Is this a stupid idea?

Real quick background, the wife had to take a pretty substantial pay cut and money is very tight. We don’t live extravagant lives, we have basic tv service, don’t go out much at all, there’s really no areas of our lives we can cut back on other than car payments.

I’ve still got $6800 to pay on my 09, about 2 more years of paying $230 a month. I’m toying with the idea of trading it in for something cheaper to eliminate my payments, I figure if I could get maybe $17000 for a trade in value that would give me about $10000 to use for something cheaper and I could eliminate that $230 per month payment.

The only other vehicles I even consider are Subaru’s, my wife had a forester and now has a crosstrek and I’ve liked them both and based on what I’ve seen on autotrader I could come close to my estimated price on some decent used Subaru’s.

So, stupid idea?

 

What if you refinance the last 6800. That should drop the payment substantially.

 

how many miles on the taco?

 

I would try and ride it out

 

Getting out of debt is never a stupid idea IMO. Best of luck to you.

 

Exactly.

OP, do you NEED the truck? If no, and you can eliminate payments with an economically better vehicle, go for it.

 

id keep the truck depending on the condition. AT least you know the thing will run forever.

 

Getting out of debt will be the best thing you can do - However, I am of the opinion that certain types of debt are OK:
Car loan but not the insurance
Mortgages

in some cases loans - not student loans but a consolidation loan to capture all debt into a low interest "house" and pay it all down. this is more a strategy really.

Spending is limited to what you have in the bank - If you don't have it, save until you do and pay off cc's completely every month.

I use a cc with cash back rewards - everything goes on it and it gets payed off every month. This does 2 things - (1) the rewards for things I'm buying anyway and (2) more importantly, buffers my bank account from the points of sale - limits the exposure for fraud/hijack.

Re-fi on the existing loan can lower the payment to sub $200 - pay $200 and bank the $30 surplus - you'll pay off the loan quickly and free up a little to help out monthly.

 

^This.

OP, how did you come to that trade in amount? Seems a bit optimistic to me..but then again, I really don't know what your value might be.

You've already invested in the '09 - properly maintained, you can get x times 100,000 miles out of it...

You specifically mentioned basic TV. The best TV I get is free - over the air. 5.1 HD signal from local TV stations.

https://www.antennaweb.org/

Plus I hate paying for what was once free...

Good luck. You're current financial situation is temporary..

 

I don’t need a truck, obviously it’s nice to have but not a necessity. It’s got 110,000 on it. I tried looking for prices online and there’s not a single 09 or 10 in my area going for less than $18,000, and that’s only about 3 within 75 miles. That $6800 is already refinanced with only a 1.9% fee.

If I got something like a forester I’d be gaining a few mpgs, the wife’s forester used to get an average of 24 mpgs and I currently ave. 18

FWIW the wife doesn’t want me to give up the truck the same time she’s constantly stressed about money.

 

Depending on the condition of the truck and how many miles are on it you may be better off keeping the truck. Unless you commute 100 miles a day and it is just used solely as a commuter, then I'd re-think the choice.

 

What is kbb on your truck? 17k sounds high

 

Yes

 

17K for an 09' ? Ain't going to happen man. You can maybe get a trade in value of 12-13K which leaves you with 5-6K. So ask yourself what kind of car you can buy for that amount, the answer is, not many.


Do you have emergency savings setup, or are you hand to mouth?
Is YOUR income stable?
Is your income and monthly expenses a wash, in the black or in the red.

 

I'd agree with getting out of debt, but if you've only got 10k to spend to buy a used car outright, better hope/make sure it's a good one or you could end up in another hole trying to deal with an unrelialable vehicle. At least you know your Tacoma is reliable, that being said a $230/month payment is nothing to scoff at if you're in a financial pinch. I'd try refinancing it first like mentioned above and see if that makes the monthly hit more affordable.

 

OK, well seems overwhelming opinion is "dumb idea". Thanks all

 

Good Subie's are like Tacoma's, to get a good one you have to pay a premium.

You mentioned "trade-in". If you did this through a dealer, they would be taking at least a $3,000 premium for their time - no matter what they make you believe.

I am not on a budget at all, but cut the cable cord almost 4 years ago - like Jim mentioned.

Is a part time job a possibility? Delivering pizza's, or some such thing?

Do you have a 401k? You can usually do a 401k loan for any general purpose reason for up to 5 years for half of your vested balance. You could do a 401k loan, stretch out the debt for 5 years, drop the payment to about $120 a month, and then when things improve, pay off the 401k loan early.

 

Can you put the truck to work for you, some jobs you could make $ to help pay for itself?

 

opinions are like.....

OP this is your choice to make, what I would do isn't what you would like.

 

401k loans are rarely a good idea, and they are a terrible idea if it's being used for car payments