Car...what you need or want?

DH and I went to look at a couple of used cars this weekend. We specifically were looking at Subarus because of the space and AWD. We had never test driven or even seen a subaru. We just picked a Subaru outback, legacy, & impreza based on what everyone we work with and live by has said.

So we saw a pretty good deal on a used 2004 Subaru Outback Station wagon. But while we were there we also saw the new 2008 impreza wagon. They were similar in price $17k for the impreza and $13k for the outback.

We were very impressed with the handling of both cars. We were also very happy with the larger space in both cars than what we currently drive. But we realized that the two cars we saw were very different cars. The Outback was substantially larger than the Impreza. We decided we would start thinking about replacing my DH's Focus next year but we needed to nail down a target price range and car specifically.

DH preferred the Impreza, while I preferred the Outback. So we talked in the car. The Impreza is a car which we might have to replace in 3-4 years after we start our family. It's a little larger than our cars and has a bit more storage space. The Outback is easily a car we could fit 2 children, dogs, and stuff into.

DH said a car is a car, you should drive what you want. I think we should look long term and buy something which will be usable longer than just a few years. This lead to the discussion whether you should buy a car you can use 90% of the time or a car you think you'll use 70% longer term?

My DH's argument is that we'll use the smaller car for 90% of the time for the next 3-4 years. Then if we have to trade it in for something larger because of necessity, then at that time you reevalute it. He equated it to buying a stock, you reevaluate at each point in time. You buy a car you will use for 90% of the time and rent if necessary.

I pointed out that cars depreciate quickly. That if we bought even a used car, it would depreciate in 3-4 years and we'd again have to be dumping more money on the table to buy another new used car in 3-4 years. If we moved up into an Outback from an Impreza, then we'd eat a harsher depreciation, time, energy expended buying another car versus just buying a car we can grow into till it dies.

It's a difficult financial decision. So do you buy a car you need or want? Is it purely a financial decision?

So as you can see this is about 1-2 years away our decision but we need to start planning and looking. I would like to pick up something used. And it would be lovely if something would just drop in our lap. But we have to keep our eyes open and our finances ready just in case.