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Old 08-02-2015, 06:38 PM
 
134 posts, read 194,925 times
Reputation: 120

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I drive a 2005 Acura tl and I owe about $6800 on it. It has $120k miles on it. I took it to the dealership for an appraisal. I expected something like $5500, they offered $3500 because of mostly cosmetic issues. (it was a brutal winter)

I have a car payment of $265, my insurance is about $200/month, and because it's a 10 year old car, I've got some repair/maintenance costs. I replaced all 4 tires not that long ago and I've been told the car needs about $5000 worth of work. Most of this work isn't really necessary but I expect repair costs to spike in the near future. I'm wondering if I have any options that would help me save some money since the cost of owning this car is so outrageous.

Option 1 - Keep car and continue making payments as scheduled (interest rate is only 2%). Hope insurance cost goes down for the next couple of years. Hope any repairs aren't too costly. Finish paying off car in 2017. car may not be worth much at 12 years old. Hope to keep driving for as long as possible.

Option 2 - Sell car for as much as possible. Take advantage of a 5% promo on credit card and pay off remaining balance within 18 months. since this would be an unsecured loan, I would hold the title and could remove full coverage insurance on my car. This could save money on insurance but would be risky if something were to happen to car.

Option 3 - Trade in car for a lease on a newer vehicle like a toyota corolla. Could potentially save money on monthly payment for the next 3 years, no/low repair maintenance costs on new car, but higher insurance costs, lease mileage costs could deplete any potential savings

Option 4 - Get rid of car and continue making monthly payments. No insurance costs, no repair/maintenance costs, no gas costs. Would have no car and would have to rely on public transportation/friends/family. I really don't want to do this but this seems like the best option I can think of.

I figure I'm screwed anyway I look at this but is there one option that's less crappy than the others?
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Old 08-02-2015, 06:51 PM
 
Location: Clinton Township, MI
1,901 posts, read 1,480,783 times
Reputation: 2276
How about sell the car, pay off the remaining debt as soon as possible, then BUY a used car that's no more than $2,500 out of the door and with low basic insurance coverage. Once you get to the point where you are making solid middle class level of income, then you can look at buying a 1-2 year old car with no more than $12k in costs.

I swear so many people have bad car buying habits. A 10 year old car with 120k miles and you sign up for a $265 note on it with insurance at $200 a month. Almost $500 a month for a 10 year old car that's nothing but a basic unit.

And people wonder why majority of Americans are living paycheck to paycheck, look how they manage their expenses.
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Old 08-02-2015, 06:58 PM
 
4,399 posts, read 9,224,820 times
Reputation: 2353
Quote:
Originally Posted by mizzlea View Post
I drive a 2005 Acura tl and I owe about $6800 on it. It has $120k miles on it. I took it to the dealership for an appraisal. I expected something like $5500, they offered $3500 because of mostly cosmetic issues. (it was a brutal winter)

I have a car payment of $265, my insurance is about $200/month, and because it's a 10 year old car, I've got some repair/maintenance costs. I replaced all 4 tires not that long ago and I've been told the car needs about $5000 worth of work. Most of this work isn't really necessary but I expect repair costs to spike in the near future. I'm wondering if I have any options that would help me save some money since the cost of owning this car is so outrageous.

Option 1 - Keep car and continue making payments as scheduled (interest rate is only 2%). Hope insurance cost goes down for the next couple of years. Hope any repairs aren't too costly. Finish paying off car in 2017. car may not be worth much at 12 years old. Hope to keep driving for as long as possible.

Option 2 - Sell car for as much as possible. Take advantage of a 5% promo on credit card and pay off remaining balance within 18 months. since this would be an unsecured loan, I would hold the title and could remove full coverage insurance on my car. This could save money on insurance but would be risky if something were to happen to car.

Option 3 - Trade in car for a lease on a newer vehicle like a toyota corolla. Could potentially save money on monthly payment for the next 3 years, no/low repair maintenance costs on new car, but higher insurance costs, lease mileage costs could deplete any potential savings

Option 4 - Get rid of car and continue making monthly payments. No insurance costs, no repair/maintenance costs, no gas costs. Would have no car and would have to rely on public transportation/friends/family. I really don't want to do this but this seems like the best option I can think of.

