I have been lurking here for a while - you guys are so smart, I registered just to ask you for advice!
I have had my car for 3.5 years - it's a 2005 Subaru Forester. These are great cars, especially with Northeast winters!
When I bought the car, the dealership lied to me, telling me that the head gaskets, water pump, timing belt had all been done already at 100,000 miles. They were wrong, because within a year of buying the car, it needed all of these things replaced.
Right now, I owe $2,600 on it, and could sell it private-party for about $4,500. Aside from my car loan, I owe $1700 on a credit card. My only other debt is my mortgage which I have no intention of trying to pay off as I plan on selling in a few years, so I view my monthly house payment as rent, basically.
So, I was thinking of selling my car to pay off the loan and get rid of my car payments and buy a beater for $2,000 or less.
I know the risk that buying an older, cheaper car might come with a lot of repairs, but this car did too (I have put $4,000 into it in just straight up repairs since I have had it).
My monthly payment is $150. If I just paid that, it would be paid off in 18 months. I can't guarantee that I can put much extra toward it as I am underemployed and have two teenagers at home who are involved in a lot of different things - my budget is pretty strict and when I do have extra, it goes to the credit card, as my car loan is only 4% interest.
I love the idea of getting rid of my car loan, so that my total debt (aside from mortgage) is only $1700! But would I just be inheriting more problems? My car is stickered until October, and may need some brake work to pass again. I need to have a reliable car as I am basically a taxi service to my family. I live in a rural location so there is no public transportation or anything like that - nor do I have friends or family that could loan me a car if mine has to be in the shop, etc.
I feel kind of torn. My son is a new driver, and the Subaru has been good to us in the winter, plus the safety ratings are fantastic, which is no small thing with a 16 year old driver in the house. I keep thinking I'll just go ahead and keep making the payments, but with all the repairs on top of the payments.. sometimes it's overwhelming. So if I sold it and bought a beater, I might have to do some repairs, but there wouldn't be a car payment. And maybe I would luck out and find a car that didn't have a bunch of problems? Or is that a pipe dream? I would love to be able to get a small little sedan with good mpg, but I need something that will fit skis. (Not for me, for the boy - and once he graduates or gets his own car, I can then buy my little sedan)
What do you guys think? Am I close enough to having it paid off that I should just do it? Or should I sell it and get rid of that debt, putting me so much closer to having it all paid off?
Thanks so much for reading this and for any opinions you want to share!