Money-wise......is it better to keep my car or sell it?

[Minnie_me]

I own a 2007 Mercury Mariner. I want to get a smaller car that gets better gas mileage. Right now, the blue book value for the car is $13,000. I owe $9,000 on it.

What's the best move? To sell the car and get the smaller, cheaper car I want? Or to keep it for two more years until it's paid off?

I really am so bad when it comes to money issues, and I'm trying to get better......but it's these sorts of situations that I never seem to quite understand. And that's why I love this board!!

 

[Marionnette]

I own a 2007 Mercury Mariner. I want to get a smaller car that gets better gas mileage. Right now, the blue book value for the car is $13,000. I owe $9,000 on it.

What's the best move? To sell the car and get the smaller, cheaper car I want? Or to keep it for two more years until it's paid off?

I really am so bad when it comes to money issues, and I'm trying to get better......but it's these sorts of situations that I never seem to quite understand. And that's why I love this board!!

You already took a hit with the depreciated value of the car when you drove it off the lot. If you were to sell it now, you would get (maybe) $4K from the sale after paying off the note.

Then you would have to buy another vehicle which is certainly going to cost you more than the $4K that you got from the Malibu. If you buy a brand new car, you will take another hit for the depreciation as soon as you drive that one off of the lot.

How high will gas have to go and how many gallons would you have to save in order to make up the difference? I think that you would probably need to drive a lot of miles every week in order for it to be worth it.

 

[BridgetBordeaux]

Generally you are best to keep it for as long as you can stand it after it is paid off. That is purely the financial side. To satisfy your emotional side, be sure to have the vehicle thoroughly cleaned and shined up every so often.

Unless the vehicle is a total lemon, the cost of tires, brakes, a battery, and a few repairs over the next 2-5 years will not cost nearly as much as the depreciation and insurance expense of a new car.

If you closely follow the suggested maintainence schedule, it should last a long time. Engine oil, antifreeze, and transmission fluid need to be serviced as the factory suggests. If not, you will have problems right about the time you have paid off the vehicle.

Don't keep it 2 years................keep it 5 and use all the money you saved to buy your next one with a nice down payment.

Our cars: 2002 with about 185k (bought in 2004 with 27K)
1998 with about 115K (bought new in late 1997)