Ask Lemmy

This is exactly why an automobile should be treated as a depreciating asset, rather than an investment.

You fix a car if it will cost less than half of its value at the time of the repair. If it cost more than half, get rid of it at the first opportunity. There are caveats to that rule of course. So don't fault yourself for buying another car.

You had some bad luck and that is just a part of owning a car. In commiseration, I invested $2500 into an Acura TL that I dearly loved for timing belt and some other 100K maintenance items. Only to have its transmission blow up less than 4 months later. The $2500, plus the transmission replacement would have been well over half the value of the car. I traded it. For a car that I still own and absolutely loathe, but it's been reliable and I've put over 160,000 miles on it. My oldest kid now drives it.

The short answer is:

Keep your current car. It's basically new. From a manufacturer that is notable for the reliability of its products. You also know its maintenance history, which is incredibly important.

Have your payments kept ahead of depreciation? Meaning, can you sell your car for enough to pay off your loan? Just so you know, that's almost always "no", but your results may vary. You would also be forced to buy another car. 7.59% APR sucks, but are you able to get a better rate now on another car? Do you have the down payment for another car? Again, you may not have any money left over from selling your current car and paying off the lien.

If you can refinance it at a lower the rate, then absolutely that is the path you should take. If not, then taking a more global look at your finances are in order to make the payment more palatable.

You haven’t mentioned why you want to sell. I’m assuming you still need a car.

You bought a nearly new car. It’s expected to be reliable, not a luxury model, and have low maintenance costs.

You should prioritize paying off the loan faster if possible.

Are you happy with the car? How are current car interest rates? Some banks/credit unions here offer a discounted refi rate to new customers. Could you do something like that?

They didn't stop producing Fits, they just stopped importing them to the US because Americans are absolutely stupid and when gas prices dropped during COVID the goldfish memory having public bought lots of trucks and SUVs. I hate this shit hole.

One of your implied questions is, "Can I get a reliable vehicle from around 2015 and spend less than $414 monthly, combined, on loan interest and repairs?"

To which I say, "probably". I've bought cars that meet those requirements, for my definition of "reliable". But your needs may vary.

I will say, financing a car is among the top unnecessary "stupid taxes" that I have paid, in hindsight.

Now that I don't have car payments, I've found that ~$414 per month chucked into a savings account can buy a surprisingly decent car surprisingly quickly.

And having no car payment feels like I imagine having a rich uncle must feel like.

Your payments are not terrible for today's car market, and you have a practical, late model car. It doesn't seem like you will come out ahead on getting a different car because of the transaction costs associated (registration, etc).

If you don't drive it, it will depreciate slower and when and if it no longer meets your needs you will get more for it. You could probably get an older model for cheaper, but it will inevitably need work and you roll the dice with being stuck with an expensive repair.

You could also lease an electric car with the stupid low lease prices they are offering, but then you are still on the hook for expensive insurance and are in a worse position in three years.

Dump any extra you have into extra payments on the car for an easy 7% ROI, and use it to get groceries once a week.

Start shopping for subcompacts sold by rental companies like Hertz. They have strict maintenance schedules. As long as you can trust yourself to inspect a car for abuse you should be able to get a good deal and lower your payment by quite a bit. That would give you headroom to save for repairs. They sell used Honda Fits. It would also lower your gas costs.

Probably better to just keep it. Probably.

Interest rates haven't changed much since 2021 (they may even be higher?). Unless your credit score has massively improved to potentially secure a lower rate on a new finance, it's probably not going to be any better than the 7.59 you have now.

Do you think you could sell your HRV for $16,000 in a private sale? Even at that, you'd be breaking even with the payoff, and the replacement would be 100% out of pocket (or a new finance at whatever current rates are).

Do you have your eye on something already as a replacement? If so, how much would it cost? Do you think you could tack that amount (or part of it) on to the $16K sale price of your HRV to help pay for it?

Ultimately, those are only things you can answer. I'm more of a play it safe /devil you know person, so I would probably just stick with it but pay extra on principal to help pay it down quicker and reduce interest on the loan.

MoneyGuy has a great rule, 20/3/8. 20% down for no more than a 3 year loan term (36 months), with monthly payment being no more than 8% monthly gross. You could try to refinance with these in mind and see if you qualify, $16k left isn’t a terrible position, but it depends on what the value of the vehicle currently is. If you’re under water on it, you might have a difficult time refinancing in a worthwhile way.

Step 1. Sell dumb car for ~15k(?)

Step 2. Buy one of the best cargo bikes on the planet for 6k (get disc brakes)

Step 3. ???

Step 4. Profit