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    Thread: Paging all Financial Loungers

    1. Member mk2_dub's Avatar
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      08-07-2012 09:36 AM #1
      I know this has been asked here several times, but I'm hoping my situation will be different...

      I'm currently driving an '05 Infiniti G35x and I was thinking of getting rid of it (selling it to my mother) in the fall and picking up an 07+ Chevy Tahoe.

      My reasoning for this is because in the next few years, I'll be popping the question and hopefully having some kids. My original train of thought was that if I get the truck out of the way with, it's one less expense to manage once we are married and have kids.

      My friend who works at a bank was telling me that it's a bad idea and that I should just drive the G35 into the ground, because with a $20k car loan, I would be unable to get a mortgage for anything over $360k.

      In the next few years, I will be planning to buy a house with the wife, and we both make pretty decent coin (she's a business manager at a BMW dealer, and I'm an underwriter for an insurance company), so I figure we should be alright.

      Any input?

      I'm an acquired taste, if you don't like me... acquire some taste.

    2. 08-07-2012 09:38 AM #2
      That would depend on many factors. Your credit history, savings, income, etc.

    3. Member zhenya00's Avatar
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      08-07-2012 09:39 AM #3
      I see no point in purchasing a vehicle now with the thought that it might suit your needs a few years from now. There are a lot of steps between where you are now and having a couple of kids. What vehicle you'll own then is the least of your concerns.
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    4. Member caj1's Avatar
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      08-07-2012 09:42 AM #4
      What if you're infertile? Maybe a Forester is a better choice.

    5. Member Dr. Woo's Avatar
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      08-07-2012 09:45 AM #5
      If your G35 is paid off, then IMHO it's a no-brainer. Stick with it for now.

      You'd be far better-served taking the money out of your paycheck that would go towards this new truck and putting it in savings. Perhaps a short-term share certificate, which could serve as a down payment on a Tahoe (or one of the Lambda trucks, which seem to go for similarly low prices and get slightly better mileage).

      I don't know what house prices are like in Ontario, but $360k sure sounds like a hell of a lot of house.
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    6. Member ctrapeni's Avatar
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      08-07-2012 09:47 AM #6
      Why do you need a truck if you married and have kids? I have been married for over 10 years and have an 7 year daughter. Everything works just fine in my WRX.

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      08-07-2012 09:50 AM #7
      Quote Originally Posted by caj1 View Post
      What if you're a lesbian? Maybe a Forester is a better choice.

    8. 08-07-2012 09:52 AM #8
      I would drive that Infiniti into the ground. I mean, I'm saying, I would literary drive it until it no longer makes sense and you've put over 200k miles on it or whatever. I think you're best off starting off marriage with as little new or carry over debt as possible.

    9. Member mk2_dub's Avatar
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      08-07-2012 09:57 AM #9
      Quote Originally Posted by caj1 View Post
      What if you're infertile? Maybe a Forester is a better choice.
      Knock on wood...

      Quote Originally Posted by Dr. Woo View Post
      If your G35 is paid off, then IMHO it's a no-brainer. Stick with it for now.

      You'd be far better-served taking the money out of your paycheck that would go towards this new truck and putting it in savings. Perhaps a short-term share certificate, which could serve as a down payment on a Tahoe (or one of the Lambda trucks, which seem to go for similarly low prices and get slightly better mileage).

      I don't know what house prices are like in Ontario, but $360k sure sounds like a hell of a lot of house.
      At the moment, I have about $7k left owing on my G and my mom is going to give me $9k for it.

      $360k in Ontario will buy either an older fixer-upper or a newer townhouse/semi-detached.

      Quote Originally Posted by ctrapeni View Post
      Why do you need a truck if you married and have kids? I have been married for over 10 years and have an 7 year daughter. Everything works just fine in my WRX.
      Well to each their own. I personally find a small sedan to be too cramped for my liking and I can't bear the thought of having to put kids in the back of a tiny car. I want space for my kids, my dogs, my stuff.

      Glad to hear it works for you though.

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      08-07-2012 11:19 AM #10
      My $0.02....

      If you want to maximize the amount of house you can buy, hold onto your G35x and pay it off before you apply for your mortgage. If you have extra cash each month after paying it off, save it (for the house, your next car, emergency fund, whatever). Close the deal on your house, and don't worry about getting a Tahoe or whatever family-mobile until you need it (you'll probably have months of lead time on this).

      Basically, as long as your current car (the G) is in good working condition, I don't see the advantage of buying a larger, less fuel-efficient vehicle now because you think you'll need it in a few years. Plus, a few years from now, similar money will most likely buy you a 2010 Family Truckster instead of the 2007 model you'd get today.

