I owe approximately $6500 on my 2001 Jeep Cherokee … and on top of that, it costs me a fortune in repairs, to the tune of $3-4k per year since I got it in 2008. At this point, I figure I could sell it for about $4k, which would mean a $2500 loss (not counting all the $$ sunk into repairs … UGH). I’m thinking that just for my own peace of mind, I’d rather take on a bigger car payment for a more reliable car. But I’d love to have some advice.
First you need to view the repairs(likely maintenance on 9 year vehicle) not as investment but upkeep money.
That being said $3-$4k is really steep/year.
I don’t think you have the stomach for this vehicle and the $2500 will be blessing. Just be careful on how much you finance on your next ride so you don’t stay upside down like this.
while an itemized list of the things that have been done to it would be helpful, I’d argue(with most other posters I imagine) that peace of mind is worth a little bit of extra cash. Start looking around and see what you might like to get into, then consider your options
As one of the other posters commented, $3-4k/year is a bit steep (at least for the midwest). My 01 Grand Am cost me $2k in year 6 (leaky lower manifold gasket) and $4k year 9 (rebuilt transmission and electronic breaking control module). All other years were regular stuff (tires, oil, brake pads, etc…) at maybe $1k with me doing most of the work.
From a purely financial picture, that same $3-4k/year could cover the payments of a brand new no frills ride (Honda Fit, Kia Rio, Chevy Aveo, etc…), and the money saved on gas might even cover the added insurance.
On the other hand, if you LOVE the car and you have a means of transportation when it is in the shop and can manage the unexpected monthly expenses (carrying a balance on the Visa doesn’t count) then keep it, love it, and understand that 10 year old cars come with suprises.
Sell it. Jeeps are like boats. You are either willing to do the work and can afford it or you aren’t and you can’t. It takes a lot of love that few people outside of their teen years and twenties can offer.
If you love it keep it- If you hate it dump it. All vehicles depreciate and are money pits to one degree or another. If somebody could guarantee you a problem free vehicle for 10k that would run great for 5 to 10 years— Everybody would go get one. Problem is nobody can give that kind of guarantee. I got lucky and bought a used Saturn about 8 years ago and haven’t had any major problems yet- Then my wife buys a used Honda and it’s been a money pit pretty much from day one- you can’t win for losing!
See what this one brings…
I am having trouble understanding how you could own so much money on a car that is that old. Unless you have a very high interest loan and have maxed out the payments. You may want to see how much more money you will pay out in interest if you continue the loan until the end. Then again, you may not want to know.
If you can make a deal on another newer car with a reasonable interest rate, along with trading in your current vehicle with the stipulation they pay off your current loan, that may be a good way to go for you. In that case you will most likely have to pay their asking price for the new car but if that gets you a better loan rate and a newer car it may be worth it. With a newer car you should have less repair bills and could maybe use that money to help pay the new car off sooner or save some of it for a repair fund when things do happen.
If you need a AWD vehicle you may want to check out the Subaru line of vehicles. They usually don’t require as much in maintenance costs as a Jeep does. That or just about any Japanese vehicle will cost you less over time.