HomeCarsWhy buy a transmission when you can buy a new car?

Why buy a transmission when you can buy a new car?

I was creepin’ on Facebook the other day, when I saw a sparkly new car show up in one of my friends’ posts. After clicking around, I discovered my friend purchased a brand spankin’ new Jeep Cherokee.

I thought it was a little odd that she purchased a new car being that the last time I spoke with her she told me she was looking to quit her part time job at a local photography studio.

I can’t imagine a part-time photography assistant makes mad scrilla, but perhaps I’m wrong?

On Friday night, I attended a fundraiser for a youth group I am part of, YoungLife. While at the banquet, in walked Ms. Jeep Cherokee. We started chatting and I mentioned I noticed she had got a new car.

I asked her a little about the circumstances leading up to the purchase.

Because I’m nosy.

She told me that her former car’s transmission went out and it was going to cost $2,000 dollars to fix. With excitement, she further explained that her former car was only worth $900 dollars so it made no financial sense to fix it.

And that’s when she said, “So I went and bought the Jeep.”

It took every ounce of self-control to not do something like this…




I wanted, so badly, to know everything about her situation.

…I wanted to know how much the car cost.

…How much she put down.

…And what the heck she was thinking.


Instead, I smiled politely and said something like “Well that’s exciting.”


Since when did a $2,000 expense become a justification for a $20,000 loan?

I couldn’t imagine she put more than 10% down, which means she is not only the proud new owner of a Jeep Cherokee, but also a couple hundred dollar per month car payment.

I think what upsets me the most is that she is completely oblivious to the gravity of taking on such a big loan. I desperately want to sit down with her and ask why she thinks $20,000 is better than $2,000. Or at the very least, why she didn’t buy a $5,000 used car?

I know most of us PFers have encountered similar situations. You know, where someone says something that makes the PF nerd inside of you want to curl up in the fetal position and start sucking your thumb.

 What did you do?

Do you smile and politely pretend like your excited for them? Do you slap them across the face and tell them their dumb? Where is the line between expressing legitimate concern and sticking your nose where it doesn’t belong?

Moral of the story: depreciating assets suck.



  1. Well I hate to say it, but I use to be that girl. I use to make crazy decisions like that. She probably used it as an excuse to buy the new car. I remember when I had a total of 3 cars and it was just me and my Ex living together at the time. Why do 2 people need three cars while in debt? Talk to her and maybe the light bolt will come on…..or maybe not.

  2. Oh man, it would’ve taken every ounce of my self-control to just smile too. What was she thinking?!

    Relatedly, we just paid $380 to fix the exhaust system on our 1996 Honda Odyssey. It’s still a great car and we can probably squeak out a few more years, so why not. No reason to scrap it (and then pay cash for a used car) until we absolutely have to.

  3. My sister recently leased a new car instead of buying it (even though the old car was totally fine) because of the lower monthly payments. It was all I could to to stammer out… “But…when you buy it…you own it after you are done making payments…” and then I closed my mouth because I didn’t want to be THAT girl.

  4. I have to admit even as someone who is very careful with my money and read PF blogs I recently did about the same thing. I would have needed to replace the transmission and radiator in my car and it would have cost more than my car was worth so I choose to get something else. In my case, I traded in my car to the dealership and they gave me the value of my car without issues plus and fortunately I was able to put down a hefty down payment. I have a car loan for the first time in my life but don’t regret it at all. Now that is winter I am so glad I broke down and finally bought a vehicle nicer than what I could get by paying in cash!

  5. I am actually in the middle — really; if your car is still doing fine the Joneses can go fly a kite, and should. One question is how much is she putting in yearly into such “one-time” maintenance costs? Why didn’t she look at even one year old or something, right, because worse than a loan is an upside down one.

    Now, when my wonderful car (84K miles and I was expecting another 300k+ out of it) was totalled last year, I though seriously about the difference between a 1 yr old model and squeaky new.. and vs one older, etc. I decided against the older because of the hidden costs of possibly sucky maintenance from the previous owner that I did not want to pay for. BTW, fleet vehicles, even if higher per year mileage, will be better cared for than personal cars in general, and will have had all maintenance done recommended by the manufacturer — and I could not find one. *sigh*

    I would have gotten a one-year-old because “depreciation sucks” is so the truth. When I researched, I found that with the incentives of the time, the new was the same price (slightly cheaper), I got better loan rates, and they were offering two years free maintenance on the new. Now, in the general course of things, this is NOT true, but I got lucky, and with what I put down, my loan is not upside down, even with depreciation.

