Add to retirement or save for a car?

[dmhanson511]

Diagram is of my current annual budget.

I am a 44-year old electrical apprentice, currently making just shy of $30/hour in a HCOL city. All of my medical benefits and retirement are paid by my employer. I value good food and travel, so those budget categories skew high.

I lost all of my (admittedly meager) retirement funds in a divorce. I'm due for a $2.48/hr raise in May and am considering whether I want to put $2/hr into an un-matched employer-provided 401K. Going forward, I would add another $2/hour with each raise (they come 3x/yr) until I have maxed out allowable contribution. This would be on top of the 3 pension funds that my employer pays for. On the other hand, I could also use that raise to increase the amount saved toward emergencies, and I will be needing to replace my car in the next couple years.

Thoughts?

https://preview.redd.it/2tgasoi3tjr...bp&s=b48c789341f35d607f74fe7f6b14c78f778b2451

 

[ladydenise226]

@dmhanson511 Info: how much do you currently have in retirement? What type of car are you looking at and how much are you considering spending?

 

[dmhanson511]

@ladydenise226 I currently have just shy of $20K in pension accounts. I plan to replace my 2010 Prius with another Prius or maybe a RAV4 in the $10K-20K range, preferably in cash as I have no interest in a monthly car payment.

 

[almagor]

@dmhanson511 I love my besties RAV4 so much. I'm in the market for another car in the next year and I'm so torn on one lol. It's over 30k tho, which kills me to think about.

 

[koval]

@dmhanson511 Evaluate the true need for the car replacement very strictly. Remember that it is absolutely possible to find a reliable, fuel-efficient, and even fun used car for under $9,000. Definitely prioritize the retirement savings; you’ll thank yourself later.

 

[andrewk292]

@koval A reliable car for under $9,000? That seems like a real stretch in this used car market. That would maybe get me a 2001 Buick La Sabre with 200,000 miles.

 

[koval]

@andrewk292 Then you’re not looking hard enough. 6cyl Subaru Outbacks, Mazda Miatas (NC), most generations of civic and Corolla, etc etc. All plentiful and easy to find within that price range - and even with high mileage, all are capable of 300k+ with proper maintenance. Drop another $350 on a head unit and any one of those can have wireless Bluetooth audio + CarPlay as well.

 

[andrewk292]

@koval Just checked out some of those options where I’m located. The cheapest were a 2004 Miata, a 2013 Outback, a 2015 civic, and a 2015 Corolla. Even at the cheapest, not a single listed at or under $9,000. I also have a dealership down the street. The absolute cheapest vehicle they even have on the lot is $13,000.

My partner literally just traded in his 2012 Corolla with well over 100,000 miles and the dealership gave him $10,000. Wasn’t even in great condition. Had a few dents, scrapes, and other paint damage. If that’s the trade in price, imagine how much they marked it up. The used car market is awful right now.

 

[koval]

@andrewk292 Then you live in the middle of nowhere, or don’t know how to search for cars. I’m thinking the latter - because you should be able to find a Civic older than 9 years old if you’re anywhere that isn’t Antarctica or low-earth orbit. Where I am I found half a dozen of each that I mentioned in 5 minutes of searching - and that’s only counting the clean, non-ruined ones.

Also why are you limiting it to dealerships? Private party sales do exist - and the multiple cars I’ve purchased/sold private party (all for under $7,000 by the way, and three of those within the past 3 years) have been great.

 

[jesuslighthouse]

@koval Buying older used Honda/Toyotas is good advice. Just be be prepared though used cars are so different now.

If you can find that one owner 155k mile car with records GREAT.

Over half the cars I see on FB are rebuilt, lot people still wanting over 20k for 10 year old Hondas/Toyota.

Just know any (basically any 99.99%) of any car under 9k, will need 2-3k dropped in to the thing.

Most civics I see here that are around 6k usually have over 200k miles. If you keep looking you can find 140-150k I'm going to be they never changed the plugs, transmission fluid, tie rods etc.