Hi there…and help! My question is very pressing to me and has been weighting heavily on my mind! I appreciate being able to post here, so thanks in advance!I have a 2006 Hyndai Elantra that runs great with about 53,000 miles on it. I bought it in 2008 and owe 3500 on it. My car payments are $252 mo. The bluebook value is about $6500. My question is: As nice as it is to look forward to paying it off and not having car payments for a while, is this the car I want to do it with? I have asked friends what they think, but generally everyone is saying it is a personal choice. True, but by the time I pay my car off, even if from time to time I put more down monthly, the car will be wortth less at that time. So, is my Hyundai Elantra a good value choice for a car to be paid off on? Or, being that it is the end of the year and there are some great deals out there, should I trade it in? What do you think, car talk community? Thanks a mil!
I’d pay it off, more rapidly if you reasonably can, then keep it long enough to save up a sizeable down payment (20% at least) for its replacement. And the loan for the replacement should be a 36 month loan, not the long loan you have now. That way you’ll have a new car you pay off in 3 years, but keep for much longer, thereby minimizing your money spent on interest and giving you years of payment-free time with your car.
There’s no free lunch. If you trade it in, your debt owed doesn’t magically evaporate. You’ll pay for it one way or the other.
If this car runs well and looks good, run it until the wheels fall off.
The truth is If you trade it in you will likely get less on the trade then what you owe on it.
If you have the funds to buy a new car at this time, the wiser choice would be to pay off the Elantra, and save all the intrust your paying on it now. Then enjoy a car with no payments for the next several year.
Early Elantra’s were built cheap and didn’t hold up well as they aged. By '06 the build quality and engineering had improved dramatically and your Elantra should be a pretty good bet to hold up well beyond the day you pay it off. You will use some more money for more frequent repairs as you will be driving an older car with more miles. But repair bills shouldn’t be too bad until the car gets beyond 10 years old.
I’d pay if off and plan to drive it another 5 years beyond payoff. Save the $$$ you spend on the monthly payment in a bank account and build up a good down payment on your next car.
If you simply can’t see driving the car for that many more years, now is a good time to look for a new car. Financially, it is better to keep it and drive it. Emotionally, all those sexy car ads showing you all the pretty girls you’ll attract with a fancy new car are hard to resist. Frankly, most girls like a guy who has money in the bank and is responsible. They don’t care that much about the car he drives. This is a secret the Madison Ave. ad agencies don’t want to let out.
I’d Increase My Budget For Car Expenses And Pay This Car Off Faster Than Scheduled. When It’s Paid Off Then Continue To Save At That Same Rate Or More. Drive That Car Until You Can Afford To Pay Cash For A New One.
This Is Your Opportunity To End That Backwards Cycle Where You “Buy” Something And Then Pay For It. . . . . . Just Pay For It To Begin With.
Back when the earth was still cooling and dinosaurs were free-ranging, I made payments on my first new car when I was 18 and paid it off in 8 months. I continued driving and saving and then buying and have never had a car payment since. Get out from under those payments. It feels good and puts you in control.
CSA
Look around at all those buildings housing banks etc. If everyone saved some more each year, we all would be out of debt and you would not need to make monthly payments. It would be money in your pocket.
I have owned cars since 1965. I have never had a car loan. The only loans I have had were home loans.
It was not easy when my friends in school had nice new cars, but I have never made a car payment. The only loan I have had was on my home, which I paid off about 15 years ago. I did not make a lot of money, but now I own my car, my home and everything else, Believe me it is a really good feeling to know it is yours, not the guy who ones the bank.
Now I have an easy life.
I am no better than you, or anyone else here. I just chose to make the best use of what money I had. I encourage you to teach your children (as I have mine) and hope they learn the way to the good life.Are you going to buy a brand new car or another used one and do you have something in mind already?
A Well Taken Care Of Car With 53,000 Miles On It Is Just Getting Broken-In. Sell/Trade It Now And You Are Just Somebody Who Buys Cars And Then Turns Them Into Good Used Car Deals For The Next Guy.
The best car for somebody who must make payments on a $3500 loan is a good used car with about 53,000 miles on it that could be purchased for about $6500.
I buy cars almost new (less than 10,000 miles) or used (over 100,000 miles sometimes) and run them to 250,000 - 300,000 miles. Some get handed down from parents to children.
Unless there’s some kind of fault with this car (missing information ?), “Dance with the one who brought you.”
CSA
Frankly, most girls like a guy who has money in the bank and is responsible. They don’t care that much about the car he drives. This is a secret the Madison Ave. ad agencies don’t want to let out.
Guys drive expensive cars to impress women not because of some advertising conspiracy, but b/c it’s logical from a woman’s point of view.
A LOT of women can’t stand “cheap” men who like to save. They want a big spender who likes to have a good time. Driving a cheap car is one way to figure out which men like to save a little too much.
A woman can discern 2 things by seeing a guy in a $50k luxury car. 1) That he probably has some money/decent career/business and 2) that he isn’t cheap. These are both 2 very big positives in a man.
By seeing a guy in a Camry, all she knows is that he’s definitely cheap and could be poor. She can’t assume he has money saved, b/c he might drive the Camry b/c he’s just broke. Most people would drive a $250,000 Lotus if they could afford it.
“Most people would drive a $250,000 Lotus if they could afford it.”
It’s not just the affordability factor,
Did you ever try getting into the driver’s seat of a Lotus, and then, trying to get out of it?
Trust me–I have tried these maneuvers at my local Lotus dealership, and it was…not pretty.
