should we get a new car?

[wish]

Ok, here's the deal.

We currently have a 2006 Toyota Sienna that we pay $475/mo for, we still owe $18,800 on it and should have it payed off by 2014. Its more than we can be spending on a car payment, as much as I hate to admit it.

A local dealer has a special: they pay off what we owe on our car, even if it's more than it's worth, we buy a car from them.
They are offering 0% for 60 mo a few kinds of Toyotas.

I'm looking at a new Carolla, that would cost $302/mo for 60 mo at 0%
Or they have a Camry hybrid that would be $340/mo for 60 mo at 2.9%

Am I just kidding myself that this would be an ok deal?? I know we would have to pay taxes, register the car etc, but in the end wouldn't we be saving almost $175mo?? (that could go to our debt)

Help me out
thanks

[thriftyqueen]

Do you need the minivan or can you get away with a car? I guess if you are in a financial situation where you can't pay the payment, I would go for it. But make sure there are no "hidden" terms in the offer.

[wish]

We can make the payments, but we are really "living beyond our means". We have been having more go out each month than coming in. We have gobs of debt. We are committed to making things better and looking at all areas in our life where we can make changes. I talked to a dealer on the phone to try and get all the info I could. I think I will check out the car to see if I like it and find out more details.

[mommyto4grits]

The part of the deal where they will "pay off your loan whatever the amount" is a hidden fee. They will pay it off, but they will roll that "upside" down amount into the new loan. So you need to take that into account with the new payment.
Also a corolla is really small, are you going to be okay with that for a few years? BTDT- is why I ask. We went from a big SUV to a Highlander, I hated it!

[MyTwoAs]

Originally Posted by mommyto4grits

The part of the deal where they will "pay off your loan whatever the amount" is a hidden fee. They will pay it off, but they will roll that "upside" down amount into the new loan. So you need to take that into account with the new payment.

Ditto this, they'll pay it off but they don't tell you that they roll the deficiency over into your new loan so that $300 payment is more with the negative equity from the first vehicle added in. Did they already pull your credit report to verify that your scores qualify for the 0% interest?

I feel you on wanting to lower your monthly outgo so you can pay down debt - I'm working on the same thing. Good luck!

[Drummer's Wife]

My experience is also that they will pay off your vehicle, but will roll the costs into the new loan. The payments might be slightly less, but that's because the loan is spread out longer, yk? We did this, b/c we needed a bigger vehicle to fit our family - but it really almost felt like we were paying for two cars and only had the one, if that makes sense. It seems like you are getting out of an upside-down loan - except that unless you also had a huge downpayment and got a really, really good deal on the new car - you are still going to be upside-down on that loan.

I would see about refinancing, if possible. I can't imagine having a car payment that high.

[Cheshire]

From a quick search on cars.com you're not that upside down in your loan on the Sienna (could be a lot worse). Looks like tops a couple thousand.

I'd sell the Sienna, find a personal loan to cover the difference and then find the cash to purchase a much cheaper nice, used van (if you still need it for the size). I mean cheap - try to keep it below a few thousand.

Get rid of your car payments as fast as possible - pay off the personal loan and, if you have to borrow for the new van, pay it off, too. At $475 a month you can have $5,000 paid off in under 11 months.

Then, turn that payment on your consumer debt and knock it out. After you're debt free put the money into savings to save up to pay cash for your next vehicle purchase.

We haven't had a car payment in five years now and it is so NICE. We have decent used cars and try to take good care of them so they'll take care of us. We had to have $1,000 worth of work done recently but since we haven't had a payment in five years that averaged out to $16 a month.

Going this route (selling it yourself, taking out a loan for the difference if you don't have the cash to cover it, buying something a lot cheaper) will be hard but it will be worth it. There is a light at the end of the tunnel and you can be out from under this in less than a year. Keep imaging no car payment, remove it from your budget and see what you can do with the money you're spending now - keep that image in your head as you go through the process to become debt free.

Best wishes!!!

[wish]

Well you guys were all correct. It didn't turn out to be the deal I thought it would be. They wouldn't pay off my whole loan, just the worth of the car, which was $12,200. So that puts about $7000 upside down. So no new car, but chesire, thanks for the ideas, going to look more into that!!!