Should I trade in my truck?

Question

I own an 05 Chevy Avalanche (well not really own, I am making payments) - the payments are about $470/month. I was thinking about trading this in for a used car (Accord, Camry, Maxima, Mazda 6 etc.) to essentially reduce my monthly pymts. I am approved for 7.49% rate from the bank. I will have about $3k to $4k negative equity that I may have to roll in to the new car. This car most probably be traded in after 3 years since I am planning to buy an SUV. My question is does it make sense to trade it in now or keep making the payments for the next 3 years and trade it in then. My truck takes about 15 mpg in gas.....

Answer 1

You need to look at this from a long-term perspective. Let's assume you have $4,000 in negative equity on the truck. If you buy a used Honda or Toyota, assuming you put nothing down and finance for 5 years, you are probably looking at a $300 per month payment. So you save $170 per month. Let's suppose you also save $50 in gas per month. This means that you save $220 per month. This means that you have about 18 months of this model to make back the $4000 that you are going to have to put into your truck to get our of being upside down. If that's worth it to you....go for it.

Answer 2

Assuming you have $4,000 negative equity, you're looking at about a $17,000 to $18,000 car to keep your payments where they're at right now. Anything more than that and your payments will Inrease. (Based on a five year loan). You can give selling the Avalanche yourself a shot, rather than trading it in. Even if you get an extra $1,000 for it, that's $20 less a month.

Answer 3

it won't be a bad deal ..........
if you find someone to ASSUME(with the bank, NOT with You) Your truck,and continuing with the payments.

You gonna lose less. and not a debt at all ,over the truck.


PLAN "B"........wait for three years.