I have been following the mustachian way for a few months now. The one thing that comes up in a lot of discussions/blog posts that gets me every time is "the stupid decision of financing a car right out of college." So, I wasn't a total idiot and bought used and reliable, but I did finance a barely-used honda civic with $0 down right before starting my first job out of college. That was September 2013.
I'd like some advice on whether it's a good idea to sell my current car and buy an older used one, or if it's a better idea to just hold onto this baby until it dies in hopefully 300k+ miles. It's not a hair-on-fire type of debt; I'm making the monthly payments just fine and have income to spare for plenty of 401k/Roth contributions. It's just eating away at my mustachian pride every time I write that monthly check.
The breakdown
Car: 2012 Honda Civic EX coupe with automatic transmission, larger wheels/tires (came w/the car)
Car mileage: 35,662 miles
Car mpg average: 31 mpg
Auto loan original balance: $20,841.50
Auto loan current balance: $16,379.24
Auto loan APR: 2.24%
Auto loan min monthly payment: $367.33
Auto loan term: 60 months
I usually make minimum payments since the interest rate on the loan is so low. However, my goal for 2014 is to max out my 401k and Roth contributions for the first time, and that would be made significantly easier with no car payment.
I have reduced my driving time significantly in the past 6 months by moving to an apartment where I can take the bus to work. However, the SO and I go to Trader Joe's once every other week, and visit family that are un bus-able about once a week. Additionally, my job may be transferred in January to a place 30 miles north of my apartment where I cannot take the bus to work. I'm hoping for a vanpool in that situation, but I can't be sure of that until right before the transfer. Basically, I'm uncomfortable going car-free in the short-term.
I'm proposing this case study, hoping that my other finances don't really matter. This is my only debt, it's not really influenced by anything else, and I want to hear if it's worth eliminating/reducing it. Getting an older car may reduce my auto insurance monthly payment as a bonus. Let me know what you guys think.