OT:Trading SUV for car

[mohawkmom1113]

I just wanted to ask some of the experts out there about trading our SUV for a car. We have negative equity in the SUV (not much but some, especially since their value went down). We are looking to trade in our 4-Runner for a Camry. Would the gas savings off-set the negative equity, which is about $2300?

 

[TomD]

over a period of time it would. You are trading out of a suv that weighs more there fore uses more gas.


On a side note look into GAP Insurance either from your insurance Company or the dealership.

Anytime you have negitive equity is a good idea to get GAP.

 

[MAGICX2]

over a period of time it would. You are trading out of a suv that weighs more there fore uses more gas.


On a side note look into GAP Insurance either from your insurance Company or the dealership.

Anytime you have negitive equity is a good idea to get GAP.

I have GAP insurance on my '00 Explorer and the way I understand it is that if I have an accident and total my vehicle the GAP insurance will make up the difference if my auto insurance dosen't pay enough to pay off the loan. Does it cover more?

 

[DianeV]

Its also if the car gets stolen and is a loss

I think what the poster meant is with negative equity you are going to have a loan that is always going to be higher then the 'value' of the new vehicle. Banks will only pay off a certain amount (I was told trade in value) so with that negative equity on your loan you could have quite a balance if something happened. The GAP insurance covers that.

We just got into a car with the same situation of neg. equity and got the GAP insurance..it wasnt expensive

 

[tlbwriter]

You're losing not only the negative equity, but also a lot of what you've already paid for the SUV (I assume it's relatively new since you're still upside down). For example, say you paid $20,000 for the SUV, and it's now worth $10,000, and you owe $12,300. You're not only losing the $2300 in negative equity that you have to pay for, but you've also lost the $10K that the car dropped in value. Well, you didn't lose all of it, because you did get some use out of the car. But if you trade the SUV now, you're only driving it during its most expensive years, and not taking advantage of the years where it costs less to own it. And what's the difference in MPG on the Camry? Unless it's a big difference, and you put a lot of miles on your vehicle, you may never make up what you're losing.

 

[KirstenB]

Another point to consider is maintenance. We've always had Camry/Civics and they're very cheap to maintain. If you use your 4 Runner for any towing, transmission maintenance is a biggie.

 

[waspnest]

I know that the higher gas prices are going to make the payback period shorter, but really, you'd have to drive a seriously lot of miles to make it back.

I just found this site: well, I don't have enough posts to add in a url, but let's just say it starts with the usual three letters then has fueleconomy then ends with gov.

I pulled up an 8-cyl 3 runner and a 6-cyl 3 liter Camry. The annual differenct at $2.61 per gallon is about $400.

I also found a section where users give what they get from the cars and it gives a user average. With 28.3 MPG for the Camry and 23 MPG for the 4Runner, even if you're paying $4 per gallon for gas, and drive 15,000 miles per year, the difference in annual cost is $489, so it would take you 4.7 years to payback just that $2300. Plus as others have pointed out, you've lost depreciation too.

Getting a fuel effieicnt car (even if you're paying more for it) can be a great financial decision if you're looking for a new car anyway, but it just doesn't make financial sense if you are getting rid of a perfectly good vehicle to do so, especially if you're upside-down on it.

 

[disneysteve]

My advice - trade in the SUV for a late model used Camry. That way you avoid the new car rip-off of paying for the rapid depreciation that occurs in the first 2 years (which it sounds like you've already done with your SUV - why do it again?). You get a much better deal buying used, plus your trade-in will cover more of the purchase price of the used car. A well-maintained Camry should easily serve you well for 150,000 miles. Let someone else drive the first 20 or 30K and you take it from there.

 

[Mac and Us]

I too have a 4 Runner (6 cylinder). I absolutely love it. The other day I asked my husband if we should consider trading it for something more economical. He said no way. We're not upside down in our loan so we own probably 65-70% of what's the trade in would be.

I started looking at the gas savings at $3.00 gallon. I drive approx. 16,000 miles per year.

It just isn't worth it. Keep it until you need to buy a new vehicle.

