We're not in great shape now, but looking to get better...
We are a family of 4. We currently have a 2006 Mazda5, which gets ~25mpg & has 56,000 miles on it. We owe $7K on it currently which we're paying down at $1268/mo starting in November (beginning of a snowball). It's worth about that much for individual sale, but our loan is through an online bank, which complicates selling private party before it's paid off as we have to wait 2 business days after it's paid off to receive the title.
I can pick up a 2000 Toyota echo, which gets ~35mpg & has 98,000 miles on it for $4k.
My thought: Trade in the Mazda for $6k (kbb estimate & what we'll owe after the 1st). Borrow $4k for the Echo, pay it off in less than 4 months.
According to estimates on mileage & gas used, we'd save close to $480/yr in gasoline. We're driving less now than we have historically (so savings for better mpg won't be as significant, but we're using it less so that should offset it). We'd also save at least $240/yr in insurance by dropping our comp & collision coverage.
In my head the better mpg negates the higher mileage. We're saving $2K on loans and would continue to save on gas & insurance. I realize borrowing isn't the best idea, but I've already done that & I'm looking for the quickest way out of this situation so I can move on.
Your advice/opinions/facepunches are welcome & appreciated.