08YellowCR

Well guys im trying to start saving more and watch spending habbits. Now i have cut back on things like cell phone,driving around town,going out drinking,AC/Heat. Now im finally geting to know what i need instead of what i want. I'm doing all these cut backs to save money and pay off debt. But i own a CR cost me $35k about 6 months ago. I also had about $3500 in CC debt 6 months ago. Now today i owe $1400 in CC debt and $32000 on the CR. I think im doing good at paying down debt. But im still paing $600 a month for my car. Im thinking in about 6 months selling the CR, by than i should be able to sell the car and get about $2000 back or just break even. Now i say this beacuse i figure i should get a car i can pay off in about a year. If i get rid of the car note that would save me a load of money. So is it smarter to get rid of the car for say a $6-10k car. Or just refinance the car in about 6 months when its down to mid $20s. Thanks

9K-S2K

What is the interest rate on your car loan?

08YellowCR

It is 6% not high but not great ethier. Dont know why the questions got messed up. The first one is $600 a month and the last on is refinance at mid $20,000.

mattfeet

6% is fairly high for a car loan. Nearly all auto companies are offering between 0-2% financing. I say your best bet is to get a cheaper car, or to refinance at a lower rate if you can.

-Matt

92hb_hb

go to a credit union and see what you can get

SD_S2K

Get rid of the car man!

You were 3500 in debt and went and bought a 35000 car with a 600 payment? great reason why US is in economic troubles, terrible lending practices and dumb buyers. this is obviously not a serious case but still ...

you have two debts - a car note and a CC, get rid of them both before you spend any money on flashy items (a 35k car is a very flashy item)
You are also probably young and I bet your insurance is a grip, big savings there

go buy a used Civic, Corolla, Yaris, Scion, Fit, anything 10k or less, preferably cash but sounds like you have none of that. so go to a credit union for a loan, can get 3.9% if you have good credit and the car is only a few model years old

biggest negative is trying to sell it so soon after you bought it. you will likely be negative, or at very best, even, so you won't get money back. pray you can sell it for what you owe. you may have to ride it out for a while till your sell price is closer to loan value

I commend your honesty to post about your situation, and recommend you dump the car as soon as it makes financial sense, and to buy a cheap reliable point A to B car ...

08YellowCR

Thanks the first real reply. But i'm not too young: 24. I do have savings in different CDs, money market account and a Roth ira. I have about $22,000 right now in those accounts and about $6,000 in another retirement fund through the government: i'm a marine. I figure leave that money where it is it's making me money with interest not much but it's a nice start for my age. insurance is cheap $105 a month i traded in my fit for the CR lol the fit cost me $89 a month to insure. But i can afford this car don't get me wrong i make ok money for my age. I just look at it like dam do i want to spend $600 a month on a car to get from point A to point B? Or do i want to save that for a rainy day and maybe have more fun. I love to do road trips; used to do a lot with the fit and i want to start again. I also want to start going back to other countries for touring and vacation. I'm not going to sell the car right now if i do i will in about 6 months to a year that way i will at least break even on it. Just woundering if it's more sound for me to get rid of it for a cheap car that i'm not sure was abused or refiance it to make cheaper payments on a car that i know where it's been and keep it for the next 6-8 years or it just won't run any more so i get my money's worth. But more than likely i will sell and get back into a cheaper car like the fit to start to do road trips again. I just figure most people don't get the full use of their car and trade it in early and lose money

mrgarciainc

Back in 2000, I went out and bought a brand new Jetta. Really I did not need but I wanted it. I put some nice rims on it, a sound system, tints, pretty much I thought was P diddy. I loved the car and kept it very clean. Everyone around campus new my car. About a year after that, the car was stolen and found burned.

My insurance check came in and thankfully they covered all the extras I put on the car. I got a check for $18k. That made me realize how stupid I was spending all my money on a car. I was already renting so I did not have anything saved. I put the cash away, and bought a cheaper fun car 91 se-r with the money I had saved to buy the suspension for my Jetta.

After a few years that 18k plus the interest it made was a down payment on a house for me. I then started to learn about real estate, equity, etc...Now I own a few houses that I rent and now I am more financially comfortable so I own a few nice cars. Some days I think about selling my S2k so I can put a down payment on another house.

Its definately nice to have a nice car, especially when we are young. But I think most people do not realize the importance of saving and investing for the future. I made that mistake myself. If I would have started saving & investing at the age of 18 instead of 23, I would be a millionaire by now and I could buy myself whatever car I want.

Its not a bad idea to sell the car, and get something cheaper and invest. If you are gonna do it, the sooner the better as cars tend to loose value quickly. Think about if you put that $600 per month into something that appreciates in value instead of depreciates, what would you have. Keep investing and I do applaud you on your current investments. Much better that most 24 year olds that I know.

ace123

What are you making now? And what will you make in 5 years? Are you about to start college, or are you nearly through and about to get a sizable income increase?

$600/month is a ton for some incomes and next to nothing for others. So it depends. You're right on though in saying your $600/month is largely a toy payment. That alone doesn't mean it's too much or too little though--you just have to consider everything.

You're always smarter to owe nothing and invest everything--if you want nothing but a big pile of money when you're older. And it will be a big pile if you do that. But I want money later as well as quality of life now, and since both compete for today's income, that becomes a big trade off. How much I can spend on toys mostly depends on my income, how much I value security vs. risk, and what my long term (retirement etc) goals are.

Now, all that being said, if you're trying to save $10/month by keeping the AC off and sweating, you probably should either rethink spending the $600/month on a car or rethink why you're wasting time sweating $10. Also, if it's taken you 6 months to repay $2000 and that's been a priority to you, I think you're living beyond your means owning a car with that large a payment with respect to your disposable income.

And the other side of the coin is what do you lose selling now vs. later. If you're nearly through with school and will buy another one in about 2 years, you may want to just hold on to it and suck it up because selling the car and buying another would cost you quite a bit. But if you're still far away from an income increase, you'd probably be smart to get a used S2000, a Fit, or whatever else and have more money in your pocket every month. Maybe a cheap used motorcycle for weekends and fun plus a Fit / Civic / etc. for the commute would fit your needs better?

08YellowCR

Thanks for the advice. But i'm not really caring over $10 i just don't let my AC run all day like i use to only when i'm home. I'm a marine i'm in college but it's all payed for i just pay for books. I think i will keep it i really don't want to take a big hit on selling it. I will just have to keep it for around 5-7 years so i will get my money's worth for it. Oh also i now owe $1000 on the CC and that will be payed off by next month. And really all of this has not been a priorty that's why i still have all this debt. But it is now because i really need to start investing more when i'm young. So i plan in the next year to get the car down from $32600 to around $20k-22k and just refinance it for around a 4 year loan and see if i can get a better APR. Than i will still try to pay more on it than i have to. I also am expecting to get about a $230 a month raise here in the next 2 months. Thanks for the advice so far. The plan is to be debt free in about 3 years from now which i think i can get there. Than just keep driving the car until the wheels fall off