Downsizing my car - need advice

[Jilian]

So DH and I bought a brand new Honda Odyssey last year. We got a good price and also put a trade plus $2,000 cash as a down payment. We took out a 6 yr loan and pay $354/mo on it

Cut to a year later - gas prices are high and everything else is going up. We NEED to cut our expenses desperately and have very little room for cuts. We've already dropped the splurges. We're now considering trading in the van for a smaller, more efficient vehicle like an Accord or Camry. We have 2 kids in Marathons. DS1 will be going into a booster seat soon. It will cut our car payment AND save us on gas and insurance. We'll save at least $150 per month by doing this.

BUT, we are going to get nailed on our trade. We still owe $19,500 and can get $20,500. It makes me sick that we lose so much "equity". We essentially put $7500 down on the van between our trade and cash. Should we just suck it up and trade to lower our bills and cut our losses? We don't need the extra space that the van provides, it was more of a luxury.

Also, we are torn between buying another new car and a used car. Accords and Camrys seem to hold their value so well that we'd likely pay only a few thousand less for a 3 yr old car with 20,000+ miles. We're scared of taking a 5 yr loan out on a car that could potentially need work before the loan is paid off, KWIM?

[CarrieMF]

We have a 2000 Camry that we bought in 2002. The only thing we've needed to do to it is tires.

[deditus]

Maybe try to sell it outright instead of trading it in?

[1growingsprout]

Originally Posted by emgremore

Maybe try to sell it outright instead of trading it in?

you almost always get more $$ when you sell it outright.

[Jilian]

Originally Posted by 1growingsprout

you almost always get more $$ when you sell it outright.

But minivans are not selling very well right now because of the price of gas and selling outright is tricky when you still have a loan on the vehicle. I'd also likely have to spend some time without a vehicle at all after I sell and before I buy a new vehicle.

Is it easier than I think to sell a vehicle with a loan on it? How would the buyer get the title and plates? Wouldn't they have to pay my loan off first and then wait for the title to come?

[marimara]

Hyundais are cheap and come with the BEST warranties out there. Look for a good deal on a new one, shop on the last day of the month. Get comparison prices, go prepared. I just bought a brand new Accent for 12k. Love it!

[Om Girl]

Hey mama...Hugs!

You'll get the best price if you sell outright, but you'll have to be patient for a buyer with either cash or financing.

If you trade, you'll lose some equity and that's tough but if it helps your family out that's the best.

If you trade I'd buy used, you'll get a better finance rate and will be covered under warranty, plus buying new in this situation will give you a better trade in value than a used car at a lower price point than your trade. IYKWIM?

[Jilian]

Originally Posted by tumblingstar

Hyundais are cheap and come with the BEST warranties out there. Look for a good deal on a new one, shop on the last day of the month. Get comparison prices, go prepared. I just bought a brand new Accent for 12k. Love it!

Thanks for the advice but I'm pretty set on either Honda or Toyota. I've driven Honda vehicles for the past 10 years and have never had a problem with them so I'm really leaning towards another Honda. Hyundais don't hold their trade value very well at all and that scares me.

[kdabbler]

I'd really try to sell it privately. Even if you sell it at a loss, the price you get on it will most likely be better that what you would get as a trade in.

FWIW, we own a 1997 Toyota Camry that had a couple dents and dings for $5000 cash 5 years ago. It has >156k on it now. This weekend, we had one Marathon and two Graco boosters in the back seat. We also checked the mpg for a recent 125 mi round trip and got a little over 29 mpg for New England city to hwy driving. For us, it's not a question as to what car we're going to buy next. Our next will most definitely be a Camry.

[GwendalynsMommy]

We have an '06 Accord that we bought brand new 2 years ago. We went into car shopping planning on buying a used one but like you said Honda's hold their value so well that the ones that were 2 or 3 years old were $1-2K less than the brand new ones. By the time you factored in the better interest rate we got for a brand new rather than used we would have payed much more overall for a used one.

It wouldn't hurt to just list the van on Craigslist or run an ad in the paper for a few weeks just to see if you get any possible buyers. Even give it a month and then if after a month you still have it then go and talk about trading it in.