I dare to say that for anyone over the age of 40 or so, getting into or out of a Lotus is…extremely difficult.
If Harry Houdini was alive today, his feature act might include getting into and out of a Lotus.
Keep it. If you sell it yourself, you will lose a few hundred dollars. If you trade it in, you will still owe at least $1300. If you can pay more on the loan, do that and pay it off early. Consider it a lesson in will power.
If you like the car and are happy with it consider it break even if you spend as much in repairs as a car payment, chances are you won’t.
“Most people would drive a $250,000 Lotus if they could afford it.”
Not hardly. Many folks are happy not to spend all they can afford on cars, or houses, or whatever. You might like to read ‘The Millionaire Next Door’. Most folks with money have it because they DON’T throw it around needlessly.
"Most people would drive a $250,000 Lotus if they could afford it."
I wouldn’t and here is why: I like a common car that I can take to my independent shop which is convenient or to a nearby dealer. I live in a community of 60,000 but we have no Mercedes Benz dealer, no BMW dealer, and no Volvo dealer. I had colleagues that have to drive 60 miles to have these vehicles serviced. I had more pressing things to do than take 4 hours to take a car to be serviced. I never want to be in the position that I am a slave to my possessions.
For the OP, you have a serviceable automobile. Pay it off and own the Elantra free and clear. You won’t be a slave to car payments.
Hi, I would say keep it if it has not been a maintenance sponge. I mean if you are not constantly dumping money into it to keep it running and the body is still rust free and inspectable. Keep it clean, pay it off and drive it until the doors fall off. If your idea is to attract the girls get a nice suit and keep your shoes shined. Once you get to your destination and park your car and go inside no one can tell what you drive. Plus you won’t be a debt slave to the banks.
Keep driving it and pay it off as soon as you can. I would drive it until 1) it becomes unreliable on a daily basis, 2) it becomes unsightyly because of rust (usually not worth fixing) 3) it becomes unsafe structurally or 4) the repairs to keep it going start appraoching new car payments.
If the car is used for business, it’s another matter altogether. If you sell real estate you want a car with good appearance that’s also reliable.
With your Elantra the above conditions will appear at about 250,000 miles, so you have a long way to go yet.
U have had loan for 5yrs? R u close to paying it off?
I’m going to swim against the tide here. All the answers here are good if you are strictly looking for a financial advantage. But the deal with cars is that not all people buy cars to not have a payment, pay it off as soon as possible, or drive it until the wheels fall off. People sometimes buy cars, because, well, they like the car! The 2008 Elantra is a dull car, but Hyundai got all the kinks worked out and it’s a great used car. Frankly, I think it’s worth more than what you think. I bought a new 2011 Elantra and the dealer said that used 2009 and 2010 Elantras were selling at CarMax for more than what they sold new. I checked it out and they were right! When Hyundai changed their styling, everyone started looking at the older models and realized they were solid, reliable, low-maintenance, high MPG, yet dull cars. So the used car market prices moved higher on them dramatically. I sell my own cars and ran into a similar situation with a 2004 Mazda3 in 2008. I liked the car OK, but the AC wasn’t good, and they couldn’t fix it (another story), and I lived in Houston with super hot weather. However, gas prices jumped that summer and the market value of my Mazda3 jumped dramatically. It was time for another set of tires, 60,000 mile service, etc… Instead, I sold it myself, made about $5,000 and paid off credit cards. I kept enough to roll over on a 2009 Mazda3 (which turned out to be a huge lemon, yet another story), and took bids from all dealerships within 300 miles and bought it from the lowest bidder. Got an interest rate of 2.3%, which was much less than the credit cards of course, and was off.
So it does depend on what you want. You do have a car that may have jumped in value a great deal, so you could take advantage of the market and sell it yourself (not worth trading it in, you’ll get hosed) and roll it over to something you have your eye on. Do you qualify for a low rate (3% or less)? Is there another car that you really want? Cars around 60K are in the sweet spot to sell to get your best price and for people to buy them. Or you can drive it til the wheels fall off.
The problem with all these answers is that cars are meant to be enjoyed, at least in my point of view. Sure, all these comments make financial sense, but they are ALL strictly about how financially it’s better to hold the car until it falls apart. Not one person asked you if you disliked the car or if you really wanted another car. You can have the view that a car is strictly a commodity that should be used to gain the lowest possible cost. Most of these replies reflect that attitude. Or you can have the attitude that a car is meant to be enjoyed and be exciting, which is why cars are an American institution. I fall towards #2, but it has to make financial sense also.
I like cars. I like cars I want to drive. I sell them myself. I buy them from personal sellers if at all possible to get the best price or buy them at low mileage when the depreciation is the highest and the price is the best at a dealer. BUT, I buy the car that I want to drive! That’s the difference between my reply and all the other replies. So it’s up to you. Do you view the car as a commodity or as an expression of yourself, within financial reason? Can you demand the best price for your used car when you sell it yourself? Are you able to discern, through research, what the best deal is on another car? Can you roll some cash over for a downpayment? Is your credit good enough to get a low-interest loan? If so, then buy what you want. Life’s short. Enjoy it.
I Buy And Drive Cars I Like, Too, But I Pay Cash. It’s Not An Either/Or Situation.
However, One Has To Temporarily Push Beyond Instant Gratification, And Work Into A Situation That Will End Car Payments, Forever. Patience Is A Virtue. “Life’s short. Enjoy it.” Do It Sensibly.
CSA