Selling my baby

[ChiTownG]

I came to the relization that having a $450 car payment every month is too much when I am buying a townhouse. So I have decided to sell my G35 coupe. I was looking at the acura rsx type s and lexus is300 (around a 2002). Any suggestions or opinions on others I should look at or any experience with either of these vehicles? Thanks for the help guys.

[EZZ]

Are you really saving that much when you sell your G. Lets say you can unload the car for $26k. You can get an RSX for $21k new and around $20k for a used IS300. You then pay tax (around $2k) for the car and also the tags. It seems you only net $3-5k and you have to get an inferior car. Can't you just refinance?

[MikeyMike]

^Exactly^

If you're going to buy a 5-10k beater that's one thing, or lease a honda civic for $199 a month, that's another.

But if you're going to unload your G for $26k, and then buy a $20k car it doesnt make sense....you're going to a car with less performance, and you're losing a car that has more performance, better looks, lower miles, and still under warranty.

[ChiTownG]

My car is an 05 with only 6,000 miles and I will only get 26k? KBB says trade in is 31k and I put down 13k so I will net around 12k right now. I dont want to sell it but I can get a nice used car with low miles and have no car payment that would be optimal. (I plan on putting some extra $ besides the 12k for the used car). Any suggestions or am I dreaming that I can get 31k for my car

[MikeyMike]

I think you're dreaming, but don't take my word for it. If you plan to trade in, get some quotes. Or if you plan to sell Private party browse through the recycler/autotrader to get an idea of what comparable used G's are going for in your area.

[kenchan]

yeh, what you need to do is to assume my 04 civic lease for 165/month
for the next 17months so i can make room for another car.

[G35MC]

yes 31k is possible, but u probably lose $7k right on the spot when you do this type of switch...

you do end up saving 10k, but worse car with higher mileage.

good luck with your decision.

[kenchan]

when saving up to buy a house, save like you mean it. not some half-assed
job thinking you're saving a few thousand here and there. a few thousand
means nothing when buying a house. you have to save in tens of thousands.

or get screwed on a 30yr loan.... go by the total amount you will pay,
not your monthly payment. try to get a 15yr loan.

[elau]

Originally Posted by kenchan

when saving up to buy a house, save like you mean it. not some half-assed
job thinking you're saving a few thousand here and there. a few thousand
means nothing when buying a house. you have to save in tens of thousands.

or get screwed on a 30yr loan.... go by the total amount you will pay,
not your monthly payment. try to get a 15yr loan.

I can tell you are from the Midwest. Ask anybody from CA and the NE to see what a 15-year-loan house payment would be, and what kind of down payment you will need.

That really is a bad suggestion. You are still be better off having a 30-year-loan house than paying rent. Part of your interest is tax deductible. Kenchan, do you even own a house or you are still living with your parents?

Thousands here and there do help for the down payment. Most important thing is to make sure you have a good credit rating. It makes the difference between getting a higher or lower rate. Obliviously the lower debt ration is also important. Car payment will often overlooked because it is a necessity, and it is a short term recoverable loan. Whereas credit card debts are not. What you do for a living does not matter to the bank, money is green whatever your profession is.

[TRIG]

Focus on the bigger part of the equation here--the townhouse. If you are looking to save money selling your car is probably not the best way of doing it. Every time you sell and buy a car you loose lots of money. Think about taxes and profit dealers make on the transaction. I was faced with this problem about 4 months ago when I was buying a Condo. Instead of thinking of selling my car I focused on getting the best mortgage rates with lowest fees. Because of this mentality I researched 1st time homebuyer loans, and all kinds of ways to lower my mortgage payments. In the end I found out I qualified for various loan programs that the city was offering and that lowered my monthly mortgage by $700 per month! With all the money i saved I actually upgraded from my E46 bmw to a fully loaded 06 6mt coupe.

[jeremyp111]

Originally Posted by kenchan

when saving up to buy a house, save like you mean it. not some half-assed
job thinking you're saving a few thousand here and there. a few thousand
means nothing when buying a house. you have to save in tens of thousands.

Agree 100%. If you are planning to buy a home, then save, save and save. Then save some more. Get used to paying the mortgage payment, but put it in your savings account for your downpayment. This will get you accustomed to making the payments. You will get used to it and you will make the transition from renter to owner an easy one. Good luck.

or get screwed on a 30yr loan.... go by the total amount you will pay,
not your monthly payment. try to get a 15yr loan.

This is the kind of ridiculous thinking that gets people in cash poor situations. Any good financial advisor will tell you this is the most horrendous financial mistake anyone can make. The difference in interest between a 30yr and 15 yr mortage is less than 1%. Usually around .5% to .75%. A 165,000 mortgage will cost $1265/month on a 15yr loan @ 6% and $960/month on a 30yr loan @ 6.625%. If you invest the $305 monthly difference in mutual funds then you will have the 'OPTION' of paying it off in 15 yrs by writing a check from the investment account and STILL be left with plenty of cash left over. OR you could keep paying the minimum payments, leave the investment to grow and maintain the tax advantage. Don't make this mistake!!!!!

[ChiTownG]

Thanks for the help guys I think I am going to keep the car. Its too damn sexy anyway! Does it make any sense to put a couple extra grand for my next car payment then have it refinanced. I have a 6 year loan at 9% and have paid off about a year. Is this a wise option or should I just let everything stay as is.

[EZZ]

Originally Posted by ChiTownG

Thanks for the help guys I think I am going to keep the car. Its too damn sexy anyway! Does it make any sense to put a couple extra grand for my next car payment then have it refinanced. I have a 6 year loan at 9% and have paid off about a year. Is this a wise option or should I just let everything stay as is.

9% is awfully high. I would try to refinance as soon as you can. Rates are getting higher and 6 years is pretty long for a car loan. Have you thought of selling your car and buying a cheap (less than $10k) alternative until you get your houss and get more financially stable?

[05Scoobyroo]

You should keep everything as-is, then once the you gain some equity in your townhouse, get a home equity and pay the car off. You will save a lot more money per month, then with the 450 you were paying each month for the car, probably a quarter of that, or less will go to your home equity, then the rest can be applied as direct principle on your mortgage. For $hits and giggles, go to http://www.bankrate.com/brm/mortgage-calculator.asp. They have an ammortization breakdown (can show what your balance would be with extra principle payments) Good Luck. I'm in the same situation!

[maaloxx]

A 165,000 mortgage will cost $1265/month on a 15yr loan @ 6% and $960/month on a 30yr loan @ 6.625%. If you invest the $305 monthly difference in mutual funds then you will have the 'OPTION' of paying it off in 15 yrs by writing a check from the investment account and STILL be left with plenty of cash left over. OR you could keep paying the minimum payments, leave the investment to grow and maintain the tax advantage. Don't make this mistake!!!!!

This is an excellent idea. The fidelity freedom fund is averaging 11%/yr.