The Money Mustache Community

Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Autumnwoods on May 19, 2015, 05:09:26 PM

Title: What to do about my expensive vehicle loan
Post by: Autumnwoods on May 19, 2015, 05:09:26 PM
Hi, first post here looking for some advice. I bought a new vehicle about a year and a half ago. Always drove old cars and trucks and I got caught up in the appeal of a brand new one. That allure is starting to wear off and I hate the monthly payment. I got a 0 percent loan so I financed the whole thing (tax, fees, everything). Came out to 25k and change over 60 months. Makes for a 430 dollar monthly payment. I am in sales with a territory covering about 150 miles. Reliability and driving dependable in poor weather is very important (live in snow belt) It's what I like best about the new truck, starts every time, plows through snow and gets me to where I need to go for work. Unfortunately, no company cars. They do pay for gas though. First baby is here so would like to spend that 430 on many other things. I still owe 18k. Carmax would give me What I owe on it.  I could pay 5-6k cash for a 10-12 year old 4x4 off craigslist with probably 125-175k  miles.  I'll drive 30k miles per year so realistically that old used truck will probably last 3 years give or take. Other option is to just keep making payments until I feel comfortable paying it off and then drive it until it dies. I hope 8 or so more years. Could keep making payments for 2 more years then pay the last 6k or so cash that I would have spent on a used vehicle. baby will be starting day care soon so it would be a huge relief to get rid of the payment. I could still make the payment with day care but it will be very tight.  I make 50k a year in a low cost of living small city. If all goes well I will be promoted within the next 2 years with around 100k salary. I'm working very hard for that day to come.

I just hate feeling like a slave to the monthly payment and wish I had read mmm material back then.
What would you do?
Title: Re: What to do about my expensive vehicle loan
Post by: Paul der Krake on May 19, 2015, 05:20:59 PM
http://www.mrmoneymustache.com/2014/12/01/all-wheel-drive-does-not-make-you-safer/

Used sedan or hatchback. Winter tires.
Title: Re: What to do about my expensive vehicle loan
Post by: RunHappy on May 19, 2015, 05:29:28 PM
Snow tires turned my ford focus hatchback into a beast during the New Hampshire winter. 
Title: Re: What to do about my expensive vehicle loan
Post by: Self-employed-swami on May 19, 2015, 05:32:33 PM
Canadian here, and our hatchback Yaris is great with snow tires on it!
Title: Re: What to do about my expensive vehicle loan
Post by: Retired To Win on May 19, 2015, 05:50:01 PM
Hi, first post here looking for some advice. I bought a new vehicle about a year and a half ago. Always drove old cars and trucks and I got caught up in the appeal of a brand new one. That allure is starting to wear off and I hate the monthly payment... Carmax would give me What I owe on it...

If you can get a Carmax deal that will let you walk away from that car clean, why not take it?  That will eliminate that $430 monthly payment without having to plunk down any extra cash.  Then go get that older, reliable and cheaper vehicle.

I've been driving a 1996 Dodge Dakota for about 10 years and I've never had a problem.  My wife drives a 1998 Subaru Forester and she's not had any trouble either.  The whole trick is to maintain the vehicles properly.

Good luck.
Title: Re: What to do about my expensive vehicle loan
Post by: Yonco on May 19, 2015, 06:04:33 PM
My dad always told me to finish what you started. I think you should keep it and pay it off. Make it a goal and prove to yourself you can pay it off early no matter what the circumstances. Lastly, consider it a learning experience. Debt is dumb, cash is king.
Title: Re: What to do about my expensive vehicle loan
Post by: TheThirstyStag on May 19, 2015, 06:14:20 PM
I can echo some of the comments here.  Winter tires are amazing.  I'd rather drive a RWD car with blizzaks in the snow than an AWD one with all-seasons. 

Cut your losses and buy something older for your sales job.  Equip it with proper tires when needed.