If I read this correctly, it means you still owe money on your old car, which means you’ll be adding that amount to your new car loan.
For how long? Four years, five years, six years?
The top prices in the various used car guides assume you’re selling to a private party. I just checked my own car and the trade-in value is $3K lower than if I were to sell it on my own – assuming, of course, I can find a buyer who doesn’t want to nitpick what “excellent,” “very good,” and “good” condition actually mean.
When you drag it to the salvage yard is much too late in my opinion. A car should be reliable if I am having to take it into the shop for things other than standard maintenance more than once a year it is time for a new car. This will tend to get you at least 10 or 15 years out of a car.
My ride is a 2007, just turned 90,000 miles. I love it. Oh yeah, totally paid for, well-maintained, runs like a top.
For a minute last year I considered getting something shinier but came to my senses pretty quick. I am now committed to sticking with it as long as it sticks with me.
This:
is the worst piece of advice I’ve heard in a long, long time.
mmm
I’ll be the devil on the “do it” shoulder. I got very little for my trade-in, and they were probably lying but they told me anything over 100K miles goes straight to auction. Go in around December 31 and you may get an even better deal if they are trying to get stuff off the lot for Q4. And since you don’t need to do it, you can hold out for a better deal. (I am fresh off my father getting a $27K car for $5600 plus trade-in on March 31 :).)
From a purely financial perspective I think it is pretty clear. Your best bet is to drive the car into the ground, where “the ground” is the point where you no longer trust the car to get you around reliability or are starting to see unpleasant maintenance costs. But modern cars have a lot more reliable miles in them than you’ve currently done.
That said, getting a new car isn’t necessarily the wrong choice. I’d just go into it eyes wide open: namely, you’re spending money on something you want, not something you really need or that is strictly speaking the optimal “money for transportation” trade.
I’ve realized the giant gaping fatal flaw in my scheme. I somehow imagined I could use the sale money of the old car to pay off the loan AND put a down payment on the new carm resulting in financing the remaining sale price of the new car, leaving me with a lower balance to pay off than I have now.
:smack::smack::smack:
Maybe I should think of this as a language difficulty. The word to use instead of AND, is OR. I could do one or the other, but not both. I could pay off the loan, but I’d have almost nothing left for a down payment. Or, maybe I could use the cash as a downpayment, but financing the remainder would mean a second loan almost doubling my debt.
This is what happens when you get a buying fever. This idea is dead slightly after arrival.
This is IMHO so I’m not arguing your opinion, but financially my method wins virtually every time. I pay no more than $5k for a used car in good condition and never finance. I do most of the work myself, but will use a local mechanic for major repairs. With the average used car monthly payment at $352($4224/year) I could alternate having the transmission and engine replaced annually and still come out way ahead. To me the basic equation is can I get a comparable car for the price of the repair(s) needed.
The downside of driving a car until it dies is that the dying rarely takes place at a convenient time. That’s something I’m prepared to deal with.
I wasn’t really presenting it as ‘advice’ so much as an opinion
I can’t stand to drive the same car forever and ever until it dies. I like variety. To me, a car is more than just a means to get from one place to another. I like cars.
I currently have an older one I need to get to work on and get fixed up.