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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.

Posted in untamed budget, jaunts and jollities | 6 Comments »

6 Responses to “test drove a car today”

  1. Maismom Says:
    February 3rd, 2012 at 04:31 am 1328243496
    1328243496

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

  2. Petunia 100 Says:
    February 3rd, 2012 at 04:59 am 1328245182
    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:
    February 3rd, 2012 at 05:21 am 1328246484
    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:
    February 3rd, 2012 at 05:48 am 1328248103
    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:
    February 3rd, 2012 at 03:25 pm 1328282755
    1328282755

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

  6. PauletteGoddard Says:
    February 3rd, 2012 at 03:58 pm 1328284718
    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.

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