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test drove a car today

February 3rd, 2012 at 02:38 am

I like the 2007 Toyota Prius, but for all my bleating about paying for a car in cash, I learned that I have to pay County Tax (9.5%), and the insurance is nearly double what I pay on my POS car. So not 100% "I'm paying in cash!" but closer to 85% "I'm paying in cash!" and 15% financing.

DH and I are haggling -- he wants to use the home equity line of credit for the financing at 3.0%, and I want to use the personal line of credit at 8.9%, because I don't want to lose the tax deduction of interest on a home improvement, which is all I use the HELOC for. This expenditure is going to hurt a lot at first, but if we have it for 14 years like we've had the POS, we stand a better chance of withstanding the eventual $10/gallon fuel.

Maintenance and fuel for the vehicle will put me ahead by $90, and if I don't factor the insurance into it I would pay $540 less than what I do for the POS car.

Someone else has come by to look at it and drive it, and is taking a second look on Saturday. I am going to sleep on it, and offer $14520. My spouse is okay with the car. The Prius is much more technologically sophisticated than our car, and has more than we need for getting from point A to point B. But finding one at Kelley Blue Book value or under with under 45000 miles in Seattle is like finding a unicorn.

Off to run a CARFAX report.

7 Responses to “test drove a car today”

  1. Maismom Says:
    1328243496

    I have a Prius and loving it. I drive a lot, so it saves me so much gas money.

  2. Petunia 100 Says:
    1328245182

    Why do you say you would lose the ability to deduct the interest on your Heloc? There is no IRS rule about what the money is used for. Am I missing something?

  3. PauletteGoddard Says:
    1328246484

    Maybe I'm missing something. I thought I'd read that the interest on a home equity line of credit was deductible only for home improvement/maintenance. Twenty years ago credit card interest was deductible: making a home equity line of credit's paid interest tax-deductible seems to be the same thing as tax-deductible credit card interest, so I thought maybe whatever interest didn't count anymore on the 1040.

  4. Petunia 100 Says:
    1328248103

    Nope, you can spend it any old way your heart desires. Smile
    You are limited to the interest on 100k of home equity debt.

  5. My English Castle Says:
    1328282755

    Ooooh--what fun! Of course we need to know color?!

  6. PauletteGoddard Says:
    1328284718

    @My English Castle: charcoal. So coal I think of DH Lawrence when I see it.
    I'm hesitant about owing. If neither I nor the other person interested buys it at $14700 it'll be priced at $16200 next week in a new car ad. Maybe I'll just put the sales tax and insurance on the credit card and pay cash for the car to maintain principle purity.

  7. Jerry Says:
    1328301474

    Sounds like a gem, especially with low miles... and the insurance costs can't really be helped, alas. I would love to have a Prius when we come back to the States. Let us know the result that leads from "sleeping on it!" (Nice of them to let you sleep on their car, too, I have to say...) Wink Jerry

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