I really don't know anything about cars, but reliability is important for both you and your soon to be teenage drivers. Before you do anything, I would contact your insurance agent to get the specifics on the Impact of teenage drivers added to your policy. On an average sedan, my insurance increased about $1000/year/child when they were 16. And my kids did not have their own car and never had a speeding ticket or accident. Once you have those numbers on your luxury car,it may be a very easy decision.

That is a good point about insurance. I wound up with my Mustang based on the owner had two teenage sons who started driving. V8 Mustang and teen boys not a good mix, generally. It generally doesn't matter that they are "not allowed" to drive the car; it is more the matter it exists and there is potential for them to drive the car. So, yes, talk to your insurance agent. The woman who owned my car was heartbroken to sell it.

I pulled out my Consumer Reports auto issue from this year, and, not surprisingly, the BMW 3-series is recommended. The data do not go far enough back on the Audi A3 for 2006, but there weren't enough data to make any recommendations on 2007-2010 models, but overall Audis tend to do average to better than average for reliability.

I have a 2003 Subaru that I bought new that now has 139K miles. It has no major problems--I just had oil change and state inspection yesterday, but I've done the timing belt (check on the Audi if that was done if it's needed), & water pump at 100K. I plan to keep the car, but I also drive for my job about 15K per year, and I know I will get more nervous as it goes over 150K, but Consumer Reports says it should easily go to 200K. DH has 2006 Honda Accord V6 that has only 52K miles, so we use his car for trips. Plus, both my cars are stick shifts, which he hates driving.

So, the answer is the insurance plus how well the car has been maintained. I am impeccable with maintenance.

I can't quite follow your math. Are you making payments on the BMW now? If so, do you have any equity in the car?

The problem with the Audi is that repairs will be expensive. One repair can easily equal three $500 per month car payments. If you are buying from a dealer you may be able to purchase a warranty but that can also be expensive.

Do you have the CarFax report on the Audi? How many owners has it had? Is there any chance that it was one of the thousands of vehicles flooded in Hurricane Sandy that are now on the market. As you know repairs on foreign cars tend to be more expensive. DH has driven German cars for 15 years and I just traded in my Porsche (part of the VW, Audi group) so we're familiar with maintenance costs on German vehicles, and Audi's rank right up there..

Personally I wouldn't get rid of a nearly new car and take the depreciation hit for an unknown 9 year old vehicle. If you're concerned about safety it sounds like getting rid of the Jeep might be the best solution.

Did you google Audi A3 reivews? I'm sure you can retrieve reviews from Edmunds or Car and Driver. Of course the reviews from 2006/7 would reflect the car when it was news. But it might give you insight into handling issues.

Maire

This post was edited by maire_cate on Sun, Nov 3, 13 at 8:33

My first thought was the same as Maire's...if you don't feel the jeep is safe, then sell it, as gsciencechick mentioned, for a subaru. If you need the all wheel drive, they have it. They are very safe and very reliable and last a long, long time. We sold our 95 subaru to DH's cousin who is still using it and is very happy with it. Plus I think you'll find them much more comfortable to ride in than a Wrangler. And jeep products are not what they were when dad bought our 1948 jeep. They have a lot of quality issues.

Your daughters will need a vehicle that is more like a tank than a sports car to get them through their first driving years safely. And you've already taken such a deep hit in value on the Beemer that it's worthwhile driving it into the ground. It will only get cheaper from taxes and insurance POV as it gets older (though the maintenance costs are doozies, even if it's just an oil change.)

