I recently bought a new car in May (2006 Honda Civic). I am paying $300 a month right now. I've recently been looking at my financial picture and have decided that if i sold this car, and bought something around $2500-$3000 I could pay off my student loans quicker. Is this a bad idea?
2006-08-23 09:21:38 · 9 answers · asked by swabby 1 in Cars & Transportation ➔ Buying & Selling
According to KBB the car is worth around 17750 to a private buyer..plus they are high in demand. My payoff is a little over 17K. Still a bad idea?
2006-08-23 09:36:43 · update #1
I hear you on the student loan thing, Swabby, but let's do some quick math.
Here's what you're spending now:
$300/month=$3,600/year.
$3,600/year=$18,000 at the end of 5 years
at 5 years, you have a paid-for Honda that can easily last you another 5 years without a payment, and which should be worth at least $9,000 the day you pay it off, putting you $9,000 behind what you spent to have a decent, reliable car.
Here's what you're proposing to do:
Buy a $3000 clunker that will last you two years, and be worth nothing when you get rid of it, followed by a replacement car every couple of years. Forgetting the fact that you'll inevitably spend much more on fuel, and that you'll have to go everywhere in a clunker, you'll go through 2.5 of these cars over 5 years, putting you $7,500 behind what you spent.
So, in reality, your plan is only going to save you $300/year for five years ($1500 total). The smart money on this one is to keep the Honda for ten years (at least you bought a car that will last that long without huge repair bills), and go without a car payment for the second five years, making it a virtually free car.
Keep the Honda.
If you really want extra money for your student loans, you should look at the things you spend money on that go away when they've been used. Cable TV is often a $600-$1200/year throw-away. Daily or frequent Starbucks is about the same price range. Bar-hopping, even only once a week, is easily another $1,200 annually. Ordering pizza once a week, rather than making a high-quality frozen one from the grocery store is over $500/year. These are just a few examples...examine your finances and you'll find more money than you ever imagined.
You need a decent, reliable car. Find your budget cuts elsewhere.
2006-08-23 17:42:38 · answer #1 · answered by Cincinnati Food and Wine Guy 3 · 1⤊ 0⤋
No-- But you may spend more money on fixing an older car up. Then you will be in the same situation. I wouldn't trade a car in for at least a year. You won't get as much out of it. I have Honda Civic too that I've had for about 6 years and it's a 1997. It's an awesome car.
2006-08-23 09:30:14 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Look at it this way- If you were to sell the car, couldn't get enough for it to pay off the car loan. Because you are still upside down on the financing you would end up having to come out of your own pocket to make up the difference between what you sell the car for and what you still owe on it. Otherwise your local motor vehicle bureau will not release the title. That extra money that you have to come up with will make a whole lot of student loan payments. Its best to just keep what you have and keep it the way you have it. If you want to pay the student loans faster get another job.
2006-08-23 09:32:42 · answer #3 · answered by Joe K 6 · 0⤊ 0⤋
Bad Idea. If you sell it now you will loose lot of money. You should not buy a new car in the first place. Any way, you are better off hanging on to the car if you can continue to pay the loan. Try paying of the loan in 3 yrs or less...and then plan to sell the car.
2006-08-23 09:30:40 · answer #4 · answered by bk1366 1 · 0⤊ 1⤋
Yes, not a good idea now it is a done deal, and student loans are low interest, so pay them off last, pay off higher interest bills first.
2006-08-25 20:18:12 · answer #5 · answered by Janice 10 7 · 0⤊ 0⤋
in case you're in great Britain, sure, this is!! If the vehicle is on finance, this is thoroughly owned via the finance enterprise, till the debt is truthfully paid off. consequently, it can not be legally offered till the finance is cleared. The regulation might perhaps be diverse interior the united statesA., yet it is Y!A U.ok. and eire, in spite of everything...
2016-12-14 10:31:12 · answer #6 · answered by Anonymous · 0⤊ 0⤋
No, go to Kellysbluebook.com and find out what your car is really worth so you don't get screwed.
2006-08-23 09:27:37 · answer #7 · answered by Anonymous · 0⤊ 1⤋
You are not going to get close to what you paid for it, so really, you are stuck with it for a long time.
2006-08-23 09:27:02 · answer #8 · answered by strawbrrybabe 3 · 0⤊ 1⤋
yes
2006-08-23 09:23:45 · answer #9 · answered by roadrunner426440 6 · 0⤊ 2⤋