Hey everyone, I need some advice on how to get out from under a large car loan.
First let me explain how I got there (if you care). Last year I took my car (2006 Chevy Malibu, paid off) in to Big O Tires to get an oil change and an alignment. The car came out of the shop in worse shape than when it went in. It now pulled hard to the left when accelerating or travelling at high speeds. I had several hundred dollars more work done to try fixing the problem (replaced struts, another alignment and other work done at a GM certified dealership) and when all was said and done we decided to get another car because my wife didn't feel safe driving in the car (hell, I still don't feel safe driving the car). So we bought a second car, a 2011 Chevy Impala. Financed $18k in May 2012.
We definitely could have and should have gotten something cheaper and saved up for it; but I guess when you are a year out of school and get your first raise at work you make stupid mistakes (lame excuse, I know). But wait, there's more! And it gets worse.
So come November I get a new job and another raise. And I decide that we need to upgrade to an SUV because we have a second child on the way. So we trade in the Impala (we owed $16k and got $13k on the trade in, so tack that -$3k onto the new loan) and financed a 2012 Chevy Traverse (can you tell I like a cetain car maker?) for $29.5k. Fuck me, right?
In January I started reading MMM and things just clicked. Since then I have paid off over $10k in debt and we are on track to be debt free in about two more years (~$36k in student loans and ~$28.5k left on that car loan) and that car loan is where I know I can make a huge impact; I just need to figure out the best way to handle dumping the car and getting reliable transportation.
We can easily be a 1-car household. My job is a 35 mile commute one way (closest city is 25 miles away from my job site) but my employer has a shuttle service that I use every day, so the Malibu is only used about 4-6x per month (at most) when I have to work an off shift or go in late to work. According to KBB the most I could get for the Traverse through private party sale would be ~$23.5k, meaning I have to come up with ~5k to cover the negative equity. I am in debt payoff mode right now, so I only have $1k in savings and I don't want to tap my retirement accounts unless it was a life or death situation. So should I look at getting a personal loan through my credit union? Other options?
And then there is the reliable transportation issue. We kind of live in the middle of no where and if it was just the wife and I, we could probably get by with no car at all, but we have a 2-year-old and a 2-month-old. The oldest always wants to go to the park and there are no parks within walking distance of our apartment. Same with taking them (especially the little one) to their checkups. The doctor's office is a few miles away. So my first thought would be to try getting the Malibu fixed, but I don't know how much more that is going to cost or how I'm going to find a place that can fix it (obviously less expensive than continuing to pay for the Traverse). The second option would be to sell the Malibu for whatever I can get and buying an older Honda for a couple grand. Anything else I could do?
Anyway, thanks for reading and please, don't hold back questions/criticism. I need to hear it. And hopefully I can get some good advice out of this.