Help! Please tell me what to do…
I’m a poor social worker, trying to figure out how to cut back expenses, and it seemed at one point that my car could be the ticket, but I might have missed the boat. Or car. Whatever.
Here’s the situation: I have a 2005 Honda Civic Hybrid with about 30,000 miles on it. When I bought it, new, I had just returned from living for a year on a low-paying nonprofit job in Guatemala, and I thought I’d be rolling in dinero and be able to handle the car payments no problema. I did some research, and feeling green, I thought I’d buy a hybrid, and since there weren’t any used hybrids on the market at the time, I bought new. But I soon found out that life is not greener on this side of the Rio Grande. I’m broke. I live paycheck-to-paycheck, and often bounce checks by the end of the month. It sucks. About a year ago, it occurred to me that I’d have an extra $309 a month if I could sell my car, pay off my loan, and buy a cheaper used car, which I should have bought in the first place. I think I only need something simple but reliable - I drive about 9,000 miles a year. I have about an 8-mile commute, and also drive around to my sporting events (hockey - field and ice) and up to visit Ma and Pa in Wisconsin once in a while.
I’ve visited the Honda dealership several times, and they always say they’re interested in buying my car, but I always feel like they’re pulling one over on me. I posted an ad on Craigslist once at the peak of high gas prices, to see if people were interested in my hybrid, and got several bites but didn’t follow up, mostly because of lack of time, and lack of confidence in my ability to negotiate a good deal. Now gas prices are back down, the economy is in the craphole, so I think I may have missed a good window to do the deal and sell my car and buy a new one. What do you think? It’s in good condition, I’ve kept it maintained at the dealer, but it has been in a few accidents when stupid people hit me. 2 were repaired fully, one left a dent that still blemishes the passenger door.
What do you think? I need to decide soon, I am due for a $500 30,000 mile tune-up and I have $40.03 in my bank account! Do I sell and buy? And if so, what kind of crappy car should I buy that’s not going to kill me down the road with repair costs? (One thing I fear is future repair costs of my hybrid…every oil change is already $20 more than a regular Civic because it needs a “special” oil.)
Thanks so much, Allie 
That’s a tough situation. Ordinarily I’d say definitely sell it and buy a beater-- from a strictly numbers perspective that’d be the financially prudent thing to do given your situation. But if you’ve been making $309 payments since 2005 you must have a pretty good chunk of it paid off and if you go and sell it now you’re going to lose a lot of money on the deal and end up with some junker instead of this car, which is obviously the car you want for the long term. By the way, the hybrids by and large have proven themselves to be if anything more reliable than conventional cars and since this dip in gas prices is sure to be temporary, I wouldn’t worry about this car’s long-term operating costs. It is probably the kind of car you’re going to want in the next 5-10 years.
If it were me, I’d only sell it if you really have absolutely no prospects of your financial situation improving in the next year or two. You might just list it for sale with a high-ish “FIRM” price and let the market decide whether you keep it or sell it. I think whether you can get a good price for it during our current gas price respite really depends on where you live, because even though gas hysteria has waned for the moment, environmental hysteria remains in many parts and the degree to which used hybrid prices have dipped in different places varies.
Incidentally, here’s a cash saving tip right now. The hybrid components on your car are practically maintenance-free and the gasoline engine and the rest of the car components are nothing special, so there is NO reason you still need to be taking it to the dealer for maintenance. Find yourself a good independent mechanic and let them do the work for far less!
At this point, I’d try to stick it out if at all possible. If you can manage to finish up the loan, you’ll have a car with high quality, a pretty low cost of ownership, and a known maintenance history, which should put you in good shape for a number of years and let you catch up financially. If you sell, you’re likely to end up in a beater that won’t be reliable and that will need to be replaced sooner.
One option is to learn to do some of the maintenance yourself, especially if you have a mechanical-minded friend that can give you a hand. You could change the oil, change the air filter, rotate the tires (using the spare), and maybe change some other fluids yourself. There may be a Honda Civic message board on the Internet where people have discussed some of these procedures.
Try to stay away from the quick-change oil places. Too many horror stories are told here about the work they do.
Assuming you can sell for more than the outstanding balance on your loan, I would suggest doing so. It may be a while before you and the country get back to good economic times and now is not IMHO a good time to be in debt if you can afford it. It seems you are an intelligent person and are going to make a wise decision. Maybe one of your friends here can help you do the selling to give you a little more confidence there.
If you bought the car in 2005 hopefully you have a 5 year loan. In that case you only have 2 years left on it which translates to ~$7500. Buying a cheaper used car that is decent will cost $3000-$5000. And it will require repairs/maintenance usually I would budget at least $100/month for that.
It sounds like you cannot afford to pay cash for a car so a loan means a pretty high interest rate especially compared to your current one likely. So your payments go up on interest alone as they only allow for short term loans on older used cars for good reason. Add your $100+/month repair/maintain fund you are not much better off.
If I were you forgo the $500 tuneup and save up for it. Maybe price it at an independent shop. Many times dealers translate check into replace. Keep up with the proper oil changes though and transmission fluid changes(if needed). Never skimp there as results are catastrophic.
I don’t recommend this but will say my wife had a 96 Civic. Besides oil changes at wherever and air filter herself the only scheduled maintenance performed was at 100k at her father’s shop including timing belt and full items like plugs, wires, belts and fluids. She drove it to 190k doing a few minor repairs on the way but nothing else. Purchased for $13k and sold for $3200 at 7years/190k in need of full services and timing belt. Not bad.
A big deciding factor is how much do you still owe?
Following up is 70% of the job. Follow up, finish a task and you will be free to start the next journey. You will run out of back burners if you don’t.
How much could you get for it on Craigslist, or what does KBB or Edmunds say. If you are bouncing checks, I would say sell it. Pay off the remainder of the loan and buy a cheaper car. There are older Toyotas and Hondas out there that have great reliability.
What do you mean by tuneup at 30K miles? Is this specified in the owner’s manual or does the dealer say that your vehicle needs it? Tuneups before 100k miles are history for the late model cars that we own and even then a spark plug and plug wire change can do the job. Go by the owner’s manual.
Yes your dealer is interested in buying your car so have they made you an attractive offer? They are stringing you along; good politicians.
Can’t help with ideas for your payment problem. I think that you described the situation and there is no easy way to change it other than possibly a financial beating if you sell if you are upside down with your payments.
Borrow money from Ma and Pa?