We have a kid, and getting stuck on the freeway during rush hour is not our idea of fun. So getting a really old, probably reliable car that might crap out on us in the next few years was not our goal.

A good, reliable car for $2000 will be hard to come by. You can find them. I’d stick with Japanese – Honda, Toyota, Nissan.

A good, reliable used car such as above-mentioned ones were available for about $6000-7000. These were 2001-2003 models.

90% of the cars for sale locally (used) are 1998 or earlier. A little too old for us. We like to drive our cars for more than 10 years. I think the economy is forcing people to sell their 3rd or “extra” cars.

Loans if you have decent credit are around 2.5 to 3% from Honda, for a new car. (We paid cash, bought new, and are hoping our 3 year old can take this car to college.)

As far as $10,000, that’s about what you might end up paying for a dealer-certified used car that’s a few years old. Not necessarily a bad thing either. You are paying a premium, but often get some warranty. Our last (wrecked) car was of this variety.

good luck.

Being a homeowner, in this economic environment, how many house payments could you make if you were laid off?

Does that put a ball of fear into the pit of your stomach?

It should.

Pile up cash right now, until this economy balances out. I wouldn’t buy anything optional and repair/maintain what I have. Holding pattern.

Then when happy days are here again, you have a big pile of cash and can make decisions about where to allocate it–loan, car, savings, a combo platter.

In 2007-08 I was going through cancer treatment and my insurance company was kinda flaky so I was afraid of what kind of bills I’d end up with–or if I’d be in bad shape for long enough to go to LTD (60% of salary). So I piled up cash. Being sick and at home a lot reduced my gas, groceries, travel, entertainment spending. It all went to savings. I was a savings maniac. I was on the DR TMMO forums with a signature file status report on my savings balance, and I was tracking for the moment when the balance reached the amount of the student loan balance plus one month of EF. That moment coincided with completing treatment, working steadily, and the insurance company finally getting their act together and paying the bills. On March 19, 2009, I pulled the trigger on William D. Ford and kissed that student loan goodbye. No more debt! Never again!

I set my ambitious 2008 goal as getting a six or at least a three month FFEF in place, even though it seemed a bit of a stretch. Well, it happened, though not how I planned.

Now I have a four year FFEF and that is very soothing in this economy. Half of all American adults believe it’s possible that they’ll be laid off. My job is secure except for the fact that my workplace is state supported and the state is having an incredible budget shortfall crisis–so really, anything is possible.

When happy days are here again, I will scale back to a six month FFEF and decide what to do with the other three and a half years. LOL

I vote pile up cash and hunker down!

The car loan is another matter. I think I would still top off your emergency fund and after that, make your car loan a bigger debt priority than student loan debt. Unlike a car, your degree does not depreciate to be less than the value upon graduation.

I hope all is improving!

This isn’t going to be a small recession. I know you hate that debt like nothing else, but you need to consider that there could very well be worse things headed our way.

I really understand how you feel – the student loan is my very last debt, too.