I love the car, but the car can't love me back.
June 13, 2007 4:00 PM Subscribe
Should I sell my car? Am I doing the math right?
posted by anonymous to work & money (21 answers total) 1 user marked this as a favorite
Ok, here's the deal. I'm in grad school, have approximately $5500 of credit card debt and a car that I owe about $4000 on. The car is a 2001 Toyota Prius in good condition, which the Blue Book says I could still sell for about $11,000. So if I sell it for that price, I'll be able to pay off the lien and have enough money left over to get rid of my credit card debt with about $1500 left over.
I live in a town where, although I can mostly bike and walk, life would be much easier if I had a car that could at least get me to the grocery store. So the $1500 would go towards a cheap older car for local driving. (It's a college town, so there's always someone selling one as they move away.)
This would allow me to save the $300/month that would have been going to my car/credit card payments and at the end of the year I should be up by $3600, instead of still owing about $6000. Did I do the math right? Am I missing anything that makes it a better idea to hold onto the car and pay off the credit card debt in a year when I'm out of school and have a job? I can continue to make the car payment/credit card minimum each month without straining my current budget, but it would be nice to have that money earning interest in a savings account. There's no danger of me letting the credit card debt build up again. The only downside I've been able to see so far is that when I find a job I'll want to get a car more reliable than the beater, so that would involve taking on some small amount of debt again to get a more reliable used car. On the plus side, though, I would have the money I've saved to use as a down payment, so the additional debt should be quite minor. Am I missing anything?