      Cliffs: Keep your car and pay it off; save resulting extra cash; buy a house; buy a family hauler only when you need to haul a family.
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    11. Banned Tiny4cyl's Avatar
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      08-07-2012 11:23 AM #11

    12. 08-07-2012 11:37 AM #12
      Quote Originally Posted by Tiny4cyl View Post
      Oh my god, there's actually a show that attempts to tell people they can't afford all the **** they buy on credit? Amazing.

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      08-07-2012 11:53 AM #13
      Quote Originally Posted by ctrapeni View Post
      Why do you need a truck if you married and have kids?
      because america.

      edit... i see OP is in the arctic.
      now my slandering of SUV drivers doesnt work as well...

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      08-07-2012 12:01 PM #14
      IMHO, g35x is enough for marriage and kids, to start with. Tahoe will eat up gas and it will be much more expensive. if you are worried about transport when you have kids, wait till the wife gets pregnant first. then get a minivan or something. plus you cant save money by spending it on a higher loan.... that just aint right man!

    15. Member SVTDanny's Avatar
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      08-07-2012 12:11 PM #15
      A car payment will take a big toll on the mortgage you will get approved for.... remember, 28/36 - 28% of gross income = max house bills (Mortgage, insurance, taxes, PMI if applicable), 36% of gross income = max monthly obligations.

      Let's say gross monthly = $6000. That leaves you with $1680/mo for mortgage/taxes/insurance/PMI. If you have $800/mo worth of car payments, student loans, credit card payments, etc., then you subtract that from your 36% number which is $2160. $2160-$800 = $1360. If you're looking into buying a house, then you know that $300/mo difference adds up to a HUGE difference in terms of houses and pricing.

      If you're going to buy a house, pay off everything in sight first, and don't pick up any new debt. That would be my advice. It sound like you can wait on the Tahoe, anyway.

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      08-07-2012 12:19 PM #16
      Do you still have the QX4? Would the Tahoe replace both of your cars?

      I agree with the majority of other posts. Hold on to whatever you have for as long as possible and then buy the car you need as a husband and a parent when you actually need it. In the meantime take the money you would spend on the Tahoe and its gas bill and put it into a relatively liquid form of savings. You may want to look at a high yield CD (there aren't many right now), tax free government funds or high dividend stocks as an options for this extra money.

      Avoid taking on debt that is unnecessary.

    17. Member mk2_dub's Avatar
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      08-07-2012 12:25 PM #17
      Thanks for all the input everyone!

      I forgot to mention that gas isn't too much of a concern for me as I commute by train to work everyday and the train station is roughly 2km from my house.

      As well, one of the biggest reasons I'm looking to get out of the G is because I know that if I keep it, I'll end up spending money on it modifying it. I know that I just need to have more self-control, but it's just who I am.

      The reason I was looking at the Tahoe was kind of as a way out (not exactly mod-friendly without spending large $$$).

      G35x - $230/month car payment + $230/month insurance + $300/month for gas + $???/month for mods
      Tahoe - $300/month car payment + $150/month insurance + ~$300/month for gas

      I just figured I'd end up saving a few bucks. Maybe not though.

      I'm an acquired taste, if you don't like me... acquire some taste.

    18. Member mk2_dub's Avatar
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      08-07-2012 12:26 PM #18
      Quote Originally Posted by c615586 View Post
      Do you still have the QX4? Would the Tahoe replace both of your cars?

      I agree with the majority of other posts. Hold on to whatever you have for as long as possible and then buy the car you need as a husband and a parent when you actually need it. In the meantime take the money you would spend on the Tahoe and its gas bill and put it into a relatively liquid form of savings. You may want to look at a high yield CD (there aren't many right now), tax free government funds or high dividend stocks as an options for this extra money.

      Avoid taking on debt that is unnecessary.
      No longer have the QX4, my father's Equinox died, so I decided he needed it more than I did anyway.
      I'm an acquired taste, if you don't like me... acquire some taste.

    19. Member curvedinfinity's Avatar
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      08-07-2012 12:28 PM #19
      Being a father of 3, my advice: A G35x will work fine for one child in a pinch

      Keep doing what you're doing. Don't buy a bunch of junk for the baby -- stuff they don't need 6 months later. Save a lot for the house. Wait until your situation stabilizes with the house and baby and then buy new stuff.
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      08-07-2012 12:47 PM #20
      The only factors that would push me towards getting the Tahoe now, would be larger cash incentives/discounts available today + lower APR.

