What is better - financially?

Question

We own a 2001 jeep cherokee it needs to have to engine overhauled. The cost of the repair is $3000 - $4000. The car is only worth about $3000, but we still owe $6800. What makes better sense financially, repairing the car, or paying it off and buying a new vehicle?

Answer 1

Trade it in. I say that assuming that you don't have $3K-$4K in cash on hand to repair it, meaning that you'll have to credit-card the repair.

If you trade it in, you'll roll $3K-$4K of negative equity into a new car loan at a lower interest rate than the $4K you'll be putting on a credit card.

If you do happen to have the $4K on hand, then trade the Jeep in and put the $4K down on the new car to cover the negative equity.

A 2001 vehicle that needs an overhauled engine has more problems coming right around the corner. Start over.

Answer 2

Well, it really depends on whether or not you want a new car. Repairing and paying off will come out to about the same value, but you have to figure in the down payment on your new car, the monthly payments, and what type of car you are going to get. So if you're happy with your car, then just repair it...

Answer 3

Well if you pay it off, you will be out $6800 and you'll have a car that doesn't work. If you fix it, you will pay $3000 and get at least 3 more years out of it at a minimum. By that time you will probably no longer be upside down on your loan and you will have a lot more options.

Answer 4

Definetely Repair. It's an 01 and once you repair it, will run like new and last for a long time after that. Definetely better than just giving up and paying for something you're not using.

Answer 5

I would go to a salvage yard and buy a wrecked Jeep,

I called around and found 2 engines for under 1000 bucks.
Both have under 80,000 miles.

Answer 6

today, it is a 3800 loss
after repairs, it is a 7800 loss
I would get rid of it
Trade it in