Dilemma about debt

**pammy** · 01-23-2006, 10:38 AM

Any sage advise much appreciated. Here's the scoop:

We are doing the debt snowball according to Dave Ramsey. Have got baby step 1, the $1000 EF in place. Am currently working on baby step 2.

In October I put my car up for sale. At the time I owed just under $20,000 on it and would have had to take out a loan for the difference of being upside down on the car loan (too much trading in, stupid, stupid!). It sat for two months and no one looked at it. Out of frustration (along with not being able to find dd a car and I had a decent used car she could afford) we went and brought it back from the car lot, deciding to keep it and pay it off.

Dh is better with the fact that I'm keeping my car, as it is an '04 model with about 28k miles on it. It's a good dependable car that we would keep for a very long time. We've got that as our #1 in the debt snowball. As of now we have got the amount down to $9,975 that we owe. That's 10 grand we've been able to knock down on that loan. Doing great, right? Yeah. But here's my dilemma: Private party value on the car according the Kelly Blue Book has the car's worth at around $14,000. Now I can't keep my mind off wondering whether I should sell it. Dh says no, keep the car. I'm starting to wonder if that's smart or not.

On one hand we're doing great and have a pretty decent amount to use for the snowball per month. We've got traction and I can see the car being paid off in 6 months easy. On the other hand I could sell the thing and buy a used paid for car with the profit. And start working on my last debt in baby step 2, my stupid student loan. Should we go that route it would increase the amount of our 'shovel' by 50% from the car payments I'm making now, thereby gettting the student loan paid off that much quicker. Or am I going overkill? Is 6 months worth buying another car that I'm not sure about??

If you woke up in this situation, what would you do? I'd love to hear someone else's pro's and con's. Maybe just reassurance. TIA!!

**sunshine** · 01-23-2006, 11:16 AM

well . .. . . if you can pay the car off in 6 months and have a dependable car that you know will be good for a long while. I'd probably keep the car.

Also- your dh wants you to keep the car- and since it's not causing a tremendous struggle financially at this point-- I'd keep it, to maintain peace in the household.

**bee9984** · 01-23-2006, 11:31 AM

For us we have gone this route too! we have had a leased vehicle and then sold it back to the dealership plus paid money to them to make up the difference.

We have also gone the route with van payments which we no longer wanted to make payments on so what we did is take it to a car dealership for second hand cars, they paid our bank for the amount left owing and included in the deal was a second hand car to us which lasted us a very long time. So we got rid of our van payments and scored a reliable car in the process. The car was older but it wasn't rusted out and helped us out big time. Second hand dealerships can cut the $ amount on their vehicles and still make a profit.

Just think of what you could pay off with all that extra money you would have spent on your car payments in the process of those 6 months.

Anyhow, that is just what I would do and have done

guest7 · 01-23-2006, 01:04 PM

keep the car!

**Mumzy** · 01-23-2006, 01:24 PM

Keep the car. It doesn't have that many miles on it. Reliable I am sure. So six months isn't that long to wait. Who knows you might be able to put any unexpected cash toward it and be surprised how fast it can be paid off. I would hold off getting a car for dd though. Perhaps she could earn her own? Then go for the student loan. I know you want things paid off in a snap. But down the road you will be happier you didn't sell the car.

**Logansmom** · 01-23-2006, 01:37 PM

Keep the car- You will be able to keep that car for a long time- (You know about your car), you might buy a lemon and be back where you started!!

**baronmom** · 01-23-2006, 01:48 PM

If you only have 6 months left to pay on the car, you should just keep the car. Why take the chance that you will get stuck with something not reliable when you know what you already have.

**pammy** · 01-23-2006, 02:49 PM

Okay, great! I love feedback! Thank you all for the many points of view.

Yeah, I think I'm just in too much of a hurry sometimes.

Parts of me wants to sell, the other part doesn't. Or maybe I just wanted someone to say that it's OKAY to keep it.

Mumzy, the used car I did have (that I drove while this new car was up for sale) is the car I sold to dd, she bought it from us with money from the sale of her first car (a cheapy car we paid cash for) plus $500 cash she earned herself. Am glad to know that other people recommend thier children earn their vehicles, thanks!

**AmyBoz** · 01-23-2006, 07:58 PM

I'm basically in agreement with everyone else here.

Hope you figure out what you want to do and are happy with your decision!

**Michelle** · 01-23-2006, 08:12 PM

Originally posted by AmyBoz
I'm basically in agreement with everyone else here. Hope you figure out what you want to do and are happy with your decision!

**juliek** · 01-23-2006, 08:18 PM

I think even Dave would say to keep the car ~ but to maybe work even a bit harder to pay it off faster. And you're already trying to get rid of the RV, right? Once that is gone, I think you will feel much better!