What would you do in my shoes? (Car question)

Discussion in 'Bad Dog Cafe' started by naveed211, Sep 28, 2021.

  1. rstaaf

    rstaaf Tele-Afflicted Gold Supporter

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    The general rule I follow is to pay down higher interest rate debt first.

    If you have one more credit card, that is likely a higher interest rate than your car loan.

    I would start there, but that is just me :)

    Once you get the cards out of the way, increase the amount you are paying monthly on the car. There are plenty of calculators out there where you can set a time frame you want to pay it off and it will tell you what to pay per month...
     
    Last edited: Sep 28, 2021
  2. boris bubbanov

    boris bubbanov Tele Axpert Ad Free Member

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    Pay the credit car off and just stay with the payments on the vehicle. Even the most savvy car buyers/sellers tend to lose some money every time they buy one thing and sell another - if nothing else the State of Iowa is gonna take a bite out of you. You paid state sales tax and now you wanna throw that money away? Don't do it.

    The only time I think selling can make sense is if someone made you an out of this world offer - or, if you were feuding with someone and feared the vehicle would be set afire or something like that. The barn door was open and the livestock are long gone - way too late to be looking to get them babies back.
     
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  3. naveed211

    naveed211 Friend of Leo's

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    Thanks everybody. Lots of great perspectives.

    I’m thinking I’ll keep chugging away on the credit card first, and stick with the car I have.
     
  4. oregomike

    oregomike Tele-Holic

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    This is literally the worst time to buy a car. I'd stay put, or you'll get doubly jacked.
     
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  5. Controller

    Controller Friend of Leo's Silver Supporter

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    Not a bad plan considering we're just a bunch of musicians. Now ask us if you should buy another guitar....
     
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  6. drumtime

    drumtime Tele-Afflicted

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    I would add -- once you pay the card off, cut it up and don't get another one.
     
  7. rstaaf

    rstaaf Tele-Afflicted Gold Supporter

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    That is sound advice for someone who cannot control their spending, but having credit cards and using them with moderation is better for your credit rating.

    I have multiple credit cards, but I only carry my debit card on a daily basis. Keeps me from impulse buying on credit.
     
  8. drumtime

    drumtime Tele-Afflicted

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    All true, but a card is not necessary for building credit, and it's a big risk for a lot of people. Sure, using a card and never carrying a balance is good in theory but that's not how they're used in far too many situations. Once you get into that interest cycle, it's harder and harder to dig out. I would still advise someone who is in enough debt that they're rolling old loans into new ones to stay away from credit cards.
     
  9. rstaaf

    rstaaf Tele-Afflicted Gold Supporter

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    You are a faster typist than I am an editor :) I added to my post the point that your advice is spot on for those that cannot control their spending.
     
  10. Honga Man

    Honga Man Tele-Afflicted

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    Used Honda Civic or Accord

    -or-

    Used Toyota Corolla or Camry

    Buy 'em around ten years old and with maybe 125,000 miles on them. Keep them as long as they're reliable and look decent.

    True stories:

    I bought a used Camry and drove it for nine years. Sold it with 220,000 miles on it. I replaced it with a nine-year-old Accord that had 139,000 miles on it. My father, a lifelong American car owner, thought I was crazy to buy a car that old. I kept it for eleven years and sold it with 256,000 miles when it was twenty years old in 2019.

    Neither car cost me much money beyond tires, gas, oil changes, and one timing belt change for each.

    And what did I replace the 20-year-old Honda with? A ten-year-old Honda, of course. Now it's twelve years old and has 105,000 miles. I'll drive it as long as I can.

    These aren't exciting cars, but they let me keep a few bucks in my pocket to do fun things with my wife and kids instead of making car payments.

    And, for what it's worth, my wife's Honda (her third since the 1988 Accord she had when I met her) has over 200,000 miles now and still runs great.
     
  11. bgmacaw

    bgmacaw Poster Extraordinaire

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    Those are around $10k, probably more if they're nice and have lower mileage, in today's crazy used car market. Cheaper ones are likely to have very high miles or have issues, like the previous owner never having the oil changed.

    People are also hanging onto them more not only for their reliability (as you mentioned) but because of comparable replacement vehicles are expensive and hard to find. Instead, you'll find high mileage Kias, Hyundais and malfunctioning Chevy Sonics like my previous vehicle.
     
