Use nest egg to buy car?

[WilliamShatnersPants]

I've got some shares that I've had since a child, so have some emotional attachment to them. It's the only real emergency fund we have, aside from some drawdown we have available on our mortgage.

DH and I are both high earners, but conversely we have a hefty mortgage.

We desperately need to get a new car (not new new, but looking at 2012 models). The purchase price of the one we want is around $35k (not in the UK), of which we'd need a loan of $25k to buy.

This is the same value as the shares I have, so am debating selling them to fund the purchase rather than raising a loan.

At the moment we are overpaying the mortgage by approx $500-$1k per month, which would otherwise be used to pay for the car finance.

When I write it down like this it's a no brainer, but I am very nervous about using up the emergency fund for what isn't really an emergency!

Yes I know we could get a cheaper car, but this would be a long term car and we really need a 7 seater. We've had a falling apart at the seams car for long enough!

Any advice?

I'd sell the shares, and stop the mortgage overpayment for a while to get a level of savings behind you.
Or, can you withdraw some of the mortgage repayments to buy the car, and then carry on overpaying?

Personally I wouldn't sell them to buy a car. The car will depreciate every year and you will eventually have nothing - no car, no shares and no savings. Instead of buying a new car you need to look at how you finance your life to make it more affordable.

The mortgage overpayment goes into a revolving credit account so acts as our easy access savings.

The shares were performing well, but have stagnated recently. My theory behind it is that the shares aren't really growing at the moment, but the car finance would be around 10%, and the mortgage redraw would be at 5%.

Surely it's better to use the shares and then build up the value again against the mortgage?

If you used the shares to buy the car, are you then left with no emergency funds? In which case, what would you do if there is then an emergency? Say one of you has an accident and couldn't work for a couple of months, could you deal with that?

I'd keep the shares and stop the overpayment, then use the money I would have used for overpayments to finance a car loan. Keep the shares for something more meaningful, memorable or long lasting. I had £2.5k shares invested by my GF when I was a baby. I spent £1k on a custom build bike (gf and I both cyclists) and used the rest to take 3 months unpaid leave with my DC at the end of maternity leave. I think my GF would be very pleased with what his investment allowed me to do.

The emergency fund would be the revolving credit we have. At the moment we've got about $15k we can easily access on top of the shares.

Both our jobs are very secure, and we have full mortgage protection insurance against accident/illness. Even if one of us lost our job, there should be no problem getting a new one - both DH or I are contacted fairly regularly by head hunters / rival companies in our industry.

The shares were a scheme that my mum set up when I was a child, with the intention to use them for a house deposit. My mum was over earlier and she told me to sell them to buy the car!

Shares should never have sentimental value! If they're in a single company that's a high risk investment strategy as they could easily halve in value overnight. I'd cash them in and use your mortgage account in an emergency.