Hey!
I am looking for advices to help a friend take the best decision regarding her car situation. First, I have to say that this friend is not mustachian at all, but I'm hoping I can influence a little bit in that regard.
So, she owns a 2012 Mini Countryman with 105,000 miles. She borrowed money to buy the car and still owes 9K$ (CAD) for it. The car is starting to show some wear and she'll have to spend money to either be able to sale the car at a reasonable price or keep it. I estimated 1.5K$ (will have exact diagnositc in the next few days). For the purpose of the exercice, let's say that she could sell the car for 10.5K$ if she repairs it, therefore be able to pay the debt (or do something else with the cash).
What she wants to do now: Because the car is ''getting old'', she wants to rent a brand new Audi Q3 for 4 years and give the Mini in exchange to the Audi dealer. Of course, the dealer will give her a ridiculous price and she'll end up still owing money on the Mini. I suspect Audi will offer to finance the difference at a ridiculous rate too, but I am not even sure. This, of course, seems like a very bad idea knowing that she also has small credit card debt, bad credit and no savings.
What I would do : Repair the car, save money, sell the car, pay the debts, buy a cheaper car. But this is too much a big chunk for her, I know it.
So my question: What would be a good compromise? Keep her plan, but convince her to rent an entry level car for now? Convince her to keep the Mini for a while and save as much as possible to buy a good used one? Sell after repairs, keep the loan and buy a cheaper used car while paying off debt? Any other suggestion?
*Since I don't have exact number yet regarding rent price, Mini sell price, repairs, rates on loan, etc., I acknowledge it might be hard to answer. Will update as I get more details.
Thank you all!