The insurance will be a big deal when both girls are driving. I had my insurance company run several options. Just adding one new driver to our current policy will double our premium. Adding a 3rd car will nearly triple it. That is due to the BMW.
We are making payments on the BMW. We have little equity, about $1500. Our payment is just over $600. We could pay cash for the Audi, but DH isn't comfortable pulling that much cash out of savings. He would rather spread it out over 6 months or so. It just makes him feel better. We would then put that monthly payment into the girls college savings. We're already saving for them, but more would be better of course. That would add up to another 15k in just 2 years. I wish I had been more focused on college savings last year. Between payments and depreciation, this car has cost us 14k this year, not to mention raised insurance premiums.
I would hate for DH to sell his Jeep. He really likes that car. He has owned 2 cars in the past 16 years. He wants to keep the Jeep indefinitely. He only puts about 3k miles a year on it. He doesn't treat himself. His only toy is this Jeep.
About this particular car. I saw the Carfax. We would be the 4th owner. The first two were great, but the last has only done one oil change and no scheduled maintenance in 25k miles. It is certainly due a timing belt change at the very least. That is about 1500. The car is at a dealership, so I know we can work the price down. Maintenance and basic repairs will be expensive on any German car out of warranty.
Funny you should mention a Subaru. That is on the list for the girls' car. Right behind Honda and Toyota. I want their car to be safe, reliable, and gas efficient. They aren't much fun to drive, but that's a good thing in therir case.
Would it make sense to keep the BMW another year, or are we just throwing money away at this point? Is "driving it into the ground" really the best thing to do financially?

We have 2 kids in college now and have #3 heading there in 3.5 years. Keep the BMW. It is your dream car! Live a little. Sell the Jeep, buy a junker that you feel is ok for the kids to drive and have some fun for yourself! I say this because it sounds like you are financially sound, and have saved for college. Especially if the BMW is paid for, then just move forward and enjoy every minute you have in that car!

I am not sure why you think the Jeep is not suitable for begining drivers. It is big and high, which seems like a good thing for me.

oops, I think we cross posted, so I didn't see your last post when I posted.

I think you literally have to take out a spread sheet and so some scenario analysis, because there are a lot of parts to this question. You are not just trying to compare the BMW to the used Audi, you are adding in new drivers and new insurance costs. It's a complex question.

If you are comparing the BMW only to the 116k mileage Audi, prima facie I am not so sure that is a good trade. There is a wide range of possible maintenance outcomes with the Audi, which adds a lot of uncertainty to the equation. If you are really switching cars to save money, then don't just move a notch down the luxury curve. Go out and buy the least expensive reliable car you can, that is a year or so old and under warranty. Otherwise, you may be giving up something you enjoy (if you do?? ) for something that will always feel like a compromise (oh,here is my not-BMW) and not really saving much money after all...

I am definitely a "drive it into the ground" type of person. I am 50 years old and only owned 4 cars my whole life, 2 of them I have now. The Subaru is the only one I bought new only because the price was so good, it was better than many used cars I looked at plus 5-year warranty and 1.9% financing at the time.

OTOH, it is hard to find a good selection of used Subaru cars since most people drive them into the ground.

mntredux is right.

There are more options than just the keep the BMW or buy the audi option.

Consider what car you want the kids to drive, and for how long. Do you anticipate that they will take a vehicle to college?

How long would you plan to keep the BMW generally?

We are a "buy it new, drive it a long time" car family. We feel that the financial certainty of the new car payment is easier to plan for than the uncertainty and interruption caused by breakdowns and repairs.

I think that if you yourself would keep the BMW a long time, then keep it. If you are the type of driver that wants a new vehicle frequently, then sell it, buy something less costly to insure for you, and then buy something suitable for the kids.

We are buy it new, drive it to the ground people too. My 2002 Honda Odessy (aka mom mobile) is at 163,000 miles and still going strong. When she dies (in a year or 3 years) I will be going for the BMW328i. Not sure we will be able to afford it, but it will be what I want. Since I have owned 3 new cars in my 50 year life and drive them for over 10 years, my guilt factor is not very high. So, I would look at how to meet your overall goal, which is to fund 3 cars and 2 college educations. What is your college fund goal? How close are you to fullfilling it? I agree that spread sheets are necessary. Make good choices based on real numbers, not on things that sound like they would save you some money.

I would not trade in the BMW. Since you just bought it last year, I'd assume you have 3 years left on the warranty right? I wouldn't give that up for a car w/ as many miles on it as the Audi had, especially since you'd lose 20 percent. We've always been a BMW family and the customer service and quality of the cars seems like it would be worth keeping especially since repairs on an Audi are so expensive.

I am curious why you won't let your kids drive the BMW? I learned to drive in a BMW and it made it much easier because the car had such tight steering and my parents liked it because of the safety features. It seems like a newer BMW would have a lot more safety and accident avoidance features for a new driver.

