Edit: Car repairs cost ~$400. Still a major expense but it’s lower than the initial $500 estimate. I am grateful.
Two words: car repair.
My trusted mechanic had informed me of this expense a couple months ago, so while I’m not panicked about this expense, it’s still a big chunk of change. This repair isn’t urgent, so I can probably put it off for a couple of months, but I know that it’s important to take care of my car properly.
At least this bout of repairs will get me into 2009.
This repair, however, does raise the question:
1. At what point should I consider buying another car? The KKB value of my current vehicle is at around $3,500-$4,000. In my first year of ownership, I’ve spent over $1,000 (or 1/3 to 1/4 of the car’s value) on repairs and routine maintenance. I won’t buy a new car as long as this one continues to run reliably. After all, Mom is driving a 1993 Civic with no air conditioning (granted, she never takes it on the freeway). I’m not as frugal as Mom, but still.
2. Should I continue to pay for collision and comprehensive coverage (with a $1,000 deductible) on this car? By only having liability insurance, I can save around $500 a year.
So much to think about.
Non-car-related tip: Sephora is having their Annual Friends & Family Sale online, where you can get 20% off everything by using the code FF2008. Unfortunately, today’s the last day. So hurry if you have something you wanted from the Mecca of All Beauty Products. Hat tip to C.C.
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god forbid the day comes when you have the accident and its worse than you can ever imagine. the speeds with which we fly around busy streets in LA can cause the worst of damage. i would keep both C & C coverages. just sayin.
thanks for the code! i’ve been needing new moisturizer and cleanser for awhile now, but had some trouble biting the bullet to buy it. But you can’t argue with 20% off!
good luck with the car stuff! I know next to nothing about car insurance so I’m of no help in that department
You’re better off keeping your insurance the way it is. They will find any way to screw you over once you get into an accident. Dealing with their crap right now – and I have the highest possible coverage!
I shelled out $1,300 the other week to get my car fixed. Well, it wasn’t dead. But the engine malfunction light came on and I realized i’d better take it in quick before something really gets ruined. I need my car to last for at least another year!
Another more fun way is to buy too many necklaces on Etsy….
I agree. Keep insurance the way you have it now, and just think of getting another car…
Here’s a good article about when to get rid of C&C insurance.
http://articles.moneycentral.msn.com/Insurance/InsureYourCar/DumpTheInsuranceOnYourClunker.aspx?page=all
I just got rid of mine (fingers crossed) and I’m putting the money saved — plus a little extra each month — toward the purchase of a new car when/if mine is damaged or goes kaput.
I think you should drop the C&C coverage.
Realistically, if you totaled your car, you won’t get KBB back from the insurance company. You’ll get much closer to the trade-in than the private party value. I think you’d only get about $2500 paid out if the car was totaled right now, and that will keep declining.
$500/year is a lot to pay for about $2500 worth of financial protection if you get into an accident.
You’ve got more than enough in your emergency fund to cover a new-to-you used car or a hefty down payment on a nice new one. Insurance is only meant to protect you from the financial storms you can’t cover yourself. Take the $500/year out of the insurance bill and put it into a car replacement fund.
As for when you should replace your car: when you’re living somewhere with a driveway or when the current car is dead. Or when you get a full scholarship for your MBA
I had just finally caved and spent $800 fixing a non-mechanical problem with my front end, when the very next day somebody had put a couple dings in the bumper because he couldn’t parallel park. I can’t imagine if that had been a $10K or $15K new-to-me purchase!!! Remembering that I park on-street keeps my new car urges at bay!
I would keep the insurance. You just never know and better to be safe than sorry. I just shelled out about 600 dollars to fix a couple belts and the starter in my car. But I don’t have a car payment so I kinda feel in a sense lucky that this is my first major expense since buying it over a year ago from a friend. Maybe you should think about a new car but it boils down to if you want a car payment or not.
XoXo
Serendipity
I talked to my insurance agent today. They use the NADA value, not Kelley Blue Book, to determine payouts if you’re in an accident. That’s the $ amount to use if you’re paying more than 10% premium-to-payout ratio that’s mentioned in the MSN article Kerri linked.
I think you should drop the collision too. I should say that I also think I should drop MY collision coverage, but I don’t. It makes me feel better to have it since I don’t really want to buy a new car for about a year (or more).
But I’d keep comprehensive, no matter what. It’s pretty cheap ($30-$50??), and covers theft and such.