At the end of January, we bought a car (Daewoo Espero, 1995, 78000Km) from www.john4cars.com.au. In hindsight, its quite apt, that if you say ‘john4cars’ quickly enough, you get something that sounds a lot like john f***ers.

Although it was 11 years old, we figured that 78000 Km is very low, so, at worst, we would have have to repairs some minor problems.

At $5700 it was a bit more that we would have liked to have paid, but with a 3 month warranty, it seems like a good deal.

Well, after 4 months, it developed a slight tapping noise. After 5 months, I took it to the local mechanic, & at first listen, he believed that it was probably a bearing associated with one of the engine belts… nothing too expensive.

After 2 days of investigation, he couldn’t find the source. He suspected it was something within the engine.

So the options were:

1. Strip & rebuild (a specialist mechanic would dismantle the engine, find the problem, then quote a repair cost… if I don’t like the cost, I get the engine back (in pieces!)
2. Keep going, & the engine might last 1 week, or a few years.
3. Get another car

After much thought, we (me & my wife) decided to bite the bullet & get a new car, small engine (thus economical), with as much warranty as possible.

To pay for this, we decided to get a line of credit, with our house a collateral. We ended up ‘borrowing’ less than 25% of the house value, so it was approved easily.

After some searching, we narrowed the list to a toyota yaris (1.3) & a hyundai getz (1.4).

After test driving both, we preferred the Yaris, but the Getz had a $1000 price advantage. The Getz seemed much quieter and had a longer warranty (5 year/130,000Km). The Yaris was much nicer to drive & had many nice features.

In the end, Hyundai were prepared to give us $3000 to trade in the espero, while toyota wanted us to bring in the espero again, (they initially offered us a $1600 trade in, but ‘couldn’t remember’ what it was like.

In the end, I just couldn’t be bothered to take the espero back to toyota… I wanted to buy ‘now!’.

I also found that both visits to Toyota resulted in waiting around (either the saleman was busy, or they didn’t have the 3 door 1.3 car available for a test drive (despite them telling us that they had one)).

So despite being prepared to pay an extra $1000 for a toyota, the poor quality of the toyota sales team meant that we got a Hyundai Getz.

After that decision, it turned out that Hyundai couldn’t get any new 1.4 litre, 3-door getzes for another 5 weeks… Since I wanted one yesterday, we just upgraded to the 1.6 engine, and got one in just 1 week.

I also got a cheap satellite navigation system (with all the driving I’ll be doing, its a lot safer)… Just $398 from strathfield (www.strathfield.com.au)

Next week, I should be able to get some advertising stickers placed on the windows, and then I need to start paying off the ‘loan’ (I hate owing money to anyone).

Overall, the LOC (line of credit) is a good way to smooth out the cashflow ups and downs that I have with the business.

If you are looking for great advice on borrowing money, check out ‘paid in full home loans’ (http://www.paidinfull.com.au/)