Sell or keep vehicle?

[Hilltopmom]

We have recently had our take home $ reduced by $1500 a month. It's not going to go back up.

 

We ( for the first time ever) have 2 car payments (bad timing). Trying to decide if its worth selling our 2 yr old large vehicle that we no longer need & downsizing to a regular mini van. We need AWD which means it's a specific van we'd need to find used.

 

But, the vehicle we'd sell still has quite a bit left to pay on it. In order to come out even, with no loan, we'd need to buy a much older mini van & spend about $8000 of our savings, to get rid of the $500 current loan payment.

 

I knew that buying a new vehicle would result in losing $ if we sold it early (we usually keep them till they die), but at the time, that was the vehicle we needed. We no longer need it & I don't want to keep paying for it but hate to lose so much $ into it too.

 

Opinions?

Ugh, I hate $ decisions.

Is there a formula somewhere for deciding the best option (sell car with loan, vs trade for old car with no loan but need to spend cash to get it since trade in won't be enough?)

 

Eta- we are cutting back in other areas too, but the car payment is a big chunk of change.

Edited July 27, 2016 by Hilltopmom

[Ottakee]

Would a smaller/older car reduce your car insurance rate as well?

[Hilltopmom]

Yes, it would, good point.

I wish we could just get any older minivan but we absolutely need AWD at our house, so we're limited to a certain (more expensive, of course) one.

[displace]

So a new vehicle would be $8,000 and you owe $500 total? Or $500/Mth?

 

You can calculate exactly the costs of a new vehicle vs what you owe, gas and wear/tear, insurance and compare them.

 

Can you consider going without a second vehicle? Check out Mr. Money Mustache .com for some unconventional money saving advice. $1,500 is a lot to make up per month.

 

We can probably help with the math if you let us know how much total you owe on the vehicles. I say vehicles because it may be worthwhile to have both vehicles cheaper.

 

And why do you need AWD minivan? Is it passenger load plus no roads?

Edited July 27, 2016 by displace

[Tap]

Im confused by your wording. Break it down into two separate things.

 

The big one that you already have the $500 payment on.

How much do you owe?

How much do you think you can sell it for? (is this private or trade in?)

What kind of gas mileage does it get?

How many miles do you drive in it a week?

How much is the insurance?

 

 

The vehicle that would be replacing it:

How much would it cost outright?

What year is it? (affects interest rates if you need a loan)

Will it need maintenance this year? Tires? Scheduled maintenance?

What kind of gas mileage?

How many miles each week?

How much is insurance?

 

 

 

[JustEm]

Can you sell both cars to get rid of both payments and then go to one car for awhile and buy a used vehicle with cash?

[Guest]

Can you sell both cars to get rid of both payments and then go to one car for awhile and buy a used vehicle with cash?

That would be my solution as well - I've done the one vehicle thing with kids and it was a challenge but we didn't have much of a choice. After about a year we were able to buy a second used vehicle to make life easier again for me.

[JustEm]

That would be my solution as well - I've done the one vehicle thing with kids and it was a challenge but we didn't have much of a choice. After about a year we were able to buy a second used vehicle to make life easier again for me.

We've done it a few time. When I we got married my dad gave me the kids' car. I had to say no thanks because the added cost to insurance worth it, even if the car was free. We eventually bought a second car off my brother once we had 2 kids and I needed a car more often. Then that car was totaled. Instead of using the insurance payout to buy a replacement car we paid off our minivan. We will eventually get a second car again but are in no rush. It takes a lot of getting used to but doable for our situation. But probably not everyone

[Hilltopmom]

Ok, I can get all the numbers together later, heading out for the day.

 

The big car is $500/ month payment. (Well, it's a bit less but we pay $500).

 

We don't need to cut back a full $1500 a month, that gave us extra money to play with.

(Eta- and a decent amount going to savings each month)

 

We really can't go back to 1 vehicle, we did when we just had littles, but the teens need to get to their activities & college classes & we live 20 minutes out in the country., no public transportation. If we had to, we'd be stuck home all week (Dh works in a factory, no flex hours) & that would actually save tons of $ because the kids would need to quit everything. But we are trying hard to avoid that.

 

The only type of vehicle we can all fit in is a mini van & we need AWD due to the weather here & our location (rural, atop a big hill, dirt driveway, a few minutes south of Canada- long winters). We currently have a full size van that was purchased to convert to a wheelchair van for our child who passed away recently, so we no longer need such a large vehicle.