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  12. dogmeat

    dogmeat Friend of Leo's

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    P.S. all new cars (last 2-3 decades) are pretty reliable. anything under 100k will likely outlive a rural mom/pop
     
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  13. Timbresmith1

    Timbresmith1 Tele-Afflicted

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    Avoiding a trip to the dmv is very high on my list.Giving them money for the privilege of waiting around is maddening.
     
  14. naveed211

    naveed211 Friend of Leo's

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    Yup, I was just about to mention this. I’ve definitely looked at Hondas and for the most part now they cost as much as my current car and have nearly twice as many miles on them.
     
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  15. beninma

    beninma Friend of Leo's

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    You didn’t say how much money you actually owe on the car and what the interest rate is. Most car loans are far better financially than credit card interest though.

    I agree with most of what others said. But I would add that you should concentrate on paying down the CC debt first, but also investigate refinancing the car loan.

    I bank with a credit union, they do a lot of business refinancing bad auto loans. If you’ve got a 5% or higher loan they’ll refinance it down to the 1%-2% range.

    Once you’re down in those ranges it’s practically free money and just drive the reliable car and don’t worry about the interest while you get the rest of your house in order.

    And when you’re shopping for cars if you have to take a loan the interest rate you can get should always be a big factor. If one of the cars is being offered at 0.9% or less that should be a big factor versus which one you like the color of better or who is advertising +10HP.
     
  16. El Marin

    El Marin Friend of Leo's

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    My approach to cars is that I will never buy a car more expensive than the more expensive guitar I have.

    I bought this August my more expensive car EVER. A Renault Scenic 2009 with 130.000 Km for 2000€
    My oher cars were 500€, 1000€... If they last me six years I am happy with it. If it breaks and the repair is more than 500€ I just call the wrecking yard and send it there. Then got another.

    An old car is reliable if is CHEAP. If you spend 20K in a car and last 5 years is expensive. If you spend 500€ and last the same 5 years is cheap and reliable

    I had a SEAT Ibiza total cost 500€ that lasted me for 9 years of gigs, travels and parties, I got it with 100.000 Km and wrecked it with 400.000... best 500€ ever spent

    So, my 2cts.... pay your debts and go cheap
     
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  17. bcorig

    bcorig Friend of Leo's Gold Supporter

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    “If I were in your shoes”. Dump the card debt and cut up the card. keep the car - Devil you know. Pay off car.
     
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  18. naveed211

    naveed211 Friend of Leo's

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    To give some idea:
    My car loan is about $10k remaining. Interest rate is around 5%.

    My credit card is about $5k, interest rate is 0% for about another 7-8 months (it’s the last of three cards to pay off, and was a balance transfer).

    I may be able to get out of the car loan and into something more affordable without owing anything into it. If that’s possible, then maybe my mind isn’t as made up as it was a couple posts ago. But we’ll see.
     
  19. sloppychops

    sloppychops Tele-Holic

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    Used car prices are ridiculous now, and you could easily end up with something that ends up costing you much more in repairs. Pay down the CC and make extra payments on your existing car loan.
     
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  20. Happy Enchilada

    Happy Enchilada Tele-Afflicted

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    Here's what I'd tell my own kids:

    Credit card debt is just that - at least with an automobile, you GET SOMETHING for your money. You need a car to get to work, COSTCO, free clinic for shots, soccer games for the kiddies, etc. Plus the interest rate on the credit card if you're falling behind is most likely WAY beyond what you're getting charged on the car loan, right? So kill the credit card first and keep driving the car. Then when you're out from under the credit card debt, it's time to think about the car situation.

    As one poster mentioned, used cars are at a premium right now due to chip shortages and other market factors. Which might be good news for you if and when you go to sell the car. Bear in mind, though, that even if you do get a good price for the car, you will need another one, and you most likely won't be able to upgrade to a better vehicle because of rising costs. So the smart money's on waiting it out.

    You mentioned that you had enough overage left at the end of the month to put aside for emergencies. That's great! Perhaps by the time you kill off the credit card debt, the spike in car prices will have passed, and you can take some of the overage cash and your trade-in and go car shopping. But by then, the original car will be further toward being paid off, which might make it smarter to hold onto it and pay it off and then, as one poster put it, "drive it until it's bleeding out of every hole."

    My dad always said the only way you make money on a car is to "drive it until the wheels fall off." I drove my '99 Explorer Sport for 16 years and almost 200K miles before I traded it off, and even then it was running like a sewing machine. And I bought it used with cash. So if you do some digging, there will be some decent used vehicles out there when you're ready to buy - there always are.

    Summary: Kill credit card. Keep car. Patience, Grasshopper.
     
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