By the way: I've owned 1 Chevy Blazer, and GMC Jimmy's and my 4 Runner beats them out not only in gas mileage but driveability, comfort, features, sticker price and resale value.

 

[kfeuer]

Consumer advocate Clark Howard has been advising not to trade out vehicles in situations like yours. It would take a LONG time to make up a $2300 loss. I would keep the SUV until it's paid off, then get a more fuel efficient car.

 

[C.Ann]

I have a family member who won't consider owning ANYTHING but an SUV.. They have been purchased both used and brand new and the one consistent complaint is that repairs and parts are much, much higher - not to mention the costs involved with gas.. Over the long term, I think that cost wise a traditional car would be more economical, but in your particular case, I'm not sure that would apply if you still owe money on it..

 

[tlbwriter]

I have a family member who won't consider owning ANYTHING but an SUV.. They have been purchased both used and brand new and the one consistent complaint is that repairs and parts are much, much higher - not to mention the costs involved with gas.. Over the long term, I think that cost wise a traditional car would be more economical, but in your particular case, I'm not sure that would apply if you still owe money on it..

Your family member may just be purchasing the wrong SUVs. The OP has a Toyota, which is one of the most consistently reliable makes you can buy. I wouldn't worry too much about the upkeep costs on that one.

 

[C.Ann]

Your family member may just be purchasing the wrong SUVs. The OP has a Toyota, which is one of the most consistently reliable makes you can buy. I wouldn't worry too much about the upkeep costs on that one.

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That's correct - Toyotas are definitely more reliable, but the parts and repairs are still quite high, just not on a more frequent basis..

 

[dvcgirl]

Your family member may just be purchasing the wrong SUVs. The OP has a Toyota, which is one of the most consistently reliable makes you can buy. I wouldn't worry too much about the upkeep costs on that one.

I have a 97 4-Runner...maintenance has been very low. It's a very reliable car. You're only going to get about 8 mpg more with the camry over the 4-runner.

 

[juliegirl]

I had the exact same thought earlier today, so just wanted to chime in to say thanks to everyone who has posted why NOT to trade in.

I didn't think it would work out to be that much of a savings, but had too much brain strain this afternoon to figure it out on my own

Now you've all just confirmed it!

But another factor to consider is any savings on regular insurance/vehicle registration. My DH '05 Nissan Titan was over $550 to register for the year . My '05 Chevy Equinox is about $360 for the year, and my 2000 Taurus used to be less than $200 That could almost double the amount saved on fuel and is worth considering.

My plan is to drive the Equinox into the ground and then find a decent midsize sedan again. I liked the Taurus, it was a deeply discounted, loaded model program car and although I did have to replace the transmission twice , we had bought the extended warranty so all was covered. (First and only time I have bought the extended warranty and to this day, very grateful to have made that decision!)

 

[momimouse27]

Thanks for this thread everyone! I have been talking alot to my husband lately about getting rid of our 1 1/2 yr old Suburban which gets 14.5 mpg. I like the car, how it drives, everything about it except the gas mileage. I wasn't crazy about the mpg when it was only $1.29/ gallon.

We are way upside down in this car...owe about $8000 over blue book and the dealer told us that with an SUV we wont even get blue book value because the lot is flooded right now with SUV's. Boy, I miss my little Town & Country After listening to all the comments, I think I'll just pay my SUV off, and by that time with all the new hybrids coming out, I'll be able to get all the room I need and may be able to get 30 or 40 miles to a gallon!

 

[mohawkmom1113]

Hi All!

Thanks for all the advice. My DH and I discussed it at lenght when he got home from work and decided that it is just not worth it. We both love the 4 Runner and it has the room we need. My DS is only 12 and he is 5'5"!!! That is as tall as I am I am just wondering how much more he will grow!!
We also didn't like the negative equity, it was too much and I maybe drive 12000 miles a year. It is mostly running DS and DD to football practice, games, and friends houses. Again thanks to all who responded. I need to hear that from people other than my own family, cause you never want to let your family know that they were right