    Your miles WILL vary unless you do a LOT of research and get lucky on timing. All that said… I would have twitched, and WOULD have asked, because tactless. 🙂

  6. I don’t look at it that way, I’m afraid. I agree with S L above that until/unless you know how much she’s had to spend total for repairs over the past year, it’s difficult to judge her decision to get a different vehicle.

    (As to what vehicle she got and what that cost/will cost her in the long run, though? Another issue entirely, and–if she’s a close friend who ever gives you an opening to discuss finances and maybe offer advice–maybe worth a discussion at some point if you both are willing and the timing seems right but not too serious.)

  7. I would have bought the new car too. Seriously. But I also know very little about her financial history/background.

    In similar situations in my own life, I have said I was happy/excited for them but in the privacy of trusted friends would comment on such a ridiculous expenditure. From personal experience it doesn’t seem worth it to care all that much about the way others think about money, because very rarely do two people see it the same way.

  8. I just came out of a similar situation (totally depends on that girl’s background story though). My 2000 Honda Odyssey with 150k miles kept putting me in for $700-1000 bills every 6-ish weeks. It kept getting worse, things just kept breaking. It wasn’t like the car was necessarily dunzo, but the way I looked at it, I needed a reliable mode of transportation (80 mile per day commute) and I was sick and tired of trying to find rides around town when the car’s light would go on and it needed to get looked at. Also, regardless of the fact that I owned the car outright and didn’t have a payment on it, it was literally costing me more per month to maintain the thing than it would have been to lease a freaking Mercedes. I struggled with the same things you’re thinking – IF I JUST FIX THE CAR, IT’LL SAVE ME MONEY! Six months of that, and I’m in the hole about $5000. Leased a Prius (figure I would try to cut money out somewhere, anywhere – in this case, gas) last month and couldn’t be happier. Going to sell the Honda for the $500 its worth and suck up the monthly car payment. It’s what was best for me (mainly my sanity and safety).
    But yeah, she does sound kind of disoriented – not sure why more people out there don’t avoid car loans like the plague.

    • I was in a similar position any years ago and bought a slightly used Saturn back in the day. I was spending $200-$300 each month to fix things on my 12 year old Sable for about 6 months when I gave up and added a $250/month car payment to my expenses. The car was reliable and much better on gas. Same thing happened 10 years after that when once again I was starting to spend $200 – $600/month on repairs to keep the next car going.

      Depending on your financial situation and how long you want trouble-free car, getting a new (or new-ish) car makes sense. If you buy a cheap used car, you may go trouble-free for 1-2 years, but if you get a new car, you may go a lot longer before you have to start sinking money into repairs repeatedly.

  9. Oh man… I had a friend who said “I finally paid off all the interest on my car loan ahead of time, so now all I have to pay is principal. I’m not getting charged interest any more!” *facepalm*

    I didn’t bother explaining the error of her ways. What more can you say other than “Good for you!”?

  10. I ended up doing something similar too. I drove my 2000 Taurus from 2005-2011. It was in pretty good shape when I got it and my parents paid for it. I’m from Jersey and I attended school in NC. All the trips back and forth plus regular driving around town in which ever state I was in at the time put nearly 100k miles on my car. I got a great job a year and half after I graduated. The first order of business was to set aside some money to be able to get my own place. I had 5K saved up after a year and then the car started acting up. It got to the point where I would press on the accelerator and it wouldn’t budge. It would be going along fine and then suddenly refused to move. After getting it checked out multiple times and spending a whopping 4K in repairs only to still have the same dangerous problem day in day out, I had it! I decided it wasn’t worth it to waste anymore money trying to fix it. I was trying so hard to avoid a car payment. Anyway, I ended up buying a 2010 model mazdaspeed3 in 2011. Then I refinanced the loan from a 10% interest rate to a 2% interest rate since my credit started to build up after making a year’s worth of payments. I don’t regret my purchase at all. I know I’ll get to work and everything works as it should. I get great gas mileage, currently I can fill up for $25 and travel 400 miles on a full tank inspite of it having a turbo. I’m looking forward to driving this thing until it won’t move another inch!! I never did move out. The car payment wasn’t behind that though. I have rediculous student loans. My car is paid off but those loans make it impossible to do support myself. Hopefully this was a last resort for her.