      If you suspect the rates will be much higher in 5 years, you know that's THE car you want, and there are good incentives and deals to be had now -- I would *almost* consider it.

      Having a car loan won't preclude you from buying a house if you have all your business in order. I've bought houses with minimal down AND a car loan on my record - still got great rates, etc...

      But that's really all a gamble. Does your mom really need your car - is that why she wants it?
      The best may be to help her find a good used car for her $9k, keep your G (or trade with her).

      Also, weddings can get expensive...

    21. Senior Member dunhamjr's Avatar
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      08-07-2012 01:02 PM #21
      Quote Originally Posted by curvedinfinity View Post
      Being a father of 3, my advice: A G35x will work fine for one child in a pinch
      being a father of one plus having 2 50# dogs...

      a g35 will work 100% fine for one kid. not just in a pinch.
      it will absolutely work all the time for a family of 3.
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    22. Senior Member dunhamjr's Avatar
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      08-07-2012 01:12 PM #22
      Quote Originally Posted by mk2_dub View Post
      I know this has been asked here several times, but I'm hoping my situation will be different...

      I'm currently driving an '05 Infiniti G35x and I was thinking of getting rid of it (selling it to my mother) in the fall and picking up an 07+ Chevy Tahoe.

      My reasoning for this is because in the next few years, I'll be popping the question and hopefully having some kids. My original train of thought was that if I get the truck out of the way with, it's one less expense to manage once we are married and have kids.

      My friend who works at a bank was telling me that it's a bad idea and that I should just drive the G35 into the ground, because with a $20k car loan, I would be unable to get a mortgage for anything over $360k.

      In the next few years, I will be planning to buy a house with the wife, and we both make pretty decent coin (she's a business manager at a BMW dealer, and I'm an underwriter for an insurance company), so I figure we should be alright.

      Any input?

      IMO you have way to many variables there for anyone to give any solid advice just off the cuff.

      personally. i think its a bad idea to swap out a car you know is doing well, for something unknown (no matter how reliable the new ride will likely be).

      you are adding on more debt right? not good.

      you havent even proposed yet, but she is your wife? jumping the gun.

      not quite married and talking about buying a car for your potentially maybe possibly 'some' kids?

      not saying you dont have the right to think this way. but you are trying to line up LOTS of "if's".

      i see no reason to swap out of your car right now. you dont have kids. you dont need the truck. hell you might find that the girl and yourself have fertilization issues and it takes 6 yrs to get her knocked up...

      i do understand wanting to be prepared but man. try for one step at a time.

      what i would do...
      refi or pay off the car.
      save, save, save.
      get married.
      save, save, save.
      buy house.
      knock her up.
      have kid #1.
      see if you will have kid #2.
      knock her up. (or not)
      buy SUV. (or not)

      this all goes out the window though if the reason you are selling your car is to help your mom out.
      epitome
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    23. Senior Member dunhamjr's Avatar
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      08-07-2012 01:13 PM #23
      Quote Originally Posted by Dr. Woo View Post
      I don't know what house prices are like in Ontario, but $360k sure sounds like a hell of a lot of house.
      its a fixer in ON.
      and in lots of places in the US, $360k is still basically starter home/condo money.
      epitome
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      2.0 TDI "BHW" engine partout - @tdiclub @vwvortex

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      08-07-2012 01:16 PM #24
      Quote Originally Posted by mk2_dub View Post

      My friend who works at a bank was telling me that it's a bad idea and that I should just drive the G35 into the ground, because with a $20k car loan, I would be unable to get a mortgage for anything over $360k.
      Unless he knows the ins and outs of your financial situation, thats a pretty blanket statement to make, imo

    25. Senior Member dunhamjr's Avatar
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      08-07-2012 01:21 PM #25
      Quote Originally Posted by mk2_dub View Post
      Thanks for all the input everyone!

      I forgot to mention that gas isn't too much of a concern for me as I commute by train to work everyday and the train station is roughly 2km from my house.

      As well, one of the biggest reasons I'm looking to get out of the G is because I know that if I keep it, I'll end up spending money on it modifying it. I know that I just need to have more self-control, but it's just who I am.

      The reason I was looking at the Tahoe was kind of as a way out (not exactly mod-friendly without spending large $$$).