 

Dh won't sell his car that has a payment, only the big vehicle. I mean, if we absolutely could not make ends meet, we would. But it's just the big van that we no longer need, so since we have to cut back, it makes sense to sell that one.

 

Thanks all. Will get numbers later.

Edited July 27, 2016 by Hilltopmom

[Hilltopmom]

We owe $16,000. We'd get $28,000 for a trade (or sell for a bit more, if we find a buyer).

 

We could buy what we need for between $20,000- $28,000, depending on how old we want to go with a mini van. We'd keep that one until it started having problems, but after dh's car is paid off (3 years).

 

If we sell it & take $ out of savings to pay the difference in getting something smaller, we'd be taking out half of our savings fund.

 

The big one gets terrible gas mileage, but an AWD minivan isn't great either, but better.

Drive about $10,000 miles per year.

Those are the numbers I know right now.

[JustEm]

We owe $16,000. We'd get $28,000 for a trade (or sell for a bit more, if we find a buyer).

 

We could buy what we need for between $20,000- $28,000, depending on how old we want to go with a mini van. We'd keep that one until it started having problems, but after dh's car is paid off (3 years).

 

If we sell it & take $ out of savings to pay the difference in getting something smaller, we'd be taking out half of our savings fund.

 

The big one gets terrible gas mileage, but an AWD minivan isn't great either, but better.

Drive about $10,000 miles per year.

Those are the numbers I know right now.

What do you owe on the other car, what is the monthly payment, and what is the interest rate? Depending on all the numbers it could be worth it to sell the van, pay off the other car to eliminate that payment, then get a loan for a minivan. You would have to run the numbers of course but depending on current rates it may work better.

[Hilltopmom]

I actually have no idea about the other car, I'll have to ask dh. I put $500 a month on it, he's only had it for a year, it was used but around $28000 I think.

That's a good idea though, thank you. I'll tell dh.

[Hilltopmom]

Hmm, he only owes $7000ish.

 

Now I'm leaning towards paying that one off alltogether, getting loan for smaller van. Still need some more numbers from our files.

[LucyStoner]

Am I correct?

 

You can sell the large vehicle for $28,000 (maybe more) and have $12,000 after paying off the loan

 

You owe $7000 on your husbands commuter car. So you could pay that off with the large car sale proceeds.

 

That leaves you $5000 to put towards an older AWD 7 passenger van.

 

Another thought? Can your husband carpool or be dropped off at work when you guys need the car during the day?

[displace]

Or maybe have college kids contribute some funds. They can work on campus or anything to help contribute insurance, payments, gas, etc.

[StaceyinLA]

Am I correct?

 

You can sell the large vehicle for $28,000 (maybe more) and have $12,000 after paying off the loan

 

You owe $7000 on your husbands commuter car. So you could pay that off with the large car sale proceeds.

 

That leaves you $5000 to put towards an older AWD 7 passenger van.

 

Another thought? Can your husband carpool or be dropped off at work when you guys need the car during the day?

If this is the case, I'd sell the large vehicle, pay off the husband's, find the van I wanted in an older model that I could buy for the $5,000 if at all possible, then just start socking away a "car payment" monthly for repairs and/or replacement once I got enough together. That would give you time to adjust to the lower income while leaving your savings intact.

[Catalytic]

I believe the Toyota Sienna is the only minivan available with AWD, and I'm betting if you manage to find one for $5k, it's going to cost you a hell of lot in repairs.  I'd sell the big van, pay off DH's car, and then buy a much newer Sienna, even brand-new (I was looking to trade my non-AWD for an AWD late last year, and it wasn't even worth buying used, they were the same price as new)...you'd still have a car payment, but only one, and it would be less than the $500 if you put the leftover money toward it.

[LucyStoner]

The old Dodge and Chrysler minivans had AWD is an option through the 2004 model year. My brother has one of these and it runs fine. They aren't perfect vehicles and finding one that is in good shape with AWD might be tricky but they are out there and cheap.

 

We have an old Sienna. We've had it for it 2 years now and no major repair costs.

 

The 2004 and newer Siennas have AWD as an option. There are more than a couple 2004-2006s with AWD available in my local area for not much more than $5000. Toyotas, if well cared for can last a long time. You could put the $5000 down and take out a small loan for $5000 for a somewhat newer one which would be a small payment for a short time.

[Hilltopmom]

The irony is we sold our 2006 AWD Sienna, still in great shape, 2 years ago to buy the big van. Sigh.

[displace]

(Hugs).

 

I just wanted to say sorry for your loss and the situation your in now too.