A cautionary tale based on my experience with a 1999 Audi I purchased new. I practically lived at the dealership. The airbags were replaced twice, new ball joints twice. There were so many other problems but I considered the two problems listed serious.

I traded it in 2,000 miles before the warranty ran out. I had no faith in that car whatsoever. It's true that it could have become a reliable car after I sold it but it was not a good experience. I just knew I didn't want to throw money into it after the warranty expired because everything wrong with it was going to cost big money. Seriously, my car repair file was two inches thick.

I think you should keep your BMW. One year isn't long enough if you are making payments. The interest is front loaded and you are likely under water with it.

You guys are so fabulous. There are so many variables. I think that's why I can't make a decision. These are some certainties-
I go through cars quickly. About 2.5 yrs on average with at least 15k miles per year. Normally, I buy 2-3 yo used cars. I was blinded by the BMW. It is my dream car, but I fall in love easily :-). It may hurt to get rid of it, but strangely I like the Audi a lot. At the same time, I know my love affair with cars. I will lose interest after a year or two, but by then we'll be fully focused on paying for college for several years. We had a good chunk in savings for them, but we will have to cash flow it as well.
The Jeep is hard to maneuver, prone to rollover, gets amazingly bad gas mileage, would never be a daily driver for anyone, and has to stay.
The girls will share a car that will cost under 6k. DD1 will drive it to school and work exclusively until DD2 starts driving 4/15. They will have to share until DD1 leaves for college 8/15. She won't be taking a car. DD2 will have it for her senior year. Chances are we'll buy another 6k car after her freshman year.
I don't want the girls driving the BMW because I know they'll wreck it, or least ding it. All those bumps and scratches are so much more expensive to repair. It is also a fast, fast car. One last thing, too many kids in their schools have their own new high end cars. It bugs me. You want to drive a $40k car, then get a job and buy it yourself! It's a luxury my girls haven't earned. Be happy with your paid for 10 yo car. It's more than many people with real jobs have.
The more I research the A3 the less sure I feel. Reliability ratings combined with that mileage and spotty maintenance are giving me pause.
Reading through this thread, I had an epiphany; what is I really like the idea of having no car payments. I like that more than I like my car! I would rather have a paid for car, that's still sporty and fun to drive, than my current car with a payment. If we had paid cash, I would not have spent nearly as much. If I had, chances are I would be talking about selling it, buying a 10k car, and throwing the rest into savings.
Any advice for the smartest way to get to a car payment free existence with 3 cars and two college educations in the next 2 years?

We are also German-built car fans. I had a 2001 Audi Allroad that was an amazingly magnificent car. Bi-turbo, all-wheel drive, and hydrolic lift if you needed to get through water or something. I planned to keep that car until I died. Then, someone totalled it for me. I now have a smaller Audi Avant Wagon. I like it. DH has two BMWs that he loves.

I have never had huge maintenance bills other than scheduled stuff. I always would buy an extended warranty on an Audi though because of experiences like goldie's.

For car payment-free existence, I would go with an old Volvo. They are tanks-safe and you can find them fairly inexpensively.

I have two friends who had Audis that they bought used that were constantly in the shop with expensive repairs. I definitely would not buy a used Audi.

DH has a 2012 BMW X3. This is his fourth. I have a Prius. It a Prius 5 and has amazing technology. We went to Oregon and averaged over 53 MPG. Even my DH became a convert.

We actually own four Prius, amongst our family. I swear by them. Max has a 2004 that, besides one brake job, has only required oil changes. It now has 230,000 miles on it. We have another Prius that has well over that and the same experience. One brake job. I purchased a 2007 for my grand daughter recently. Toyota certified it with 95,000 miles on it. I have full confidence.

I'm more into having a car that works for me these days. I'm done with spending time at Dealerships. A great side effect is that I'm not supporting the oil industry much anymore either. That is a statement car all and in itself. Win Win.

My car has Radar Cruise Control and Lane Keep Assist. It can park itself. I love that!

I if you keep the BMW even if the girls won't drive it you're insurance will still account for the teenagers. Same goes for the rollover prone jeep. Have you and your husband looked at insurance costs? Maybe he will get rid of the jeep. I was one of those bratty kids driving a luxury car. My parents bought it for safety. I never had a speeding ticket in high school despite having a car that went "really fast". My boyfriend at the time had his family's 12 year old Volvo. He had 2 tickets in a year... I think any car can get any new teen driver into trouble? I think my parents were smarter getting me a car that had trouble fitting 4 people in it. My friends that drove the family wagons or mini and had the most distractions.