      G35x - $230/month car payment + $230/month insurance + $300/month for gas + $???/month for mods
      Tahoe - $300/month car payment + $150/month insurance + ~$300/month for gas

      I just figured I'd end up saving a few bucks. Maybe not though.

      if you want to be a family man, then that means you need to be responsible with your household money.

      you could easily keep the G and not mod it if you were actually dedicated to doing the family thing right.

      you shouldnt need to toss a perfectly good car for a craptastic SUV driving experience.

      plus...
      your numbers show a real savings of $10/mo.
      G -- $230+$230+300 = 760
      T-- $300+$150+300 = 750

      and you dont drive alot, why do you think you will spend $300/mo gas?
      and why would the G and Tahoe have the same gas expense, does the G get that bad of mileage?

      on top of that. when you buy a car, any car. you are going to pay taxes. that money is just gone. whether you note that in your budget anywhere or not, its an expense and its not ever coming back to you.
      epitome
      "Not everything you eat has to, or should, taste really f*cking awesome. Sometimes you need to eat 'boring' food to stay healthy.

      2.0 TDI "BHW" engine partout - @tdiclub @vwvortex

    26. Senior Member dunhamjr's Avatar
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      08-07-2012 01:23 PM #26
      Quote Originally Posted by PsyberVW View Post
      The only factors that would push me towards getting the Tahoe now, would be larger cash incentives/discounts available today + lower APR.
      wouldnt all those incentives really only matter if he is buying a new Tahoe off the lot?

      the OP was talking about getting an 07+ Tahoe... which i think most people would assume means NOT brand new, hence really not going to get any purchase incentives/discounts.

      low apr maybe, yes.
      epitome
      "Not everything you eat has to, or should, taste really f*cking awesome. Sometimes you need to eat 'boring' food to stay healthy.

      2.0 TDI "BHW" engine partout - @tdiclub @vwvortex

    27. Member Mike!'s Avatar
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      08-07-2012 01:49 PM #27
      In Canada, how large a mortgage you can afford (with insurance through CMHC... a prime mortgage) is dependent on your gross monthly income and your other debt obligations. Two ratios are important. Gross Debt Service (GDS), the percentage of your monthly income that goes to the mortgage, property taxes, condo fees (if applicable) and heating cannot exceed 32%. Total Debt Service (TDS), which cannot exceed 40%, is those costs plus the monthly payments on all other debts. If you have credit cards or other revolving credit, they calculate the monthly payment based off of what it would be if the card was maxed out.

      Further, for calculating the cost of the mortgage, they use a "qualifying rate" of interest currently at 5.24%, so even if you take today's lower rate of interest on your mortgage, you'll be able to still afford the mortgage if rates go up by renewal time. The longest amortization currently allowed is 25 years, and minimum down payment is 5%.

      What all this means is having a $20k car loan isn't the issue. The issue is your monthly payment. For a $300/mo car loan to lower the house you can afford to $360k, you'd have to already be looking at housing costs within the 32% GDS threshold, and then have debt putting you over the 40% TDS threshold. 8% is a lot of wiggle room ($666/mo on a nominal joint gross annual income of $100k), so if $300 would affect it at all, you either have too much 'other' debt, or you don't have a high enough income to qualify for the more than $360k house to begin with even with zero debt.


      Put another way, for your GDS calculation, the monthly payment on a $500,000 house in Oakville with 5% down ($475,000 mortgaged) at the qualifying rate is $2,844/mo, plus property taxes and heating. Add that on, say you're at $3,400/mo. You'd need a total gross income of $10,625/mo, or $127,500/yr in order to pass the GDS on that. If you're making that kind of money between the two of you, a $300/mo car payment shouldn't be enough on top of other debt payments to cap your TDS.


      I've entertained the thought of future-proofing my vehicle choice before. My wife and I are married 3 years, still with no kids, and yet a couple years ago I was looking at 3-row vehicles like the Taurus X, Flex, and CX-9, entertaining thoughts about easier road trips with friends, but also future proofing for eventual kids. I'm glad I didn't. All it took was a couple test drives to realize I wasn't ready for that yet. Get it when you need it, and not before. There's plenty of time left.
      Last edited by Mike!; 08-07-2012 at 01:58 PM.

    28. 08-07-2012 01:55 PM #28
      QX4 is NOT baby/child friendly. Sure, it has plenty of space to haul around all their crap. I bought mine in January because child #2 was on her way. For whatever reason, the way the baby seats attach to the car do not allow much room for the people in the front. I feel like a freaking giant every time I drive it, can't wait to sell and buy a Tahoe. In conclusion, good move for selling it to your pops.

      Also, why do you need to buy a house that costs 360k?



