallon. Put that 400 $ in the bank
for a better down payment = lower payment !!

Good luck
Scott

 

It is possible to trade for a more fuel efficient used car. Also, factor in future gas price spikes. Have you replaced the timing belt, water pump, etc.? At 8 years of age that time is approaching, and you don't want to push it with the timing belt on interference engines. How about a newish non-hybrid (corolla, civic, fit, matrix, scion, etc).

I recently traded my 2003 Tacoma Quad-Cab which I loved for my 2010. Tacoma had only 46000 miles, and no problems. I did not have to shoulder a note to do it, thankfully. But I still say consider a newer used model, Prius or otherwise. There has to be a point at which a small note payment is better than feeding fuel pumps.

I kept my truck longer than I should have and know it is a tough decision. Good luck with yours.

 

Drive your Frontier until it falls apart. Cars are appliances, unless you're keeping up with the Joneses. They get you from here to there.

Then again, if everyone thought this way, our economy would be toast. Or would it be?

 

We've been round and round about this, but this is your opinion. Personally I would never pay cash for a car...unless for some reason I couldn't get financing that was halfway decent. Keeping my $30,000 invested is much more important to me than paying a little interest. Now if I were retired and needed to avoid monthly expenses that would be one thing...but I'm not.

Anyways, even when you factor in repair costs and whatnot...the car you already own is going to be cheaper. Its not only the $400 a month, its the depreciation too which is much greater on a new car (even the Prius) than it is on an older car like your Frontier where you've already taken a big depreciation hit.

 

I don't think borrowing money is necessarily a bad idea...

I put down $17k on mine and borrowed $14.4k for the rest w/ pp. maint (I got hosed during the good 'ole Summer of 2008)

But, I paid off that $14.4k in 13 months, so only paid $425 in finance charges.

But, if it takes 4 or 5 years to pay off, the finance charges will be much more. But, like SW03 said, if you get 10% ROI's and 0% financing and you know you could cover the debt, and need a car, well, you'll know what to do.

One thing is cool is if your finance company pushes back the payment due date when you pay extra. Wachovia did that for me. It got to where I didn't owe a payment for 2 1/2 years if I chose.

I think the worst is to borrow $20k and have no savings to back it up. If lose your job, may need to sell the car as a substantial loss, which is a total waste.

My 2009 Prius is not perfect by any stretch with original seat sitting in house by my choosing, but life's not perfect. It's paid for so it's a keeper.

 

... and I think there is a time to buy a new car when all the needs are there and the car is a great fit. Sometimes a used car is a better way to go.

 

Borrowing money is not a bad idea, but only if your investments earn more than the interest payments. Car loans commonly cost more than most common investments earn, so it's a losing proposition.

If someone will loan me money at a very low rate I will take it, but most lenders are in business to make money.

Tom

 

Otherwise, it wouldn't be business.

 

The car is an expense, when I switch cars earlier than necessary, I try to keep the expense the same.

 

Don't buy with dreams of 50mpg gas mileage. I don't doubt some people are averaging 50+ mpg but I am averaging 34mpg. Thats a big difference and although its better than most cars, its not enough to switch what you are driving now for.