Trade-in or Keep?

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Hi guys. Wanting some opinions on what to do. I have the car in my sig. Going to be doing 60+ miles a day commuting from here on out and can't decide whether or not to trade this car in for a more fuel efficient one.

I'm upside-down about 3500 dollars on it which stinks obviously. However, if I don't trade it in now I'm not sure whether or not depreciation will continue to keep me in the red. Would it be better to trade it in now before I load up more miles on it and take the $3500 loss but gain a much more fuel efficient car or just keep it. I think I've explained what the dilemma is.

Thanks
 
You will certainly not help your financials by going out and buying a new car.

I would say that piling on a ton of miles on an older/used car will result in a smaller depreciation hit than piling on the same miles on a brand new vehicle.

What MPG does your Taurus get? Is it really that bad?

IMO, keep what you have, pay it off ASAP, and then keep making payments... to your savings account.
 
Originally Posted By: Quattro Pete
You will certainly not help your financials by going out and buying a new car.

I would say that piling on a ton of miles on an older/used car will result in a smaller depreciation hit than piling on the same miles on a brand new vehicle.

What MPG does your Taurus get? Is it really that bad?

IMO, keep what you have, pay it off ASAP, and then keep making payments... to your savings account.


^^This.
 
I'm new to all this stuff. The Taurus was my first car purchase so I appreciate the responses.

The Taurus gets probably 26-28 on a good day. I was thinking of getting a Cruze which gets 38.
 
Originally Posted By: aquariuscsm
Originally Posted By: Quattro Pete
You will certainly not help your financials by going out and buying a new car.

I would say that piling on a ton of miles on an older/used car will result in a smaller depreciation hit than piling on the same miles on a brand new vehicle.

What MPG does your Taurus get? Is it really that bad?

IMO, keep what you have, pay it off ASAP, and then keep making payments... to your savings account.


^^This.


+1
 
I would drive the car until I'm out of debt. You've obviously gone to some trouble to maintain the car and now you need to drive those miles off.

Once you're out of debt with this car then decide the difference between what you need and what you want.

Try not to assume that a car payment is an unavoidable debt that you must always carry.
 
If you can keep your speeds down to 60-65 mph then you should be able to get near 30mpg. A used compact car with VVT may do 40mpg. So the savings aren't insignificant, but you have to think how much trading cars costs you as well.
 
Originally Posted By: Throt
The Taurus gets probably 26-28 on a good day. I was thinking of getting a Cruze which gets 38.

If these MPGs are accurate, rough calc shows you'll be saving about $500 on gas per year. This is hardly worth it to get yourself in even more debt by buying a new car that will depreciate fast due to all the miles.

Also, you don't know how long you'll stay at this new job. What if you stop working there in a few months? What if you move closer?
 
Originally Posted By: Throt
Hi guys. Wanting some opinions on what to do. I have the car in my sig. Going to be doing 60+ miles a day commuting from here on out and can't decide whether or not to trade this car in for a more fuel efficient one.

I'm upside-down about 3500 dollars on it which stinks obviously. However, if I don't trade it in now I'm not sure whether or not depreciation will continue to keep me in the red. Would it be better to trade it in now before I load up more miles on it and take the $3500 loss but gain a much more fuel efficient car or just keep it. I think I've explained what the dilemma is.

Thanks


When you calculate the actual savings of picking up say 5 MPG its not a huge savings per year. Verses buying a new car.

Going from a 1990 Suburban to a Prius would be a different story.
 
Last edited:
Originally Posted By: OneEyeJack
I would drive the car until I'm out of debt. You've obviously gone to some trouble to maintain the car and now you need to drive those miles off.

Once you're out of debt with this car then decide the difference between what you need and what you want.

Try not to assume that a car payment is an unavoidable debt that you must always carry.


+100,000,000

Drive your current car until it is paid off, then drive it a few years more. It may not last forever, but IMO it should last twice as long as your payments. Finance for 5 years, drive it for 10. Then you aren't upside down when you sell/trade it in.
 
Originally Posted By: OneEyeJack
I would drive the car until I'm out of debt. You've obviously gone to some trouble to maintain the car and now you need to drive those miles off.

Once you're out of debt with this car then decide the difference between what you need and what you want.

Try not to assume that a car payment is an unavoidable debt that you must always carry.


I've definitely gone to lengths to maintain this car and I do love this car. I've got 5.5 years left on the loan but I know it's got a good 10 years left, if not more. I'll work to pay it off.

Thanks.
 
I'm sure there are things you can do to improve the fuel economy of it, too. Without going too crazy.

I'd keep what you have. Pay it off and start saving up for its replacement.
 
A good personal philosophy is to save, and be able to pay cash for car purchases. Popular culture will tell you it is "normal" to make car payments. The only thing car payments do for most people is ensure that they are a wage slave to a material possession that constantly declines in value.

Youd be suprised how fast you can put away $5000, and just how dependable of a car that can buy you if you know how to shop.

Read The Total Money Makeover by Dave Ramsey. Seriously, it can change your life.
 
If you do a lot of highway driving the Taurus engine is much better suited than a cruze... Your current mpg isn't horrible, I would keep it unless you can find a dealership that will payoff what you owe. $3500 is doable, remember that volume dealers are more motivated to sell new cars vs. getting the most profit out of each transaction. Also take into consideration your sales tax laws. If your trade-in can help offset the sales tax of the new vehicle, you're saving on that as well.
 
Using a gas cost of $2.50/gal and 15,000 miles per year, the dollar savings is about $400/year using the efficiency numbers you provided. Even if gas rises to $3.00/gal, it's still under $500 a year.

The $3,500 of negative equity you have in the Ford will be rolled right into the new loan. Not to mention sales tax, dealer fees, and depreciation on the Chevy. Financially, this decision is a dog. Even if the Ford requires a grand more in repairs a year vs the Chevy it will take years just to break even.

Then come the subjective issues like having a larger, potentially more comfortable car. Have you driven the Cruze? Do you like it compared to the Taurus?

Ultimately it's your decision. If your main reason to consider this is to save money...you're actually going in the wrong direction. If you really want the Cruze and are just trying to justify the purchase in your head, that's another story.
 
It is nice when you're close to paying a car off. It's even nicer than you are already paid off!

I don't know how much you owe, but guessing somewhere north of $10K. That's a lot for a 5 year old vehicle with 100K miles. I wouldn't want to make that worse by immediately starting out with a brand new car $3500 upside down. Also - don't forget that the instant you drive the new car off the lost, it's lost 1/2 of its value. That is a lot of money right there!

Highway miles are easy; you won't have to do do oil changes and brakes as often as you think. Tires would also last longer (provided no alignment issues). It's easier on the transmission, etc.

I'd keep up with maintenance on the Taurus (such as plugs, trans fluid) and run it to 200K. There's no reason a modern vehicle isn't capable of 200K miles.

Even if your current car is paid off ... getting a new car is not a good decision. I want to buy a Mirage or a Spark or something. I could trade the Focus and pay cash. But ... it feels nice both have no car payment *and* have the money in my savings account!
 
I would keep driving the Taurus. Rack up the miles until it starts becoming an issue with repairs (if) and then decide about changing cars.
 
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