[USER]

Hi, I’m 38 years old. Single. No pets. Live alone. Only debt is low interest mortgage. Living in SoCal.

Total monthly expenses are around $3.5K. Monthly take home pay is $12K W2 income (not business income).

Net worth: $1.2M
I’m writing this to seek input on my situation. An act of God wrecked my car yesterday during a weather event.

The car has structural issues for repair and it will likely be totaled. The insurance is likely to give me a check of around $3K.

I had bought the car in 2018 for $10K. And I’ve not had a car payment for the last 8 years.

My dad who is comfortably retired has offered to give me $25K to use towards a new car. But i don’t feel like accepting money from him since i make enough of my own.

My heart “wants” a new car that might cost $42K. But my “mind” is telling me that I should buy something cheaper and “used” as opposed to new due to the initial heavy depreciation on a new vehicle. I also feel guilty about dumping $40K+ on a new car.

I have 3 questions.
1) Should I accept the offer from my dad and buy the vehicle outright?

2) Should I buy a new car?

3) Or should I buy a used car and invest the difference for the long term?

Appreciate your time and input or ideas on how to go about this.

Thanks.

[Frank]

Take the money from Dad, but not all of it. Maybe 15K. You can buy a nice used car for that plus the 3k.

Then pay him back when you can.
There is no reason that this incident should prompt you to buy a new car for 40K+.

That makes no sense whatsoever, because if you could afford to do that, you would already have the money saved.

God is not telling you to buy an expensive new car.

[Jon]

Net worth 1.2m at 38.
What’s your end goal?

You can definitely afford a new car. You need to find balance. No point of saving up to 10 million just to die.

You can start enjoying life now

[Diane]

Can you find what your heart wants lightly preowned? Split the difference and enjoy it for a lower cost.

Agree with letting parents help.

[Laura]

SoCal is a great place to own an EV, esp if you add solar to your home. With the $7500 federal rebate and carpool stickers thru DMV, it’s a good time to buy one.

The federal credit will likely go away very soon.

There are some great deals out there on new EVs.

The lack of required maintenance and cheap electricity will make up for the price of the car over time.

[Jay]

Just buy the car you want. You are already at FI. Accept your dad’s money if you know they are fine and pay for the rest.

Don’t need to be a financial miser.

[Jacquie]

We just bought a 2023 VW id.4 EV for $20k. Certified pre owned with a 4-year warranty, 7k miles. There’s no need to buy a brand new car.

Get something gently used.

We still have auto cruise control, Lane keeper, blind spot monitor and it’s an EV!

[Melissa]

Can’t you buy the car model you want used? Let your Dad help, parents love to help their kids.

[Leslie]

They say give with a warm heart not a cold hand so take the money and tell him thank you!

[Sean]

If your dad is a multimillionaire, sure accept it, if not no.
You’re basically at FI, assuming the majority of your networth is outside of home equity, even if it’s not you save 70% of takehome pay you’ll be FI within a few years regardless.

Just buy whatever car you want it will have no material impact on your life.

Assuming you’re talking in the mid 5 figures as mentioned.

[Nancy]

I know Cali numbers are different than my world – does dad know the ball park of your net worth? Or does he think you “need this” to get by?

Were you considering a newer car before yesterday?
Sounds like you could buy the 41k car in 7 months?

Is the car a “need?” Nope. But it’s also your life and how you choose to live.

Yet I wouldn’t take dads money for it – unless he’s realized he has Way too much himself and this just prompted him to share when he was also already considering it

Maybe rent a new car for a couple weeks and see how it “feels”? Then is it a true want? Or “that was fun, I don’t need it”

[Caroline]

I vote you go for the new car! (And I am not a car person – I have not owned one since 1994.).

Reason for my vote is that you appear to be level-headed (see accumulated 1.2M net worth by 38 years old) and this sounds like you don’t splurge much.

Nothing wrong with being really good to yourself (or even foolish) with this type of purchase every once a long while.

[Mary]

I wouldnt take money from Dad. If you want a new car, buy it. At least you’ll have no repair costs for years, since it has a warranty.

Drive it till it dies.

[Ann]

I would take the $25k from Dad and the $3k from insurance and put it toward the $42k car that you want.

First off, $42k isn’t over-the-top to spend on a car. You’ll only have to shell out $14k to buy it outright and you’ll theoretically save (at least a little) on future repairs have purchased new rather than cheap/used.

Second, I bet your Dad would love to give you that $25k now rather than in an inheritance when he’s no longer around.

Third, you’re doing amazing financially.

Yes, we all want to avoid lifestyle creep, but just be sure to continue to express gratitude (to your Dad, yourself, etc) for your amazing car for many years and avoid taking it for granted after the first month.

You have many good options here, I’m excited for you!

[Aura]

Accepting the money is something that would be dependent on how impactful it would be for my parent. If he has the money and wants to give it as a gift, I would say yes.

I would also buy a new car and then keep it forever if that is the car I wanted.

My husband and I have bought 5 new cars and kept 4 of them for an average of 16years.

The cost of the cars was worth it to use because they fit our needs. The minivans were awesome when we had two kids.

The Bolt and the CRV are awesome now.

Only you can say whether that car is worth the cost, but trying to talk yourself out of a new car because it will cost more is not necessarily the right answer.

Are you going to love that cheaper car just as much? Will you be able to do all the things you want to do in the cheaper car?

[Rick]

Dad give expect their kids to accept graciously.
I feel the middle ground is to accept part of his money.

You part of your money. Buy a nice responsible used vehicle.

And, if he is in the area, pick him up for breakfast which you buy and gush over the vehicle.

[Melissa]

I would buy the car and pay cash, preferably the car you want that’s lightly used. Sounds like you should be able to pay cash.

If your money is tied up take the loan from dad and pay back ASAP.

You have a lot of leeway in your monthly take home.

[Mary]

New car or very slightly used car that you love. I just recently bought a 40k used car and don’t have near the income or net worth you do, and I don’t regret it one bit.

[Audrey]

Buy the car that makes you happy but don’t take the money from your dad. Look into a 3 year old used car (truecar com) and compare.

But, you make enough and are financially stable enough to vuy a car that you enjoy.

[Joel]

Given your income, expenses and current savings, I probably wouldn’t balk too much at buying a new car, as long as it’s not extravagant.

If your expenses are realistic, your savings are right at your FIRE number.

About the only addional things you probably would need to account for are health costs as you get older, additional travel and entertainment and maybe an expectation of lifestyle creep or maybe marriage and a family.

A few more years of savings and growth will likely cover even that.

[Sarah]

Take the money from Dad or take what you need to buy a car coming off a 3 year lease.

These cars are basically brand new, already taken a big depression and have been dealer maintained, low miles.

It’s the best way to get a new to you car and feel like it’s brand new with out the price tag!

[Author]

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