Sell the SUV?
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Thread: Sell the SUV?

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    Default Sell the SUV?

    We are just starting our DR debt snowball. We have 47,000 in debt to get through. One of the things I'm thinking about is selling our SUV. We owe $14,000 and to KBB and Edmunds its only worth about $9,000 private sale. It's a Toyota with about 100,000 miles on it so it will run a long time. It would take about 5 months for us to save up the difference and just sell the SUV. When we sold it I would make sure we had about $2,000 to buy a different car for me to drive.

    Does it make sense to do that? Or do I just put it in the debt snowball and pay it off since it is a reliable car that could easily last me quite a while? I'm thinking sell but I need some other advice. Our goal is to get our of debt quickly.

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    Our goal is to get our of debt quickly.
    What caused the rush - do you have some toxic loans, extra high rates? (list them, we can give you better advice)

    The car sounds like a winner, I wouldn't sell a Toyota that has only 100,000 miles on it. You probably have need for a reliable car, keep it. And use the $5000 in 5 months to pay down debt, or to invest to build wealth for your future.
    A big mistake that most people make is to spend their income on prepaying debts - and cause themselves to miss out on a million dollar 401k.

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    [QUOTE=old guy;4112424457]What caused the rush - do you have some toxic loans, extra high rates? (list them, we can give you better advice)

    We have been headed down hill financially for quite a while and my husband has recently decided to take a part time job in order to pay it off. I don't want him to have to work for many many years to get through this. We are also in a small two bedroom house which we are renting. We have three kids who will be needing some more room in the next few years. I'd like to make our next move to a place we can buy, instead of moving to another rental. I'm hoping to move in 18-36 months. I think that's why selling the car is on my mind. We can always find another car, but getting out of debt will allow us to give our kids a bit more room more quickly. Thats where my mind is now anyway.

    Our debts: 401k loan - 2200
    Sallie Mae - 7300
    Personal loan from Credit Union - 8300
    2nd personal loan from CU - 5100
    Credit card - 8000
    SUV - 14000

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    401k loan - 2200
    Sallie Mae - 7300
    Personal loan from Credit Union - 8300
    2nd personal loan from CU - 5100
    Credit card - 8000
    SUV - 14000
    The revolving signature loans are the high interest loans - the 2 CU loans and the Credit Card. That's $21400, probably 12% to 20% rates. The amortized loans - 401k & Sallie Mae, $9500, are medium interest loans, 5% to 8%. And the $14,000 SUV loan is collateralized, low rate, maybe 3%.
    That's about $45,000. I would prepay the high rate loans and keep the SUV loan full term. And keep the 401k and the Sallie Mae loans. Work on the 2 CUs and the Credit Card, $21,400. When those are paid, pay minimums on the other loans and save for a house down payment.

    As for buying a house - don't hurry. Put a clothesline across the kid's room and hang a curtain there - one side for boys, one for girls. Lots of us grew up that way, it's no bother to kids, they don't even notice.

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    Keep the car. Put the $5000 on the debt. You didn't get into debt in short order. You can't get out of debt in short order. If this is a good vehicle that will last a long time ( like you say... and old guy ) then why get rid of a good one for something that possibly isn't.
    You're wanting a quick way out of a lot of debt ( who doesn't ) but you'd be cutting your nose off to spite your face as my grandmother would say.
    Cut back, budget and pay extra. If YOU can get a part time job then try that also.
    My vote is keep it and cut back other ways. $5000 would go a long way fairly quick on that $47,000. Plus the cutting back. It's called snowball.
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    How much is your house hold income and what state? I would eliminate loans that can come back and bite you like the Sallie Mae and the car. Repossession and garnishment will ruin your credit, the other will not be as bad.

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    Given your stated goals (ie: getting out of debt as quickly as possible) i would definately sell the SUV. Some here would keep you in debt longer, classifying it as "managable debt". The only truly managable debt is no debt, imho.

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    I would be highly concerned about the repair costs that will end up being needed on a $2K car. More than likely you would end up spending at least $5K within the first few years anyway, if not more.

    I would keep the SUV and start snowballing.

    How much will the second job be bringing in? I would suggest you look for ways to earn supplemental income as well. There are many ways to do so, including from home, for those with kids.
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