Problem: My car was totalled in an accident - not my fault - received $5k from other person's insurance and no one was hurt. Thanks God!

Two Cars:

1) 2001 Explorer sport, 101,000 miles - Costs approximately $3000 to buy and 39/mo for car insurance. 18 mpg highway. AWD - purchase with cash.

2) 2009 Infiniti G37x- 40,000 miles - Cost approximately $27,000 (after tax and tags) to buy and 70/mo for insurance. 25mpg highway. AWD. finance entire loan at 2.24%. 1 year factory warranty and 2 year power train warranty remaining.

Keep thing I want is to have all wheel drive (AWD), because i live in area with a lot of snow.

The only debt i have is student loans - approximately $37k (interest rate approximately 4.8%). Monthly Gross income is $6500 - contribute 12% to 401k and just started roth IRA contributions.

Which car should i buy? Ford Explorer sport will not cause me to have additional debt, but I will probably have to buy a new car in 2-3 years. The infiniti costs more now - but I can take the insurance money put it toward my student loans and pay the 27k at a low interest rate. The infiniti will costs approximately 5k extra per year, however, this car hopefully would last me another 8 years because consumer reports ranks them high for reliability, and they are they type of car you can get 200,000 miles from.

Please let me know your thoughts. Thank you in advance.

Get the 4wd, you mentioned it's a requirement for your area due to snow, it's also able to be bought with cash.

Don't take on debt if you don't have to.

Get the 2001 Explorer sport. 101,000 miles is not much at all and if it is in a reasonable condition then it is priced at about $2,500 under the KBB value.

Definely get something you can pay cash for. 37k is a decent amount of debt, you need to get that paid off ASAP. The number one rule to getting out of debt is to stop acquiring debt.

I highly suggest you go the cash only route for with the explorer and set aside the rest of the 5k as an emergency fund. Then aggressively start tackling those student loans.

If you arbitrarily limit your choices to those two, then yes, the Explorer is clearly the better choice. If you think you'll need another new vehicle in 2-3 years, start saving now; the $2k can be the seed of that fund, but add to it regularly, just like a car payment.

Thank you everyone for your input!

I did not arbitrarily pick just those two cars. The infiniti is in the middle price-wise for newer cars i would potentially buy. Other cars i am considering are subaru legacy and outback, and some newer SUVs. The infiniti is more than the subaru, but less than the SUV thats why i chose it.

If anyone has suggestions on cars, please send them my way. Any additional thoughts are appreciated as well.

Just to throw it out there, I had to make this decision when I graduated almost 3 years ago now. Buy used, buy new, lease.

I decided on the lease and I think looking back I wouldn't change the decision. I got a 2010 Camry, 165/month payment with 1,500 down. 0.9% interest.

I drive a decent amount for my job, so I wanted a reliable car. So for the above price, I got a new car, decent gas mileage 25-30 (this is important, newer cars have better gas mileage, my guess is that Explorer gets like 12-18 mpg? Gas prices aren't going down, this is going to become a major expense). Haven't had a single repair to deal with. All for around 7,500 for 3 years.

For me it is the best of all worlds and at a cheap monthly price for a time when I have the least amount of cash flow, hopefully in my life. In addition, I have been saving 200/mo in an ING account to help soften the purchase price at the end of the lease.

Just an option, goodluck!!