Unbeknownst to you, you have helped me immensely in figuring out a complex issue just by being forced to express my thoughts in concise manner. For that I thank you. Since you're kind enough to read this, I'd like to take the opportunity to spell out what you helped me solve and see if you agree, or if my logic is flawed, in which case I'll love some clarification.
I drive a 2012 Toyota Camry averaging 32 mpg with 43k miles on it. I got it new right after finishing grad school, when cash was tight and I had no car. It was financed at 0% interest. (I didn't want to purchase new, but family pressured me and I caved, regretting it ever since due to hefty student debt). I finally have a bit of equity in the car as it's worth ~$15k currently and has ~$10.5k left on the loan. I originally planned to use it for 10+ more years, driving about 10k miles/yr, selling it around the 150k mile mark.
For the last few months, I have considered selling it, paying off the loan and using the surplus along with a bit of savings to buy something outright in the $7-8000 range, thus allowing me to put what I am currently spending (~$430/mo) toward student loans immediately, while still having a pretty reliable car to drive to work (7.5 miles away). This would free up ~$7k* to go toward the 6.5% interest loans over the next 18 months which would have otherwise gone toward the loan. (*$10.5k I would have spent on the loan less the $3.5k pulled from savings to buy the used car).
Strangely in the process of spelling this out, I think I've come up with my answer. Below I have included my math to come up with my answer, which doesn't factor in the freedom from that nagging feeling of being played ever I've had since I purchased the car. The math says sell it and get a used car to stop the bleeding.
I am probably making this situation entirely too complicated, so I'd like another take on it. I've been over the numbers oodles and can't tell if they are right anymore. Do I keep the current Camry and use it for the next decade, or get an older car with lowish miles (50 to 75k), or do I try something else I haven't considered yet?
I very much appreciate any time you'd kindly put toward helping me with this puzzle.
Thanks again for your time.