  11. I smile and comment on how nice the car looks. They aren’t asking me for financial advice at the moment. But when they ask later on what they can do to improve their finances I can point out the previous choices and better alternatives. They are much more receptive when they are asking then when they are show and telling.

  12. I’m really not trying to justify what she just did (I drive a 16 year old car. And love it), but so many people around me have the same logic, they have me thinking I’m the crazy one!
    It’s as though they think that because they don’t have to pay the whole amount immediately, they don’t have to pay it.
    It genuinely hurts my head. What makes it worse is that they’ve got out that huge loan on an ‘asset’ that’s going to depreciate more rapidly than they can pay off that loan. That hurts my head even more.
    Rant over, you’re right- people are stupid!

  13. I’m going through this right now! The whole new-transmission-or-new-car debate, not the how-should-i-react-to-financially-questionable-attitudes issue (though today someone at work mentioned how much he loves his student loans because of the tax break he gets…I couldn’t keep my mouth shut, but tried to be nice about it). I have a busted MINI Cooper with 80k miles sitting my driveway. I’ve had that car for ~10 years and loooove it, and was ready to sink $6k into it to fix the transmission/clutch, plus replace the tires and shocks…until my mechanic figuratively slapped me by literally suggesting I call 1-800-I-AM-CRAZY for advice. He only services MINIs and BMWs so I will have to find a new mechanic if I get a different type of car (which I’ll probably do, since MINIs are expensive to maintain….but either way, it’ll be used and paid for in cash). I’m so grateful for his honesty and I wish more people were that honest with me!

  14. Last month, I couldn’t get my 1999 Honda Accord to start. I tried jumper cables, but that didn’t work, so had it towed. The car shop said it was my starter and it would be $500 to fix. Everyone at work was asking me ‘so does this mean you’re gonna get a new car?!’ My response ‘no, this means I’m gonna get a new starter!’ My car has 165,000 miles on it and it I just had it painted. It looks great! I love my Honda and I love all the money I’m saving on car payments

  15. I faced about a $1600 2-part repair a few months ago on a 14-y.o. car worth about $2k. One part (about $600) was immediately necessary for drivability, the other could wait. I fixed the first, looked around at new cars, and hemmed and hawed. If I had gotten a new car, it would have been because my current car is not a good fit for my lifestyle. I could buy a new car outright, but I don’t feel comfortable losing that much liquidity at once, especially if I buy a house in the next few years. I eventually fixed the second part of about half the price at another shop and everything seems good. Glad to have avoided a car payment a little longer!

  16. If they don’t ask you for your thoughts or advice, then don’t give it. Sounds like you went about it the right way.

  17. Good god, I know how you feel. The way people justify their emotional buys sometimes is insane. And I’m not saying never buy anything nice ever…


    You want a new car smell – go buy a car because you want it. Don’t justify it with some made up financial equation on fixing the tranny – it won’t make sense. Face it, you just wanted a new car.

    But what can you do, people do things like this. You can only just smile and say “well, that’s exciting!”. 🙂

  18. I normally just smile and nod like you said. It takes too much time and effort to try and explain something like that. When I do find ways to save money I’ll let certain people know or maybe drop some hints about how expensive X really is. But I’m not going to go on a rant against someone that made a huge purchase because it will just end poorly. That person wants to justify their purchase after making it!

  19. […] Why Buy a Transmission When You Can Buy a New Car by Punch Debt In The Face – interesting story about wasting money…or is it waste? In the last 12 years I have bought 2 new vehicles because of car problems. But both times the new vehicles were the most basic of basic machines. The first one had crank windows, manual transmission, only FM/AM radio and no luxuries, but the monthly payments were lower than what I was spending each month on keeping my old car running. The new car was also much better on gas and was dependable and the only times it was in the shop were for an oil change. But the lady in this story seemed to follow a different logic. […]

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