What should I do?

Driving a Prius cross-country instead of the Rav4 would save about 100 gallons of gas, or about $400. How much car can you buy for $400?

Keep the Rav4 until it is paid for and you have saved enough to buy your next car for cash. If you do, five years from now you will be ahead by thousands of dollars. Yes, that is not nearly as exciting as buying a new car.

 

Hello, welcome aboard! Hmm, I think I would stick with what you got all things considered. It is paid for and gets OK FE. I think it will be quite a while be for anyone sees incentives on a Prius.

 

That's good! Now, keep it until you've saved up the rest of the cash. Borrowing money to buy a new car is a mug's game.

 

Its not the worst yet, but the conditions for buying a Prius are headed downhill. Production has been slowed by the tsunami damage and gas pricing are headed for a record high. You know what economics 101 says about rising demand and limited supply.
There is still inventory around the US though. If you find the right dealer you might be able to buy a car in inventory under MSRP. That is a lot harder than 2 months ago though.

 

I agree with Richard, keep the RAV4 until you can afford to pay cash for a new Prius. Don't be in to much of a hurry, this is a good time to own a Prius but it's not a good time to buy one.

Also you should consider selling the RAV4 yourself instead of trading. I have usually come out ahead when I sold my old car myself, but it can be a pain.

 

We have a 2007 RAV4 2.2 Diesel in the family that is now on around 32mpg. Think about the place you have in the car compared to the Prius. This is why we kept the RAV and got the Prius for my daily way to work and trips where not that much space is needed.

I personally would keep the RAV and try to increase mpg with other tires (or better inflation) as we see 2-3mpg more with good summer tires compared to the winter tires. Maybe also change the way you drive the RAV to enhance mpg further.

 

I agree. The Gen IV Prius will be even better and you can use this opportunity to save for a new one. It seems like your Rav4 has still got plenty of life left.

 

You don't have to have a Prius to post here...

 

I will be a bit of a devil's advocate and point out that interest rates are pretty low. Penfed has 2.49% right now. If you finance 15K for five years at that rate, you still pay less than $1000 in interest over five years. Just an FYI. I wouldn't take the trip into consideration, you need to take a longer view than that when purchasing a car.

 

I agree with the others. Getting a new G3 in the next year will be a little tougher financially....but maybe not as unwise as increasing your personal debt load.
Depending on how many miles you drive per day, a paid-for 25MPG vehicle may make a lot more sense financially than popping for a $26,000 new vehicle, or getting a used vehicle with an uncertain maintenance history.
With your trade-in, you're looking at about $350 in notes, presuming you have good credit and buy a fairly base model G3. (Also) presuming that your insurance, and your taxes are not dramatically altered by your new car, you'll have to decide if your fuel savings will cancel out the car payment, and (more importantly) whether or not you want to add some 18K to your debt load. They can't take the RAV4 away from you if you loose your job, or some other financial or other calamity strikes. YOU own it.

If you're tinkering with buying a house.....and this is an excellent time to do so...18K might affect that process---depending on your financial depth band.

Keep reading and posting in PC. You're an accident or other incident away from looking for another car. The more you know about G3s, the more you will be able to tell whether or not the car will suit you on a daily basis.
Also.....before you pull the trigger on a new G3, rent one for a weekend. Priuses are great cars, but there are certain items in the Prius driving experience that should be fully explored before you decide to drive one on a daily basis.

Good Luck!!!

 

If you have to ask...

I kind of think purchasing a car should fall in to basically two categories. The purchase you make because you have to....car totalled in wreck, stolen, broke down beyond sensible repair, aging beyond economic viability or wisdom....OR....The purchase you make because you want to...

Since you have an operational vehicle, I put yours more in the 2nd category. If that's the case, then I also believe you should have no doubts. It's a big purchase, and if you are going to make it, you should be happy to make it...so IMO, if you have to ask? Then it's a sign you might be better served putting it off...

This generally isn't the best time to purchase a Prius....it's a REAL GOOD time to have one, but with a dwindling supply and growing demand...well you've heard it before. Who know's what the future will hold? I'd expect Japan's recovery to progress, and issues of production and supply to slowly return to normal. A year from now will we be able to even think of Gas closer to $3.00 a gallon or gas $4.00 a gallon or more?

In anycase, my optimism would be that the future might hold a better time to be a purchaser. But maybe not...you never know. Even if production capabilities return, IF gas breaks through the $4.00 a gallon mark, and heads toward the $5.00 a gallon mark, suddenly Prius are going to become extremely desirable.

Ultimately, one can build arguements for purchasing, or not purchasing, it's always a choice. But I think if you're asking...I'm not 100% sure, help me validate this decision or desire...then I'd just wait. Spend a weekend cleaning up the Rav-4 for the road trip, making it look nice and new...you'll probably feel better about keeping it...

 

I was offered 0.9% financing on a new car. Are you quite sure inflation will be lower than that for the next five years?

 

Gen II are nice, the improvements to Gen III are mostly minor (or techno-gadgets that you don't need).

How much driving will you be doing? From that, calculate cost per month for both your Rav4, and a Prius. That should help you decide.

 

Every deal I've ever negotiated with a car dealer (somewhere between 20 and 30) always came out better with my walking into the dealership with a pre-approved loan from a credit union.
Dealerships often offer 0.0 or similar interest rates in lieu of a cash rebate...and I've always been able to haggle out a better cash price without dealing with the incentives---either interest or cash back.

After a purchase order has been signed I always offer the finance manager a chance to beat my pre-approved rate by a quarter point, (they never have) since the 0.25-percent discount from any loan you get from the dealer will leave your mailbox choked to the gills with all manner of spam offers.

If you have a marginal credit rating....well, you shouldn't be buying a new car in the first place, but the dealerships will be happy to "help" you qualify for the "free" or "reduced rate" loan with all manner of paper gymnastics.....and then there is your trade.
Trading a vehicle in is a loosing game for anyone but the dealer. Nuff said.

Both of my paid-for vehicles are 06's. One gets 22-MPG, and the other gets between 33 and 35. Gas is going to have to get STUPIDLY expensive for me to sell them for a vehicle that still burns gas----albeit at a much thriftier rate.
If I loose my job, I can canx the comp and collision, and still drive to look for my next job without having to worry about some bank.

Getting 50-MPG feels good.
No car payments can feel better....unless you're one of those pour souls that have to drive stoopid distances to work

 

I am not, of course. I am certain that the dealer and the bank always make a profit on the deal, and one way or another the buyer pays for it. They don't give away loans for free.

 

Interesting, I've actually had the dealership beat the rates that I had from my bank, which were some of the lowest I could find. They beat by at least .25% when I got my Prius in June 2009 and the Harley dealership beat by almost a full 1% a year ago. Still wasn't AS good as the 0% or 2.9% rates that they always advertise, but I don't think most people ever get those anyway.