All said, I don't think I would sell the nearly new car. Then again I can't imagine trading in a car every 2.5 years. I drive my cars into the ground.

I once sold a car about a year after I bought it. It was an Audi that we bought brand new. It was terribly unreliable which I couldn't stand and no way I would have kept the thing after the warranty was up because the cost of repairs was astronomical. It was a blast to drive but reliability and economics won out with me. I went back to Honda which is what I had before DH got the wild hair to get an Audi. I traded it in while he was out of town.....

My only advice is don't buy an Audi, especially one out of warranty with a lot of miles on it and especially if your kids would be driving it. It would be very important to me to have a reliable car for young drivers.

I have heard nothing but horror stories about Audi just in the past couple of day so the brand is no longer in the running! We either need to buckle down and get this car paid off quickly in the next 2.5 yrs or I need to focus on replacing it with a 2010-2012 CPO that we will pay off in about a year.

Both our current cars have higher than average premiums. My premiums went up 30% going from a VW Passat to the BMW. DH's 98 Jeep premium is only $20 a month less than mine. We could save considerably if we both switched to a sedan or wagon.

The girls are helping pay to pay their insurance. They have to pay us 2 months upfront and then contribute $50 a month. They also will be responsible for their own gas. They will have part-time jobs but can't make enough to cover everything and still have money for going out with friends, and savings. Gas and insurance (just their car, not the increase on the overall policy) alone would be about $200.
I never realized how incredibly complicated having teens is. It's just one thing after another. College selection/application season is right around the corner. More decisions!

fwiw, I have always driven luxury vehicles and when our three (now grown) were learning/16yo+, our insurance company (Allstate) did not go up on my vehicles which the teenagers did not ever drive. They listed them as drivers on their own cars and only those cars were rated for teenagers.

I with Allison, insurance (thru USAA) didn't go up at all on our vehicles but DS's premium on his car was twice that of ours combined.

We bought DS a total beater car (old Nissan Altima) for $3000. Just as I suspected, he totaled it within a year. The second car was a Honda Civic. I got it for $3000 less because of severe hail damage. It had low miles and ran perfectly but looked horrible. By that time he had a job and was responsible for everything - gas, maintenance and insurance.

Eight years later, he's still driving that awful car! Turns out, when it's his pennies, he likes to pinch them.

BTW, there's nothing practical about having two teen drivers!

Insurance rules are different from state to state. Here in Virginia, even if you assure the insurance company that your child is not permitted to drive a car, it doesn't matter. Your rates do change with a young driver in the house. If the children have a license, they will not accept the parent assurances.

I think there is a difference between buying your teen a car (luxury or beater) and putting it in their name versus having a spare family car and letting your teen drive it.

Maybe you should look into the cost of the girls having their own policies. My parents insisted we buy our own cars once we were off learner permits and have title, insurance, registration, etc. in our names. It was not horribly expensive, but that was a long time ago! But I also walked to school and had a job within walking distance of home. I also didn't buy my car until I was close to 19. I started at community college and either got a ride with friends (paid gas) or took public transit.

As far as learner permits are concerned, there really isn't any choice. Good luck.

This post was edited by gsciencechick on Tue, Nov 5, 13 at 7:52

If I recall, it was cheaper to have the kids on our policy than them having their own. They also got good student discounts.

One thing.....if the girls go away to college you can reduce the rates for them. I did not know this until my daughter was a soph or junior...and of course State Farm never mentioned it, even though I had to show her grades for the good student discount clearly indicating her college was in another state....grrr. The college had to be more than 100 miiles away. It's at least worth asking about.

