Say you have a car that's paid off and you could get $15,000 for it. And if you sold it, you could pay off your credit card debt in full. Then you'd go out and buy a new car for around $300 a month (cheaper than what your credit cards cost per month!). Would that be a wise decision?
2007-07-04 14:54:48 · 9 answers · asked by Anonymous in Business & Finance ➔ Credit
I would say you should sell the car for $15,000. Buy a good, well-running used car for 6 or 7000 cash, pay down your credit cards with the balance and then, since you don't have a car payment, put ALL of that money on your credit card bills until your card is paid off.
Why go into more debt when this would pay you down much faster and when its paid off you won't have a car payment and the car would probably be worth the same as the "new" car with cheaper payments would have been.
2007-07-04 15:04:58 · answer #1 · answered by Anonymous · 2⤊ 0⤋
You didn't say how many years you would be paying that $300 a month. I would say, yes if you were sure you could get $15,000 for the car and that would be enough to pay off your credit card debt, got for it. But if you will be paying $300 per month for 5-6 years that might end up being a bit of a burden for you. It might be wise to consider some other options on the car loan...say a larger monthly payment but paying it off sooner. Depending of course, on what the car loan interest rate is, you would save a lot more money that way.
2007-07-04 15:13:53 · answer #2 · answered by Sicilian Godmother 7 · 0⤊ 0⤋
It depends.
Having a car that's already paid off is a very much great thing to have. Although, if you can't afford your credit card payments now, and believe you can sell your car for that much (unless you already have a buyer lined up, and depending on what type of car you have, good luck), then I would say do it, as long as it means you can pay off your credit cards, and are able to get another loan to purchase a new car. Car loans are generally low (unless you get screwed by the bank or the dealership).
Of course, have you ever thought about getting a debt consolidation loan? This loan will combine all of your credit cards, and pay them off for you, so that you only have one payment a month to make. Depending on what the interest rate is for that loan, it might be a better option over selling the already paid for car. Then again, if you've already tried this option and were denied, then I would probably go for the car.
If you decide to sell your car, make sure it's clean, maintained, and check it's blue book value to determine what the going rate is for that car (www.kellybluebook.com). Since you didn't give any info as to what type of car you have and year and mileage and stuff, it's impossible for me to say whether or not selling it would be the better payoff.
Good luck!
2007-07-04 15:21:46 · answer #3 · answered by DH 7 · 0⤊ 0⤋
You are in a vicious cycle. You want to consolidate debt, but probably no one is goingtop loan you money until you have a lower debt load. First thing you must do is stop using any credit cards. That will stop the bleeding some. Secondly since you have multiple debts, you ned to prioritze them. If you owe family money, you are going to have to tell them that you cant pay them right now. Explain your credit situation, and let them know you will eventually pay them, but cant now. It wont be easy, but you must. Your family cant ruin your credit and bankrupt you, but your credit card companies certainly can. You need to know what you new credit card rate is going to be. If you go from 0 to 12.9 or even 18.9%, you are going to be screwed. You also need to get some discipline. You not only need to stop buying things you dont need, you are going to have to cut out all luxuries you afford. Such as eating out, even buying your lunch, when making it at home will save you $3-$5 a day. (remeber spending $5 a day less is $1250 a year for the work year. If you cant make a plan, then go to a free credit counselling service. (do NOT go to one of the private 'not for profit' services... find out what your state of community offers). Good luck.
2016-04-01 08:04:15 · answer #4 · answered by Anonymous · 0⤊ 0⤋
well it depends on a few things such as, what's the interest rate your paying on the credit card and how much it is costing you right now for your current car and the cost of having your new car.
Since it's a credit card we're talking about, i'm assuming the interest is at least 14%, so its a good idea to get rid of that issue if we're looking at the long term.
As for the car, how much is the current insurance and gas and whatever expenses you would have to pay. Once you figure that out, see how much it would cost for the new car and I would pay close attention to the gas efficiency since gas is around 3 dollars a gallon roughly.
With that said, good luck with your decisions
2007-07-04 15:09:17 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Why don't you get another credit card which offers you interest free terms for the next 6 to 12 months - transfer the amount outstanding on your current credit card to the new card - pay it off as a number one priority. Thus getting rid of credit card debt and still keeping your car. The key point is that you will need to sacrifice a number of things to reach your goal in the short time - to keep your car, eliminate credit card debt and look towards a fresh start. Good Luck.
2007-07-04 15:06:16 · answer #6 · answered by Crazii 1 · 0⤊ 1⤋
It depends on the interest rate on the new car loan. If you were paying 18% to the Credit Card Company and the new car loan is 2.9% - it is a good move.
2007-07-04 15:00:09 · answer #7 · answered by fatsausage 7 · 0⤊ 0⤋
Yes I would say it would. Might be the only to get rid of the cc debt, then don't get in the same place anymore, play it smart with your credit.
2007-07-04 15:26:22 · answer #8 · answered by book writer 6 · 0⤊ 0⤋
yea that is a wise thing to do
2007-07-04 15:02:59 · answer #9 · answered by Anonymous · 0⤊ 0⤋