True Cost to own - more than just fuel

Couple thoughts - first, I see you're good with numbers - in your situation, you probably have to be. Good job on that. But I'm not sure why you think your mortgage payment would double? $1600/month is pretty high for the house you have, either you didn't qualify for a good rate, rates were higher when you bought the house and you never refinanced, or you went for a short-term loan. I would think, and I haven't run the numbers, but for that price you should be able to get a loan for about $120K at 30 years at 5% fixed? There's calculators out there that will do this for you, but I bet you won't spend as much as you think.

Having a couple credit cards actually boosts your credit rating. Just do like my wife and I and always pay in full every month - having available, unused credit on a small number of cards shows that you can handle credit, gives you a good credit score (ours are about 800) and that gives you the good low rates for the big purchases - mortgage and car. We just don't think of credit cards as paying with money we don't have, but as a way to bundle the purchases into a month-end payment. One advantage of CC over debit cards is that if the debit card is compromised, a thief can pull money directly out of your bank statement, then you bounce checks, etc. With a credit card, there's that buffer where you can resolve the issue with the company before you get hit with any fees.

You want to make sure the area you're moving to has other job options in the area, or you might find yourself in the same situation with a long commute a couple years from now. I'd rather not live in the Chicago area, but it's great for jobs, definitely not a 1-company town.

I agree with doing the house purchase first, then the car purchase when you know the rest of your finances a little better. Since the van handles the family trips, I'm not sure if you really need a 2nd vehicle that tows, but you might want to consider a used Ford Explorer Hybrid as well. That's at least rated for 1000 pounds towing (or better, I don't remember). I doubt you'll see many, if any, Prius v at auctions in the near future, they're just too new and not out in big numbers yet.

And finally - why the heck would an 11-year-old need a baby-sitter? They can take care of themselves at that age. Definitely by age 12. Just keep your cell-phone handy in case something big happens, but the two oldest kids should already know what to do for most emergencies anyway.

 

I would not assume that 2013 and 2014 will be as good as 2012. I want to make sure I will be ready for the bump...

 

OP is quite right used car values are high now, so high that for me they aren't attractive and it's a major reason my last car purchase was new, after spending many years preaching the benefits of buying used late-model. It really just doesn't make a lot of sense now. I regularly go to my local toyota and nissan dealership sites, hit up the "weekly ad" and see the deals they are offering on some cars. If I had to buy another car now, even if money was tight, I'd lease a new one. There are a ton of cars now available at $200/month new with just the basic closing fees due at signing. No maintenance on those, nothing to worry about. Contrast, $200/month on a 5 year note on a used car translates to around $10,000 car.

 

I don't think you missed anything, but I'll offer another bit of data.

From the thoughts, it comes down, almost to the exact amount, of do you want to get a new depreciating debt on a new car, or do you want to get a new potentially appreciating debt on a new (to you at least) house. Thankfully it seems you have the first part of the equation correct.

But, it seems you want to add a second part. Both. I just can't see any reason for it. Keep the cars longer than 5 years. If the blazer is in OK shape, which I inferred wasn't the case, you can either keep it or sell it in the higher used car market, and use the sale price with your dad at the auto auction to get probably a better vehicle with higher mpg. Will it be a regular Prius? That's the gamble.

If your wife goes back to work to start paying for Both, in the long run, with taxes, child care, and more driving for her, what will she really be making? Will it even come out higher than minimum wage after you pay for child care for three children? And you're right, I would NEVER leave a 7-month-old child with anybody. The money is quickly gone, your child is with you always. Thankfully it seems you and your wife have a good focus. A long-range plan might be to wait until the child is in preschool, then start thinking about going back to work part-time. After several years of living even more frugally than you are now, it will be much easier to be saving for any unknown emergency expenses.

Ultimately, I see it as freedom to choose vs. being indebted to a new car, even a new very high mpg car.

 

Yea, too many variables right now to give you a good answer. Even though I am only a 10 mile commute for myself, I went with the Prius v to lessen the bite of the pump as prices go up and simply because my poor old Senta is going to be more of a hole than an investment with things slowly breaking down and not having a mechanic in the family. Car did a lot for me, but the Prius v is good for what I want and allows me to be versatile as an IT type person with the car out of the major IT guys in my location.

 

I agree, the used market rates seem to be inflated these days. I never did look into what's driving that, I'm curious though... It seems that prices would be lower with a slow economy. :/ When I was shopping last year, the *deals* on used car pricing looked as though prices were commensurate with new car pricing broken down by mileage or year. Idk, maybe that's how it has always been(?), but it didn't make sense to me to buy a car at the same basic annual rate (if you will), but with a shorter useful life, without knowing [ultimately] where the car has been/put through, and will have missed out on the prime years of the car when it is virtually trouble-free and in mint condition.

I recommended a used anyway, because in the immediate, the "deals" out there are still less cash out-of-pocket and you seemed more strapped for cash and as though you were new at your current job (at least I got that impression). It's obviously best to purchase with the future in mind and pay the least out-of-pocket over the life of the car, but this seemed like a case where it was necessary to make the decision based on current cash-flow and the immediate situation in order to buy time and stabilize.

 

I did the math on a reg Prius lease. Here, the special is $279/mo plus $2k down. This adds almost $18k to the price I paid for my car.

 

You are right, leasing is always more expensive than buying. Don't go that route if you want to cut cost.

I think you don't want to keep a truck just for occasional towing needs. You can hire someone who has a truck to tow for you twice a year, financed by the money you save on gas everyday.

 

#1 priority is will your family be happier moving. Not you due to your commute, but your family.

If so, then #2 priority is finding some way, some how to scrape some more $ together for the home downpayment. Can she work a day a weekend somewhere while you cover for her? Can you work another part-time gig somewhere? Do this with a specific time and savings # in mind till you have it, then quit once you meet the goal. Yes, rates and house prices may go up, but your mission is to build equity and to have a cash cushion before you move. Else, being house poor sucks.

#3, IF a used Prius or better yet Civic can pay for itself in gas savings per month with no out of pocket, do it. 200K on a Blazer is enough. Your safety and being the bread winner are too important to risk something major happening on a long commute.