Need advice on whether to sell car to pay off some bills | TigerDroppings.com

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AnonymousTiger
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Southern by the grace of God
Member since Jan 2012
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Need advice on whether to sell car to pay off some bills



I am considering making a move with my vehicle in order to help pay off some credit card bills. Here is the situation I need advice on:

My vehicle has about $10,000 in equity in it (according to what Carmax offered for it and how much I owe). I am considering taking the offer and using about $8,000 to pay off my credit card bills. Note, I have so much in credit card bills because of a difficult time a while back between jobs.

Here is the twist I need help with. Would it be a bad move to use about $1,500 to put towards a lease on a truck? My new truck payments would only be about $300/month, which is only $30 more than what I am paying now. I don't drive much so I should never go over the lease miles.

If I do this, I will be free of credit card bills and still have a reliable vehicle without much increase in my monthly note. Obviously, I would not own the new vehicle, but I typically do not keep a car more than a few years anyway.

I know some advisers like Dave Ramsey loathe leases, but what do you guys think? Take the offer and the lease, or maybe something else?







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Powerman
LSU Fan
Corpus Christi, TX
Member since Jan 2004
120878 posts

re: Need advice on whether to sell car to pay off some bills


If you can get a good trade in value on the car the lease option doesn't sound bad

The 30 more a month won't be near as much as the useless interest you'll be paying on the CC debts. If you can use that cash flow to knock your CC debts down considerably it's probably a smart move.






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AnonymousTiger
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Southern by the grace of God
Member since Jan 2012
2341 posts

re: Need advice on whether to sell car to pay off some bills


I keep working through the plan in my mind, and I don't see many downsides. But I really don't know much about leases other than my research has taught me over the past couple of weeks.

I hear a LOT of people talking about how leases are bad financial moves, but maybe in my particular situation it could pay off?






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Layabout
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Baton Rouge
Member since Jul 2011
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re: Need advice on whether to sell car to pay off some bills


quote:

But I really don't know much about leases other than my research has taught me over the past couple of weeks.

First you need to find a factory-sponsored lease deal, preferably a sign-and-drive, and buy exactly the model and equipment specified in the terms. Don't try to customize it.

To start, go to edmunds.com and look under special offers to shop by make. Once you find something interesting, go to the manufacturer web site and get the details. You probably aren't going to find much in the way of truck leases though. Think about an SUV instead.






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kywildcatfanone
Kentucky Fan
Wildcat Country!
Member since Oct 2012
20467 posts

re: Need advice on whether to sell car to pay off some bills


I am a Dave Ramsey fan, and hate leases as well. If it were me I would pay off the 8K in credit, and use the other 2K and whatever money you have and buy a vehicle instead of lease.
I hate the thought of paying money for a vehicle I have to give back and get nothing for, but that's just me.
It eliminates the payment altogether and you put that money back in your pocket each month.






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LSURussian
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Baton Rouge
Member since Feb 2005
84318 posts

re: Need advice on whether to sell car to pay off some bills


If you are happy with your current vehicle, you could research refinancing it and apply the surplus amount (equity withdrawn) to your CC balances and thereby avoid the lease situation.





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AnonymousTiger
LSU Fan
Southern by the grace of God
Member since Jan 2012
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re: Need advice on whether to sell car to pay off some bills


quote:

If it were me I would pay off the 8K in credit, and use the other 2K and whatever money you have and buy a vehicle instead of lease.


I've thought about this, but have had absolutely no luck in finding a reliable car in the $2,000 range. Seriously, it's not my pride, it is just really tough to find something in that price range that will be reliable for a few years.






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AnonymousTiger
LSU Fan
Southern by the grace of God
Member since Jan 2012
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re: Need advice on whether to sell car to pay off some bills


quote:

If you are happy with your current vehicle, you could research refinancing it and apply the surplus amount (equity withdrawn) to your CC balances and thereby avoid the lease situation.


I haven't looked into this yet. I will see what I can do before I make any other move.






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kywildcatfanone
Kentucky Fan
Wildcat Country!
Member since Oct 2012
20467 posts

re: Need advice on whether to sell car to pay off some bills


quote:

I've thought about this, but have had absolutely no luck in finding a reliable car in the $2,000 range. Seriously, it's not my pride, it is just really tough to find something in that price range that will be reliable for a few years.




I hear ya, but check your local classfieids and craigslist for private party sellers. You can find some decent deals on a 2K vehicle if you look hard enough.






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HeadyMurphey
LSU Fan
Los Santos
Member since Jan 2008
15869 posts

re: Need advice on whether to sell car to pay off some bills


I think he meant use the 2k towards a new vehicle, not purchase a 2k vehicle. If you are already paying 380, you should be able to get a good vehicle and probably reduce your current payment.