[ChattyCat]

Dh is still driving his '99 Accord, which he bought new. Unfortunately, it's a v6, so it's not the best on the gas mileage, but he paid cash for it, and so far all we've replaced is the alternator (about $350) and we just had the timing belt replaced (routine maint. for about $400). Of course, we've replaced tires, but that's to be expected with any car. I completely understand you wanting to stick with a Honda or Toyota.

I would try to sell your minivan outright for a month or so, before giving up and trading it in. You should get more for it, even in this market. People are still buying minivans. Maybe not as many, but a late model, well cared for Odessey should still sell.

Also, have you thought about a Civic. Yes, they're smaller, but the price will be about 5K less. It could significantly impact your payments, and maybe allow you to take out a shorter loan.

[PassionateWriter]

i would really crunch the numbers here. you are basically saying you are going to lose $7500 by trading it in? im presuming your car payment will be about the same (your savings will come from the gas).

if you save $150 a month, thats $1800 a year...but you are loosing $7500 in order to do so?

im all for downsizing vehicles and saving gas but it seems like you are looking at finances here more than fuel economy (hence the forum) and im just not sure trading in your current van for a car is really a wise idea financially.

[maciascl]

I'd do it in a second if I could get even just a payoff on our van, but we are about $6000 upside down on it : I hate buying cars & will never get suckered again like we did with this van!! $150 a month is alot of money, plus concider the lesser amount of money you'll be giving to the big oil companies...that right there is enough for me

[jentilla]

I agree with teh pp about just keeping it since I would hate to have lost that much cash. Can you just cut back your driving? I count every mile to teh places I go so I can double up trips, etc. I budgeted 2 fills ups a month $150 and we will get by on that.
We actually just traded in a 7 yr old Camry with 122,000 miles for $3,000 and bought a 1 yr old minivan. We need the space though, we have a Regent and a Boulevard plus another seat come August, but we looked until we found a deal and our loan is 4 yr at $263.00 a month so we will pay off in 24 months.

[Jilian]

It is a 2007 Odyssey w/ 17 k miles. I could probably easily sell it in a private sale because it is in excellent condition and even if I sold it for $23,000 that is still about $2,000 less than a dealer would sell for and I'd make $4,000.

Downgrading to a used Accord or Camry would lower our monthly payments by at least $100/month AND save us at least $50/mo in gas. Driving less isn't really an option because DS starts montessori kindergarten next year and it is 15 miles each way.

We get the same interest rate on both used and new cars. DH is a member of the pentagon federal credit union and they offer 4.25% on all cars for a loan term of up to 72 mos.

I drove a Civic before DS1 was born and loved it. Great car! I'm just not sure it would fit our 2 marathons (one rear facing). I've also heard that it is very hard to get a 3rd carseat in the back and we do plan on having another child sometime in the next few years.

Maybe I should look into a private sale and throw an ad out there just in case? Does anyone know how to go about selling a car that is still on loan? Is it tricky to get everything transferred over and the loan paid off?

[phatchristy]

Wow, that is a huge amount of money to lose. I personally would prefer not to have a minivan, we were gifted one a couple of years ago. If we were going to stop at three kids definitely I would go with a smaller vehicle .
Our model is the EX w/dvd one that has the variable cylinder engine (Odyssey) so it is slightly better at gas mileage than the lower.


http://usnews.rankingsandreviews.com...rucks/compare/

Here is a good comparison from US News and World Report. You can compare your car to what other cars you're interested in would get for mpg. Unless you're going to move from the minivan to a compact/sub-compact/smart car, it's likely the difference in mileage won't be as great as you think. Plus, there are some safety issues that some people are concerned about when it comes to smaller cars.

But, we're lucky. Our home is in a great location and we don't drive far. The two grocery stores we frequent are about a mile away. DH has a smaller car that he commutes back and forth for work with. We seem to use it the most when relatives come over and we have to pile 6-8 people in the car!

One thing I'm guessing about, it seems that minivans replaced station wagons back in the 80's....I'm seriously wondering if now that MPG is becoming an issue if you're going to see companies bring back the station wagon. Seriously, some of those station wagons could seat 9 people! We had one growing up .

[WendyC]

So I am doing the same thing, except I am going the drastic route. We bought a 2004 Caravan last year and the gas is killing me. Luckily we own it outright, so there is no money lost on us trading it in. Strangely though the car I want to trade it in for, a 2000 - 2001 Honda Civic HX - costs more than the van! How did that happen??

Yikes. Its worth it though right?