WWYD? Sell car or wait it out?

[redvlagrl]

We have a car payment of $422 a month. We have around $5000  (paid off june 2012) or so left on it and it's worth about $9-10k I would say, so def right side up.

I would like a different car (bigger) and we both hate our car payment.

We are on the DR plan and we were going to just sit out the loan until it's paid and then save for a new to us car.

BUT should we just sell ours now to get rid of the payment, buy a used car with the difference and start putting, say, $300 in a car fund to upgrade in a couple of years?

We have NO idea about cars so are scared to get ripped off or buy a lemon.

We're not totally reliant upon our car except for daycare. Car breaking down would  not be the end of the world.

WWYD?

[trekkingirl]

selling it seems like a good idea to me, but I'm no expert. I'm curious to see what others suggest in your situation. I'm $5000 upside down or I might consider selling my car to jump start the debt snowball. Do you have any friends who know anything about cars? Maybe they could help you shop for a car?

[redvlagrl]

We don't know anyone who is a car person, so we're a bit up the creek in that dept. In some ways it just seems silly to trade a reliable vehicle for one we don't know anything about...but then I think that the payment is another $5k, so it's not comparing apples to apples.

[nd_deadhead]

Try Edmunds.com for lots of car buying advice, and info on specific used vehicles. Start looking around locally for a vehicle that might suit your needs.

Remember that your car has several values - trade-in value (the lowest), the price if you sold it to a private party, and the price if you bought it from a dealership (the highest). Your car might be worth $9-10K if you bought it from a dealership, but they might only give you $6-7000 on a trade.

Trading in your car for a different one at a dealership is by far the simplest - and the most expensive. You can get more for selling it yourself, but there are risks involved - having people come to your house to look at it, making sure you get paid, advertising expenses.

By the same token, buying a used car from an individual usually gets you the best deal, but again with risks. I would never buy a used vehicle (from a dealer or an individual) without first having it checked out by my trusted independent mechanic (where I live this costs $90).

Good luck!

[redvlagrl]

Thanks for the info. We are leaning towards doing it. My $9-10k estimate is based on ads from private parties.

Do you know if it is possible to trade-in a vehicle that's worth more than the one you want?

[mnnice]

Originally Posted by redvlagrl 

Thanks for the info. We are leaning towards doing it. My $9-10k estimate is based on ads from private parties.

Do you know if it is possible to trade-in a vehicle that's worth more than the one you want?

I am not sure of the possibility of trading in a vehicle worth more than the one you want to buy, but I am pretty sure it wouldn't usually make sense.  Only getting  the wholesale/trade in value on the more expensive car and then pay the retail cost on the cheaper car would eat up most of your cost savings. 

IMO, you would be way better selling your current car in a private party sale and then buying a cheaper car also private party with the proceeds. Or alternatively, buying the cheaper car first (either with cash or a loan) and then paying off your loan (or loans) when you sold the more expensive car if you can't get by briefly without a car.

As for the orginal question.  If you current car fit your current life I think I would just pay it off and drive it.  But since it doesn't I would consider you plan.  I think because you can have sort of a low level search and afford to be picky about another car you could find a reliable car for cheap if you didn't need it to materialize instantly.  The risk is that you have expensive EF depleting repairs.  What is your current ER funding?  If it's tiny I would say no.  If it decent I would go for it.

[redvlagrl]

We have the BEF, and are working on the snowball. The thing is that we don't have any CC debts, just student loans. And our budget balances fine each month even with some extra snowball ($1000 this month). i guess it's just me being greedy and wanting to get it paid off faster.

I talked to my Dad last night about it and he thinks we should just keep the car because if we sell now we will sell when our depreciation will be the highest and if we just sit it out another year (and like I said we aren't drowning) we will have 'free' motoring and a reliable car.

The bigger car thing is just a want more than a need. we have a mazda 3 but it would be more convenient to have something at least with a hatch or with more seats.

Thanks for everyone's input!