What should I do?

That used to be a consumer sales premise, need vs. want. It's easy for a car salesperson to satisfy need, the buyer has to buy something. It's not so easy to satisfy want since it's emotion based. Selling a want-biased consumer is much harder for a salesperson to score. Ninety percent or more of buyers fall into the "want" category, yet consciously those buyers try to convince themselves that "need" is the prime basis.

So, as you said, the original poster wants a Prius, but is hoping to find support and rationale to need a Prius. His current car is paid for and satisfies his transportation need.

 

Hence the large amount of money spent to convince people they need something they really don't.

 

Definitely this.

 

Hey, that's called marketing 101 and Toyota is real good at that

 

You don't drive much at all, really. You should keep the Rav4. Especially with "I'm on a tight budget", it's really a no-brainer.

 

That's a heck of a trade in value. If you can get one at MSRP or lower, go for it!

 

If you really want to settle it one way or the other, I say consider TCO. The current car is worth $10,500. How much will it be worth in 5-10 years? KBB says a '99 RAV4 with 125,000 miles on it will trade for about $4k if in excellent condition. Do you expect to be in that trade-in situation in five years? That's depreciation of the asset and money lost. How much on gas? How much on insurance? Maintenance? etc. Now do the same for the Prius, and include interest on a loan. Try to be realistic.

Being able to afford the payments and takes precedence over all of that, of course. As does the Prius being a better fit for you than the RAV4.

 

I'm not willing to pay the higher up front price needed to get a sub-inflation finance rate.

 

KBB says if you drive your car another 26,000 miles over two years, the value of it will only drop by $1,650, but realistically it may be $2,000 - $2,500
26,000 miles @ 22 MPG = 1182 gallons gas
1182 gallons gas @ 4.50 per gallon (assuming it goes up and stays there) = $5318
Assuming your car is paid off, there are no interest payments.
DEPR + Gas = 2000 + 5318 = $7318


New Prius, $24,500
Prius, 26,000 miles valued @ $19,000 - $21,500 (give or take)
So DEPR is about $4,250 but don't be surprised if it's like $5000-$6000
Add sales tax & registration you will pay upon purchasing a new car, and you don't get this money back ever. This will be about $2000.
26,000 miles @ 50 mpg = 520 gallons
520 gallons @ 4.50 per gallon = $2340
Interest on, or time value of $26,500 less $10,500 @ 2% x 2 years = $650 (about)
DEPR + GAS + INT + TAX + REG = $9240

You may want to amortize the sales tax and new vehicle registration over more years (I did it over two).

I've ignored registration renewal, insurance, maintenance, etc. I mean my examples above are far from complete or perhaps not accurate. Fudge it anyway you want to give yourself what you want to see, after all it is your decision.

I think residuals on Prius two, 36k leases are around $16k - $17k? I don't know, someone else may know better.

 

Pay off your car first.. drive it until it you can pay for a new car without any burden on your shoulder. Many people want to "squeeze" the payment and justify that they need a new car. Of course who doesnt want a new car.

But seems like your Rav4 has lots of life. Remember even if you are filling up more, annually, a new car will cost you more than you save on gas (plus insurance etc)

That Rav4 will run until 150k-200k miles with minor maintenance.

 

If you weren't in such a tight budget, I'd say go for it, but as everyone else on here is saying, since your car is already paid for, ask yourself: "Do I want to be stuck with a 36-60 month loan?". I know with moving comes new expenses. Where are you moving to btw if you don't mind me asking?

 

Another question that you have to ask yourself is:
"How many miles am I going to be driving per month once I get to the left coast?"

The miles on your mini-ute thus far indicate that you didn't drive much per month. If this changes drastically, then so will the TCO of a new car versus a paid-for one.

I still prefer owning a vehicle to having to cut a check every month...but I can afford to. My daily commute is 9.something miles.

You also have to make an educated guestimate as to your employment security. Getting laid off three months after trading a paid-for car to "save" money in your monthly expenses can look pretty foolish when somebody comes to repossess your new G3.

These are competing scenarios to be sure...and in the end you're the one who has to make the call.

Good Luck!
All the best!!