I have an '04 Honda Accord EX (special edition), 4 cyl., that I bought in '06 for $17,8, down pay of $5,8, purchased Honda Care extended warranty, financed $16, have $9K left to pay. When all is said and done, when I’m finished, I’ll have paid $24K. This is something I want out of, and was thinking to sell the car now while it can get a good price now with everyone wanting 4 cyl. vehicles. I really want something smaller like a Toyota Corolla, and no car payment (which is $380/mo). I feel I goofed big-time, and this was the first car I’ve financed.
Any advice???
Toyota Corollas are very popular and good second hand Corollas may be hard to find. It may be hard to find a good one for the equity you have in the Accord.
You know the car you have and do have a warranty, although it was probably overpriced. The fuel economy should be decent on the Accord. My advice would be to see if you can pay off the loan early without penalty by making larger monthly payments and this will reduce the amount you are spending on interest. Keep up the maintenance on your Accord (particularly the timing belt). Have heart–you have lost much less than someone who financed an expensive SUV, made payments for a year, and then finds the SUV is worth less than the amount owed.
I don’t know much about the size of the Corolla, but our church secretary traded a Honda Accord for a new Honda Civic. The Civic is about the same size as the Accord that she traded in.
You should go to www.kbb.com to check the value of your car. Look at the private sale value and the trade-in value. If you owe more than it is worth, keep it. I doubt you owe more than it is worth though. If it is worth more than you owe, put a “for sale” sign in the window and maybe an ad in the paper. If you are lucky enough to sell it for a good price, you can pay off the loan and you will have the downpayment for your next car. Is your extended warranty transferrable? That would add value of it does. If it doesn’t, selling the car would mean it was a waste of your money.
One more thing. If you going to buy one of the most reliable cars on the market, why buy an extended warranty? This applies to both the Accord and a Corolla.
kbb.com seems to be having problems with it’s website. edmunds.com lists 14k for the V6 Accord Ex sedan. So if they can get 14k for it, then that’s only 5k from loan payoff. $5k won’t buy much of a Corolla or Civic for no payments. Hell, my 10 year old Civic(1999) still books for over $5k, and honestly, I could put a stick for $7k and might luck out someone would buy it for that.
If you like the Corolla, you’ll love the Prizm. It was Chevy’s version of the Corolla. The last year for th ePrizm is 2002, and they ae around $5000. A 2002 Corolla goes for about $7000.
It sounds like your goof was to spend more than you could afford. The problem is that getting rid of the car now will provide only temporary financial relief. Even if you can get $5k cash after paying off the loan, that will only buy you an older, smaller car in questionable conditon. You don’t want to swap a $380 car payment for $200 a month in repairs on a beater that dies completely in another few years.
Your Accord is a keeper. It is a good car to drive, is fairly easy on gas and is one of the cheapest to maintain. Provided you take proper care of it, it should last you another 20 years or 200k miles. Another couple of years of struggling with a big car payment will earn you decades of freedom from any car payment.
Your best option is to find extra cash to pay off the loan as quickly as possible. Look at your expenses and, until the loan is paid off, cut out all the non-essentials. Tell your friends and family that there will be no gifts for a while. Ditto with church and charities. Think about cancelling your cable TV and internet service. Unless you need it for work or don’t have a land line at home, don’t renew your cell phone contract after it expires. Forget about vacations and evenings out for dinner and a movie. To increase your income, see if you can find a second, part-time job. Life won’t be any fun for a while, but the pain will only be temporary and your reward at the end is financial freedom.
A less desirable option is to refinance the car loan. If it can be done at all, the interest rate may be higher so that your payment may not drop all that much. At best, it will susbtantially increase the total amount of interest you pay over the life of the loans.
One reply suggested using the equity in your Accord as a down payment on another car. Bad idea! You are on a treadmill. You need to get off it, not switch to a different treadmill.
Am I reading your post correctly? You paid an extra $4000 for the extended warranty!?!?
First advice, don’t make the mistake of buying an extended warranty on a Honda ever again. In fact, avoid extended warranties on just about everything. They are never a good deal.
Next, keep the car and pay it off as quickly as you can. Selling and buying something else is even more of a money loser than sticking with the situation you have. You won’t save anywhere near enough in fuel savings between an Accord and Corolla to make this idea pay off. The only real goof you made was buying the extended warranty and you may as well keep the car long enough for that warranty to run out. At least if it breaks (very unlikely) it should not cost you much.
As others have stated, you need to stick with the Honda until you get it paid off. You will not save big $$ on gas by trading, you’re already getting decent mileage with a 4cyl. Accord. Don’t compound your financial problems with another car purchase.
The difference in gas mileage between a 4 cyl Honda and a 4 cyl Corolla is not large. You are bettter off by keeping your present car, utting down on unnecessary driving and paying off your car as soon as you can.
Take some lessons as well on driving for good economy; it will make a big difference.