Jul 1, 2008
The Law of Murphy
Murphy has come to visit us. Now according to Dave Ramsey, Murphy is supposed to come when you're doing the wrong thing and get you into worse trouble. I thought we were on the road to greatness, but right now we're not really on the road....more off the road and in the hands of an auto repair shop.
Long story short, our Honda Accord died last Thursday. Apparently coolant was not circulating, causing the engine to overheat and either the pistons fused or head cracked. The final decision is that we need a new engine, which so far, on one estimate will run $2500 to $3000. The pessimistic side of things is that we may end up replacing the engine, only to need more major repairs in the next 1-2 years because the car already has about 160K miles on it. I have looked online and found other '96 Accords selling for approx. $3500 to 3900.
So, Brian and I need advice. This is a real WWYD situation. And if your advice is to go out and finance a replacement car, then I ask that you give that advice behind my back, because I'm looking for advice that aligns with our core principles regarding debt. We could come up with close to 5K by the end of July (which would deplete our emergency fund).
So, as I see it, our options are to:
1) Repair our car, figuring this is an Accord and a good car for the most part. Do a good job saving money over the next 1-2 years and plan to replace it with something from this decade before we have another major repair. Also, this may be a good plan knowing that Honda's do not depreciate in value so rapidly, so we may be able to still sell this car in two years for about $2500 (if the rust doesn't have its way).
2) Scrap the car and use our $4-5,000 savings to pick up a '99 or '00 Accord or Civic with a bit less miles and rust. Again, save for a newer car over the next few years, but feel less urgency.
3) Pick up a different used car, other than a Honda, since Honda's are generally expensive. Our main goals are to find something with good gas mileage and fairly trustworthy. If we're only going to have it for a few years, the hope would be we wouldn't have it long enough to run in to major repairs. But then again, it's always a gamble with a used vehicle, so I would want to get something for a good price so that I wouldn't feel too bad if I had to put a few hundred into repairs over the next 1-2 years.