Hello,
I've been following MMM for a little over a year now and made a lot of positive financial adjustments over the past 12 months. Despite this mistake i'm about to discuss, I feel like I've done well planning for retirement. At 25 years old I've managed to stack away $50K in savings/401K with only $9K in debt which i'll illustrate here in a minute. My objective is to tackle my automobile situation. This is probably the biggest financial mistake I've made in my 25 years on this earth.
Right after college (2013) I purchased a 2009 chevy Tahoe LTZ 4WD. On top of that I financed it. My reasoning? I had access to a wakeboard boat free of charge if I could tow it (a huge hobby of mine as a kid), I constantly was going on road trips with friends, I needed a somewhat nice car for work (my company's requirement not mine), and I've always wanted to drive a Tahoe. If I could take it back I would but we can't time travel. I just need to stop the bleeding.
Current Situation:
I'm a 25 year old working with a job making 50s salary. I am single with no family. I commute about 24 miles round trip everyday. I travel ALOT for work in my personal auto so ditching a car completely is not realistic for my situation. I drive clients around as I am in commercial real estate, so I'm not sure my company would be cool with me driving around a total beater car either (although I would be fine with it).
The Automobile:
2009 Black Chevrolet Tahoe LTZ 4WD (fully loaded)
Mileage: 93,000. I put 60,000 miles on it since I purchased it 3.5 years ago.
Condition: Fair
Chevrolet Tahoe LTZ 4WD fully loaded.
The loan balance on the car is now $9,000. My monthly payment is $570.
Obviously, all in all it's been a horrible financial decision.
My questions are:
Do I sell the car and downgrade to something more reasonable?
Or do I keep the car and pay off the balance and run the car until around 200,000 miles and then sell it?
Look forward to your advice/comments.
I'm learning a hard lesson.
Thanks,
Without more financial information I will only ask one question.
You say that your company requires you have a nice car.
And your work also requires to drive people around in your personal car.
Does your company compensate for this in any way?
What if instead of the Tahoe which costs you 570/month only in loan payment you get another car which costs you less - does your company remove some of your paycheck?
Other questions:
The loan balance is 9000, what is the car worth?
What is the interest rate on the loan?
Do you still tow the wakeboarding boat, and it the access to it still free?
Do you still go on road trips? Although a road trip does not mean a Tahoe, it might mean you have to only look for some types of cars, not for all.
Do you still want to drive the Tahoe? Did 3 years of driving it remove the desire to drive a Tahoe? I mean, you drove a Tahoe, if you change it to something else would the "want" come back?