I figure I'm screwed anyway I look at this but is there one option that's less crappy than the others?
You can't do number 4 or because the title is still going to have a lien on it. This means you won't be able to sell the car until the loan is paid off.
I'm not sure I understand number 2 are you going to sell the car or keep it.
I would go with number 3 or 1 depending on the deal you get on a lease. Though I would lean toward getting rid of the car since it seems to be taking up so much money on repairs.
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Old 08-02-2015, 08:00 PM
 
1,735 posts, read 1,993,124 times
Reputation: 3926
Quote:
Originally Posted by mizzlea View Post
I drive a 2005 Acura tl and I owe about $6800 on it. It has $120k miles on it. I took it to the dealership for an appraisal. I expected something like $5500, they offered $3500 because of mostly cosmetic issues. (it was a brutal winter)

I figure I'm screwed anyway I look at this but is there one option that's less crappy than the others?
I can't discern from the options you outline whether or not any of them involve rolling over the balance of your loan into a new loan.

Avoid that option like the plague. There is one C-D poster who did this kind of rollover when he bought a babe magnet car. He says he now can't afford to move to a better area with greater economic prospects for four years, until he gets out from under. AND he is stuck in a low-paying area.

Housing and automobiles are depreciating, asset-depleting consumption items. Sort of like blowing $600 on a haircut when a $30 haircut would do. Neither the $600 haircut nor the $30 haircut has lasting value - they are both consumption items.

Trick of the "financial freedom" brigade: MINIMIZE consumption items. Especially, do not become a debt donkey in order to service their purchase...
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Old 08-02-2015, 08:27 PM
 
Location: East of Seattle since 1992, originally from SF Bay Area
30,927 posts, read 56,391,477 times
Reputation: 32997
Why is the insurance so much? Our 3 cars total about $150/month, with full coverage on two of them. Maybe you should shop around. Meanwhile I would sell it, and find a way to come up with the difference to pay it off so you can give the title to the buyer. For basic transportation, take someone knowledgeable about cars with you and look at some of the beaters on Craigslist. I wanted one just for going to the park & ride to save wear and dings on the 2 newer cars, and paid $950 for a 1997 Escort with 140,000 miles. Now 5 years later it has 170k and is still running strong.
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Old 08-02-2015, 08:45 PM
 
Location: Florida -
9,072 posts, read 11,260,438 times
Reputation: 17968
Reading between the lines, it sounds like you bought an overpriced used car from one of those 'finance it here' outfits ... with an extended payment plan and high insurance costs that protect the seller, but, costs you an arm and a leg. Then, you drove the wheels off of it and didn't really take care of it. So now you are stuck with a $3500 car with 120K miles, that will potentially?? need $5,000 in repairs (that you need or don't need?), on which you still owe almost $7,000; and still can't get rid of the $200 per month insurance costs.

Before you leap into another vehicle, the first thing you need to do is learn from your mistakes and don't do the same thing again.

The next thing is to get an honest assessment of the car's condition and likely near-term repairs and costs ... to keep the car running with some degree of reliability for the next couple of years. (If you are seriously going to need $5K in repairs for a $3.5K car, the situation is different than if you can keep it running).

You probably can't do better than a 2% interest rate (except you are actually paying a higher rate in the higher price) -- Find some way to reduce your insurance costs - It really doesn't make sense to bay $2500 per year in insurance on a $3500 car.

Then monitor and manage your driving habits and take better care of the vehicle until you can work your way out of this mess. Finally, don't make the same mistakes again.
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Old 08-02-2015, 10:07 PM
 
2,563 posts, read 2,879,385 times
Reputation: 3498
If your insurance is $200 a month, I'd say that's your problem. Do you have a history of car accidents once a week?
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Old 08-02-2015, 10:11 PM
 
286 posts, read 213,261 times
Reputation: 242
you didn't even CONSIDER selling it and using a bit of the money to buy a $1000, older car? if the dealer offered $3500, that means that you can easily get $4500 for it by advertising it on craigslist and putting the white "paint" ads for sale on your windows. as you drive it around.
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Old 08-02-2015, 10:12 PM
 
286 posts, read 213,261 times
Reputation: 242
If you're hurting, buy an old mini-van and live in it. Saves you rent, utilities and commuting. Check out student loans at your local jr college. 12-16k per year, on top of your school costs, which are covered by your Pell grant. Sounds to me, tho, like you're a drunk or lazy.
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Old 08-02-2015, 11:15 PM
 
Location: The Berk in Denver, CO USA
14,408 posts, read 21,124,177 times
Reputation: 24046
Increase your payment to $400/mo.
Own it outright.
Get a much cheaper new car.
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