We are working hard on reducing expenses. One of the biggest expenses we have is our cars. I wonder if anyone here can help me figure our way out of this bind.
First of all, we do need two cars for work and transporting three kids to three different schools.
Car #1 is a 2000 Toyota Sienna which we bought about four years ago. We currently owe $10,171 and our monthly payments are $409.67. Interest is 5.69%. The current blue book private party value is $8580. I’m sorry to say we have already refinanced this car once before. This is a keeper of a car b/c it is mechanically very sound and meets our needs of seating lots of people.
Car #2 is a 2008 Acura Integra which DH bought new in 2007 when he was making lots of money and had some ego tied up in the car (thankfully this is no longer the case!) We have had to refinance this car a couple of times so we STILL owe $5599 and our monthly payments are $323. Interest is 4.44%. The current blue book private party value is $5200.
So here’s the problem: Assuming we sell Car #2 for the blue book value, we’ll come away still owing the bank a few hundred bucks AND we won’t have any money left over for another set of wheels. We could theoretically get a loan for another used car, but that would defeat the purpose……
I can’t imagine I’m the only person who has ever faced this kind of fix. Does anyone have any suggestions?
Do you want to sell Car #2 for a car that will not be financed? If so, how much do you have to spend on a new-used car? If you do intend to finance, usually the dealers are willing to work the numbers so that you get what you want for the car that you are trading. A few 100 dollars
is not that much really. The same thing just happened to us:
I had a Passat, paying $395/month. I had about -$300 difference comparing the blue book value. The dealer paid the old loan for us, and still gave us a deal on the new-used car. Now, our payments are $233 on a 2005 Ford Focus, for a 6 year loan.
Another thought – would you have ANY money for a downpayment? If so, you could refinance either car, using a downpayment to reduces the monthly payment.
I’m sure others will have great ideas, but I thought I’d let you know what we just went through. Let me know if you have any questions.
I just found this link for you. Hope it helps – http://www.allthingsfrugal.com/f_carloan.htm