mtaalib3

I was looking at the Manheim online auctions and was amazed at how much cars depreciate within their first 3 years. If you must get rid of your LS, definetly dont buy a new car. As stated previously, you will be in a much bigger hole. Unless you're going to finance for 3 or less years, your car, no matter which make and model, will depreciate much faster than your loan balance gets paid down. Then you will be stuck with that car because you will be seriously upside down.
May I suggest getting a personal line of credit to cover the difference between what you will get through a private party sale and what you owe. Only down side is that you will have monthly payments on a credit line and no car. If you must have a car then arrange for financing through your local bank and then search for a local wholesaler who can buy you a car at a local dealer auction. Since the cars are being sold at wholesale you may be able to refinance the original loan from your bank and pull out some of the car's equity to help pay off that credit line. All this depends on how good your credit is and what the maximum ltv (loan to value) your bank is willing to lend. Fyi, some banks are willing to lend up to 125% of the book value of the car. Unfortunately, if you borrow 125% you will probably end up where you are right now. But then at least you will have a newer car. Just my 2 cents....

I6turbo

iTrader: (1)

You're sending mixed signals here -- first you say you need to get out of the high payment, then in the message above you indicate that you'd be okay if you somehow felt better about the '01. If you are able to keep the LS you should just stop obsessing about the '01 vs. '04. There's BARELY any difference between the two except among obsessing car freaks like on this board. 99% of the population doesn't even realize there are two different versions. The '01 LS is probably more reliable than anything you'll buy to replace it with, and FORGET about buying a new car -- that's the dumbest thing you could possibly do if you're short on funds. You didn't give enough info to know what is the best move for you, but if you can keep the LS then you probably should do so and consider it a lesson for the future. And don't waste money modifying it -- just pay on it and spend the rest on your familiy and more practical obligations. Good luck!

Kansas

Kevin,

Keep the car, tough it out and pay it off early as soon as possible. Actually, pay off every debt as soon as you can. The next few years look like a very bad time to be in debt -- in my nearly 60 years, I've never seen so many people out of work and/or over their heads in debt.

If you and your wife are not doing it now, start keeping track of every cent you make and every cent you spend. You can use an electronic spreadsheet, a program like Quicken or an old style paper ledger book to categorize and track expenses. It may sound odd, but when you realize where all the money goes, spending automatically goes down.

Cut out things that you don't have to have - cable TV, cell phones, liquor, clothing purchases, and especially dining out. Dining out is a huge drain on household finances for most people. If you buy your lunch, "brown bag" it instead. If you like to eat steak, eat chicken (or beans!) instead.

Car loans, mortgages, credit cards, and other loans can be paid off early if you can free up money to do it. The main thing is to pay off loans with the highest interest rates first. I haven't had a car loan in a long time but the last one I did have I paid off two years early by paying extra each month and making sure the bank applied the extra payment to the principle.

Don't be too proud to seek professional help. Debt counceling is available but don't fall for the services that are just ripoff debt consolidation companies.

I can guarantee that what I am recommending works. I've been there and I've helped friends get completely out of debt by explaining how we did it. You don't have to be rich or earn a lot of money to be debt free.