Getting Rid of my Clown Car - Advice Needed

[Valley of Plenty]

Hey everyone, looking to switch out my current clown car SUV for something more Mustachian.

I currently drive a 2013 Ford Escape with 92,000 miles. When I first started reading this blog about a year ago, I still owed about $13k on it. Since finding the FI movement, I've begun aggressively paying down my debt, and now have the remaining balance down to $7,300. I've been paying $1,000 on it most months (the minimum is $256). The interest is a painful 9%.

My plan up until now was to pay it off ASAP, and then once it's paid off sell it for about $7,000 (based on KBB value for private sale) and use the money to buy a small hatchback of roughly the same year and mileage.

Then yesterday I was visiting with my parents and my mother brought up thinking about buying an Escape. I told her once mine is paid off I'd be happy to sell it to her. She countered with an interesting proposal: "What if I pay it off for you and then trade you my car for it?" Her car is a 2010 Suzuki Kizashi with 158,000 miles. Despite the high mileage I know that the vehicle has been well taken care of (my stepdad is a mechanic and takes excellent care of their vehicles), so I'm wondering if this might actually be the best path forward. It seems unwise to trade my vehicle out for one with nearly twice as many miles on it, and the Kizashi is a mid-size sedan rather than a small hatchback, but the prospect of wiping out this debt is extremely tempting. Plus, it would still get about 10MPG more than what I'm currently driving, and I wouldn't have to carry full insurance coverage on it.

I should note that I don't drive a whole lot currently. About 4 miles to work and back 3 or 4 days a year, and that's pretty much it (aside from maybe 1 big trip every other month). I've only put about 7,000 miles on my Escape in the 2 years I've had it.

So my current options as I see them are as follows:

A - Stick with original plan of paying the Escape off ASAP and then selling it to buy a small hatchback
B - Go with my mother's offer to pay off the Escape and trade me her Kizashi
C - Pay off the Escape ASAP and keep it

I don't expect anyone to say C, but it is still an option.

Biggest pro I can see of B is the prospect of immediately eliminating $7,300 of high interest debt, which would otherwise probably take me the next ~8 months to pay off. Freeing that money up now would allow me to start throwing it into my 401k, which I am not currently able to max out.

Thoughts?

[former player]

What is your mom's car worth?  With a close family member I would be looking to make an even trade that leaves both sides happy.

It doesn't sound as though your mom is emotionally attached to her current car so I see no reason why you couldn't take it on and then sell it for something more suited to you.

[Valley of Plenty]

What is your mom's car worth?  With a close family member I would be looking to make an even trade that leaves both sides happy.

It doesn't sound as though your mom is emotionally attached to her current car so I see no reason why you couldn't take it on and then sell it for something more suited to you.

According to KBB, it’s worth about $3500, which is about half the value of my car. If I did sell it, I would then need to add in another $3-4k to be able to buy the sort of car I’d want. I guess that is an option, but I think I’d rather just keep the Kizashi and run it til it falls apart, since I’d essentially be getting it for free.

[former player]

The big advantages in going with this deal are -

1) you get out from under that 9% interest,
2) you have an easy sale for a car that's too big for what you use it for and too expensive for your current financial situation,
3) you get a much cheaper and cheaper to run substitute vehicle that seems pretty suitable for the limited mileage that you do.

Those are all very good things.  The potential con is that your mom is effectively giving you her car, which is worth $3.5k.  Can she afford to do that?  Can you agree to pay her something for it, perhaps in some of the installments which would otherwise have gone to your car loan?  Otherwise, whether you and she and other family members are happy with her gift to you depends on family dynamics which only you know.

[alsoknownasDean]

How much rust is there on the Suzuki?

It doesn't sound like too bad a deal if you're wanting to get rid of your debt, depending on how long you want to keep it.

If you're wanting a car to keep for 5 years or more, maybe it's not ideal. If you're looking to move it in in two or three years, then it could be worthwhile.

[Valley of Plenty]

The potential con is that your mom is effectively giving you her car, which is worth $3.5k.  Can she afford to do that?  Can you agree to pay her something for it, perhaps in some of the installments which would otherwise have gone to your car loan?  Otherwise, whether you and she and other family members are happy with her gift to you depends on family dynamics which only you know.

She knows she would essentially be overpaying. But she’s got substantially more cash on hand than I do, so she doesn’t mind essentially giving me her car if she knows the one she’s getting in return is in excellent shape (it is).

Don’t get me wrong, I could afford to give her a couple thousand for the car, but at the same time the offer she made me is kind of a slam dunk for me, and I’m not opposed to accepting her generosity.

[Valley of Plenty]

How much rust is there on the Suzuki?

It doesn't sound like too bad a deal if you're wanting to get rid of your debt, depending on how long you want to keep it.

If you're wanting a car to keep for 5 years or more, maybe it's not ideal. If you're looking to move it in in two or three years, then it could be worthwhile.

There is no rust on it that I’m aware of. I have been assured by my stepdad (a mechanic and person that I trust) that the vehicle is in excellent shape with no apparent issues. And with all the more I drive, it will be close to 10 years before I get it over 200,000 miles

[former player]

Your mom and stepdad sound like good people.  Getting out from 9% interest is great for you.   Silly for you to keep your Escape and then find that your mom has gone and bought a different one for herself.  So if all the family are happy, I'd say why not go for it. 

[Paper Chaser]

Long term ownership of a rare model from a dead brand (in the US) would give me pause if the plan is to drive it until the wheels fall off.

[AMandM]

Your mom would pay $7300 plus a $3500 car in exchange for a $7000 car.
You would go from owning a $7000 car with $7300 of 9% debt to owning a $3500 car. You don't drive much so a well-maintained high mileage car is perfect for you.

This looks like a no-brainer to me. If your mother is truly happy to be that generous, accept with thanks.

[RWD]

Long term ownership of a rare model from a dead brand (in the US) would give me pause if the plan is to drive it until the wheels fall off.

Sounds like this shouldn't be too much of an issue:
https://kizashiclub.com/forum/viewtopic.php?t=4525

[Valley of Plenty]

Long term ownership of a rare model from a dead brand (in the US) would give me pause if the plan is to drive it until the wheels fall off.

Sounds like this shouldn't be too much of an issue:
https://kizashiclub.com/forum/viewtopic.php?t=4525

Thanks for linking this! Lots of good information to have.

[Valley of Plenty]

Update: I took the deal.

The money was transferred to my account and as of 30 minutes ago the final payment is in the mail. Now I just have to wait to get the title and transfer it, and that will be that.

On a very positive note, this officially makes me debt free! And I get a new to me car to celebrate. Huzzah!

[RWD]

Congrats!