I won't be much help, because I have a totally different outlook. I have no desire to own a luxury vehicle. A car is a car to me. Something for transportation. Of course I want a good car - something dependable and one that looks nice. But I just cannot, in good conscience, spend over a certain amount on a vehicle. But I think you've just made your own argument, that you'd rather have a paid for vehicle than the BMW. I don't blame you. I would avoid having a car payment if at all possible. As far as the 3 vehicles and the college educations, I'd do as suggested by others - buy older, used, but dependable cars for the girls. Look into separate policies for them and have them help with their insurance, etc. For the college educations, look into any and all scholarships that might be available. A community college may be less expensive - as will one where your daughters could live at home (lower overall expenses).

tina

In our state, all liscences drivers are covered on all cars in the home. I spoke to our USAA rep who confirmed. I had initially thought they would have their own policy on their car, but no such luck until they no longer live at this address. We also have some of the highest insurance rates in the country due to the large number on un/under insured drivers. Like I said, the girls will help pay for their insurance, but part time jobs don't pay much. This summer the oldest is expected to work fulltime and cover all the costs.
We've got a pretty good handle on college. We're looking into all the ways to help cut costs(AP course, dual credit classes in high school, Governor's Scholar Programs, and scholarships of every variation). This combined with our savings, cash flowing, kids working and saving in the summer, and making smart choices about college selection will hopefully mean 2 college graduates with no SL debt for them or us.

No great words of wisdom for you, but a couple of thoughts. For my older boys we bought the older one a subaru wrx and middle one a used saab 9-3.

While they both have been amazingly trouble free, when they do need work the things that are wrong need to go the dealer and it's been expensive. In particular with the Saab - they don't sell them anymore so parts are pricey and hard to come by - some impossible.

That said, son #3 now has his temps and I've decided he can only buy American or Honda or Toyota. Looking at a several year old Ford Escape with AWD - not real sexy, but safe and functional.

I personally love a new car, and have leased my last two vehicles. I drive them three years and take them back! My DH is a drive to the ground guy, actually takes pride in how many miles he can get out of a car. I believe BMW includes all the maintenance on their cars so you have to factor in those fees you'll also have to pay on a different car that probably will need some work.

I'd keep the BMW, cancel the collision insurance on the Jeep since it's so old, and buy the girls a decent enough car that it will last at least 6 years. I think the 2010+ Fords are all good quality, and reasonably priced. I like the Ford Fusion. I also am a huge fan of Honda Accords and Civics. You should be able to find a fairly decent one for under $10,000.

Goodluck, teen drivers are not for the faint of heart.

My teen will be driving by early next year. I will get a new car and he will get to drive the spare car (my "old" 2010 car) as long as he has earned the right to do so, by keeping up grades, etc. It will be a very nice car for a teen, but I was in a major accident once and I believe the car I was driving made a big difference in minimizing my injuries and that is my first thought when I think of what my teen should be driving ... a large solid vehicle with the latest safety features.

Angc---re college--If I had it to do over again I would have had the kids pay for their own books. I think they would have been WAAAAY more diligent about selling them back or to friends to help pay for the next semester's books. I used to bug them about it but was never sure what they did with them....the class was over and I was giving them $ for the next semester so there wasnt a lot of incentive on their part to sell them ....my mistake!

Two of my kids graduated with about $15-17 in student loans. Taking them out was a help to us at the time as I had 4 years of two in college. We ended up paying half of the loans off for them....the youngest went to a much less expensive school so no student loans. I was a SAHM for 12 years then worked part time for 8 years and most of that $ went to my daughter's sport. We really didnt have much $ set aside for college. When second one entered college I went back full time and all my salary went to pay for college. Youngest graduated in 2010 and we have been redoing the house since we dont have any more college bills!

In order to reduce the cost of insuring my teenage boys I enrolled them in a defensive driving course offered by our County Sheriff. The class was free and met for 2 consecutive Saturdays.

It was all classroom learning, but it reduced the collision portion of their premiums. They also qualified for good student discounts. If there had been a convenient 'real' driving course I would have signed them up for that too.

Is your DH permitted to drive his company car for personal use or only for work? If so then you might want to reconsider and sell it. Most Jeeps, even older models have a decent resale value because they're valued by teenage boys, men and salvage yards for parts. They make great fixer uppers.

Take a look at your description of the Jeep: a weekend car, a toy, unsafe for new drivers, hard to maneuver, prone to rollover, bad mileage and it's only used 3,000 miles a year. How much would you save on insurance if you sold it? I know you said your DH loves it butfrom a practical view it just seems like that's the car that needs to go.