Our Toyota is such a great car but we need something bigger. Monthly payments need to stay below $450 (firm, within a few dollars); we would be more comfortable in the vicinity of $400. The Toyota is paid in full, gets awesome mileage, low insurance and never needs repairs but it is a '95 with cosmetic damage and would be of more value to us as a second car than a trade in. I am prepared to take a hit on interest rates, but I am firm that our obligation can go no more than five years. I've been doing tons of reading and I think we have three basic options.
1) Buy used. I've found a 2003 Dodge Durango (VIN 1D4HR48Z23F611476). It is light almond, automatic, cd player, gray cloth interior with 13,600 miles and a decent bit of warranty left. Saleswoman says it has never been purchased and was used by dealers for driving to other dealerships, so is considered a used car even without a previous owner. Sticker says $21,900, saleswoman offered to put me into it for $18k with no down and no trade on a loan of five years or less, tow package thrown in for good measure. I stand a good chance of talking the price down more (but not much more; I'm thinking $17,500 with TT&F included).
This is the best option but, to be frank, I'm not sure we could get the loan. Banks shy away from financing a used car that may not give them the collateral they need, and we don't have the ultra-prime credit scores or massive down payment to guarantee the loan.
2) Lease new. Our choice on this would be a Dodge Grand Caravan with as few options as possible. Financially unwise, as it would give us no tangible asset for our money, but it would repair our credit while still giving us a bigger primary vehicle at a lower monthly cost than purchasing. The minivan also has lower insurance rates than the Durango.
3) Buy new. This would be another Toyota Corolla, again with as few options as possible. Cheaper to buy and operate than a large SUV or minivan, which puts it in our price range, and easier to finance than a used car. The trade-off is that we would have to resign ourselves to never going anywhere in one vehicle. That could be troublesome. Worst possible scenario, this one.
Well, what say you?



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