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    29. Senior Member dunhamjr's Avatar
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      08-07-2012 02:00 PM #29
      Quote Originally Posted by Chiropractor JW View Post
      QX4 is NOT baby/child friendly. Sure, it has plenty of space to haul around all their crap. I bought mine in January because child #2 was on her way. For whatever reason, the way the baby seats attach to the car do not allow much room for the people in the front. I feel like a freaking giant every time I drive it, can't wait to sell and buy a Tahoe. In conclusion, good move for selling it to your pops.

      Also, why do you need to buy a house that costs 360k?

      www.facebook.com/statestreetspine
      the OP already got rid of the QX4. so unless he takes it back from his dad....

      $360k on a house actually isn't a lot.
      not everyone can live in Sarasota.

      going from where i live... Kent, WA to Sarasota, FL... housing is 39% cheaper where you are.
      and now consider that where i live, housing is cheaper then in much of Ontario.

      you live in a very cheap RE market, so $360k can buy a lot there... but not everywhere.
      epitome
      "Not everything you eat has to, or should, taste really f*cking awesome. Sometimes you need to eat 'boring' food to stay healthy.

      2.0 TDI "BHW" engine partout - @tdiclub @vwvortex

    30. 08-07-2012 02:13 PM #30
      I know he got rid of it - just wanted to vent about the car!
      www.slimdownsarasota.com - Please check out my new page!

    31. Moderator Oliver@triplezoom's Avatar
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      08-07-2012 02:21 PM #31
      Quote Originally Posted by Mike! View Post
      In Canada, how large a mortgage you can afford (with insurance through CMHC... a prime mortgage) is dependent on your gross monthly income and your other debt obligations. Two ratios are important. Gross Debt Service (GDS), the percentage of your monthly income that goes to the mortgage, property taxes, condo fees (if applicable) and heating cannot exceed 32%. Total Debt Service (TDS), which cannot exceed 40%, is those costs plus the monthly payments on all other debts. If you have credit cards or other revolving credit, they calculate the monthly payment based off of what it would be if the card was maxed out.
      Sometimes you can go over the 32%/40% thresholds, if you have good credit. Not that you should, though.

      Also, when it comes to condo fees, I believe only 50% of the fee contributes to your GDS. At least, that's how it used to be.

      The qualifying rate is only used for all variable rate mortgages OR fixed rate mortgages that have a term of less than 5 years. If you get a fixed rate mortgage with a five year term then you don't need to worry about the qualifying rate.

    32. Moderator Oliver@triplezoom's Avatar
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      08-07-2012 02:26 PM #32
      Quote Originally Posted by Oliver@triplezoom View Post
      Sometimes you can go over the 32%/40% thresholds, if you have good credit. Not that you should, though.
      To expand on this, here are the current CMHC guidelines based on credit score:

      <680: 35% / 42%
      680+: 39% / 44%

    33. Member Mike!'s Avatar
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      08-07-2012 02:30 PM #33
      Good info. I did forget about it being 50% for condo fees... that does make sense as often some utility costs are included in the condo fees.

    34. Member Facin's Avatar
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      08-07-2012 02:40 PM #34
      Never buy something now for an anticipated need 3+ years from now. If you can handle the car loan now, you will be able to handle the car loan when you actually need it. It would appear to me that you are trying to talk yourself into letting yourself get a new car. If you really want it, get it...but don't fool yourself into thinking it is because of some need.
      2010 A4

    35. Moderator PsyberVW's Avatar
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      08-07-2012 02:43 PM #35
      Quote Originally Posted by dunhamjr View Post
      wouldnt all those incentives really only matter if he is buying a new Tahoe off the lot?

      the OP was talking about getting an 07+ Tahoe... which i think most people would assume means NOT brand new, hence really not going to get any purchase incentives/discounts.

      low apr maybe, yes.
      Sorry, missed that detail. Brain saw 07+ and that converted to "new Tahoe"...

      I too think "future proofing" doesn't make sense unless you are more than convinced. In 5 years there will still be used Tahoes for about the same price, but they will be 2012 Models instead of 2007 models.

      Also keep in mind that all these arguments are aimed at monthly expense, but not really total cost.

      Not buying a car now prevents a rise total cost.

      I'll stick to the best bet being to have your mom buy another car for $9k-- and either trading cars with her ( if you're tired of the G) or just keeping your car.

      One of my friends survived a 3 year lease on a G37 with a wife, 2 kids (1 in a seat) and a 6 year old Golden Retriever...

      I think you'll be fine with the G. Also - mod it if you want to. Or don't- but don't think that modding it will be more expensive than buying a other vehicle. As your priorities change, so will your need for self-control.

      Cliffs: just keep doing what you are doing. Make the decision when it's needed, not now.

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