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wegotdatwood
Arkansas Fan
Member since Aug 2009
17094 posts

re: Need advice on whether to sell car to pay off some bills


Don't lease, horrible idea.





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Layabout
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Member since Jul 2011
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re: Need advice on whether to sell car to pay off some bills


quote:

f you are already paying 380, you should be able to get a good vehicle and probably reduce your current payment.


He's still on that payment merry-go-round forever. A six-year note and what has he got? A worn-out POS that is eating him alive with repairs. Get a brand-new Honda Pilot for $269 a month for three years ($330 a month with no money up front).






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GenesChin
Ole Miss Fan
The Promise Land
Member since Feb 2012
12947 posts

re: Need advice on whether to sell car to pay off some bills


quote:

I hate the thought of paying money for a vehicle I have to give back and get nothing for, but that's just me.


If you lived in NYC and you paid for a subway pass instead of buying a car, would you think that was a bad deal? You are paying for the utilizaiton of that vehicle. In his case, it appears that leasing may be a solid option. Seems more like you just have to price the cost of using that vehicle and make a comparison.

Remember the differences in costs of maitenience and such of leased vehicles vs 2000$ craigslist vehicles that are old






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I Love Bama
Missouri Fan
Alabama
Member since Nov 2007
33268 posts

re: Need advice on whether to sell car to pay off some bills


Sell the car and pay off the bills.

Put $2,000 down on a used car that you buy for $5,000(PLENTY of reliable ones in this range).

Pay it off in a year with $250 a month


This is what I would do.



This post was edited on 8/10 at 7:35 pm


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CompanyMan
Mississippi St. Fan
Member since Jan 2013
36 posts

re: Need advice on whether to sell car to pay off some bills


quote:

Sell the car and pay off the bills. Put $2,000 down on a used car that you buy for $5,000(PLENTY of reliable ones in this range). Pay it off in a year with $250 a month This is what I would do.


I agree 100%






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LSUtoOmaha
LSU Fan
Nashville
Member since Apr 2004
21277 posts

re: Need advice on whether to sell car to pay off some bills


quote:

Sell the car and pay off the bills.

Put $2,000 down on a used car that you buy for $5,000(PLENTY of reliable ones in this range).

Pay it off in a year with $250 a month


This is what I would do.


Do this






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LSUtigerME
LSU Fan
Walker, LA
Member since Oct 2012
817 posts

re: Need advice on whether to sell car to pay off some bills


quote:

If you are happy with your current vehicle, you could research refinancing it and apply the surplus amount (equity withdrawn) to your CC balances and thereby avoid the lease situation.


Do this if possible. That's assuming you are happy with the existing truck. It's the best option for what you're looking for. To keep a similar payment shouldn't extend note more than a few years.

Also, in my experience, especially on trucks, carmax will lowball the shite outta you. In cases I've got a quote from them, I sold my truck for 2x what they offered, and traded my car for $5k more.

As for leasing, they are not the devil Dave Ramsey makes them out to be. If you understand what you're getting into, they could actually be financially responsible.






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foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
30530 posts

re: Need advice on whether to sell car to pay off some bills


See if you can refi the auto loan to convert some of that equity to cash. Use the cash to pay the credit cards.

Carmax (like any dealership) isn't going to make an offer that is "fair", their offer probably builds in a couple of thousand they will have to pay to inspect the car, clean it up, warranty it, etc. in order to put it on their lot. So the car is probably around a $12K asset, plus you are going to pay the dealer a second time for your replacement. So I'd seriously look into keeping it and using it to get an auto loan instead.






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Double Oh
Louisiana
Member since Sep 2008
3408 posts

re: Need advice on whether to sell car to pay off some bills


1-Sell the car

2-Pay off you CC's

3-Take the 2K and buy a beater

4-Save, save, save till you can move up in car and pay cash for it.


That's what Dave Ramsey would do






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foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
30530 posts

re: Need advice on whether to sell car to pay off some bills


quote:

That's what Dave Ramsey would do


Probably. But this is one area where DR is wrong.

The problem with cars isn't usually the loan. Auto loan rates are normally fairly low. If you go to Penfed, for example, their loan rates are below the rate of inflation, which is better than paying cash up front.

The problem with cars is that they depreciate so quickly, especially new vehicles. If you buy something worth $30K new that is only worth $24K next year, that's your problem right there. You can get full value out of it but only if you really take care of it and drive it for 20+ years, and most people don't bother since they are too eager to get the latest model.






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