Is it a good time to trade in a car after three years l have two more years to pay or wait until it is paid?

Question

Not sure if it makes sense to trade my car in now when I still owe two more years on it or to wait until I have completely paid for it and then trade it in. Is there an advantage or disadvantage of trading in a car that you still owe on? thanks

Answer 1

Sell this car immediately. Pay off the loan. Take whatever cash you get from the sale, add in some savings and go buy another car for cash. Then have your bank automatically deduct your old 'payment' and put it into a Savings account. When you have enough cash saved plus the value of the current vehicle THEN go pay cash for a better car. This is how intelligent adults buy cars. They pay CASH! People who borrow money to buy cars they cant afford are just little children in Adult bodies yelling 'I WANT IT NOW!!!'. If you have to borrow money to buy it you cant afford it!

Get out of that car loan payment NOW!!! Dont want to sell it? Take a second job or have a garage sale and pay it off in the next few months!

Answer 2

It all depends on how the car held it's value. In most cases, after three years, you owe more than it's worth. That will have to either come out of your pocket or thrown into the new loan. If you plan on going through cars every three years, you should lease, not buy. So to answer your question, without seeing all of the numbers, I'd have to recommend that you wait the two years, and trade it when its paid off.

Answer 3

It just depends... :)

On paper, the best thing to do is NEVER buy a new car. The deprecation of that new car is most dramatic the first time it drives off the car dealer's lot.

The next thing to do is keep the old junker (as long as it doesn't cost too much to own) as long as you can. Sure, you aren't stylish but you get what you pay for. The worst thing is to think you are saving but it costs too much. The junker can cost more than the new car depreciation.

Most cars can go an easy six years before they cost too much but there are lemons out there. If you think you have a lemon, sell it when the warranty is up.