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Trade in or Pay off?

Hi, I have a 2011 Hyundai Tucson that I love. It runs great, it has 80k miles on it (I know, I travel a lot to see relatives) and I love the bluetooth, cruise etc…but I’ve been thinking about a bigger suv that has a 3rd row. Either a Ford Explorer or Honda Pilot. Used, of course, probably a 2011 or 2012.

My trade in says $12,000 and I owe $8,000 on it. I don’t NEED the bigger car RIGHT NOW, but I do drive my daughter’s gymnastics teammates around and with the big carseat of my 2 year old, it’s a tight squeeze. Plus my boyfriend has 2 kids (in carseats as well) so we can never drive anywhere together with all the kids. Plus traveling 150 miles to see relatives once or twice a month, the car gets packed to the max.

My question is, should I try to trade in now and get the bigger car while my current car is worth more…or should I wait it out a little longer- I still have a few years left of payments until it’s paid off- so should I pay it off and save for a down payment instead and just wait to get the bigger car? My payments now are 387 a month, and I don’t want to go any higher than that. I don’t know if I get a bigger one for between 21-25k if that would be the same payments or not. All the calculators I do are weird and say I’d have a smaller payment but I’m not sure. I’m not even sure I’d get a loan- I only make a small amount a year, and I also get child support (half of which acts as alimony but we decided to put it all as child support so I can’t count that as income).

I just am not sure what would be the better move, financially- trade in now or pay it off in a few years and buy later? Thanks so much for any advice!

My advice will probably be near worthless due to unknowns and not wanting to be one to recommend someone go into further debt.
It does sound like you could use a bigger vehicle. On the flip side you know what you have right now weighed against the unknown of another used vehicle.

I will say this. You’re fixated on the monthly payment (as most people are) and this is what gets a lot of car buyers into trouble.

A survey some years ago showed something like 88 or 89% of car buyers were concerned more about the monthly payment than anything else. Car dealers know this so the smoke and mirrors involved in adhering to that monthly figure often allows them to cover up inflated prices, higher interest rates, and so on.

You seem to be in good shape financially on the vehicle by only owing 8k whereas many people are upside down; meaning they owe 15 grand on a 10 grand car.
If it were me I’d probably keep the car and ride it out. Just my humble opinion and hope it helps.

It isn’t going to get any easier as not being able to travel together is giving up a lot. If you simply couldn’t afford it, you’d have to make do, but it looks like you will be able to afford it without too much strain. If I were you I’d do it. You won’t get a chance to live these years over, so enjoy them now. If you’re serious about your boyfriend and expect to stay with him you should be doing things together as a family.

Some of the best times of my childhood were only possible because we had a big station wagon that would carry all of us. We went on road trips all over the country and on weekend camping trips into the nearby mountains. Great times got the whole family. Your daughter is a little young for those activities now, but won’t be in a few more years. By then a larger vehicle will be essential, but even now being unable to travel together probably means you don’t go places you would go if you could all go together.

Did you did the 12k trade number off a dealer or website like Edmunds or Kelly? I’ve yet to see a dealer come close to trade value from a website. If you have to trade up consider a minivan instead of an larger SUV. If you can get past the image, the van will have more space, better mpg, and probably cost less to insure. Financially, it makes sense to stick with the present vehicle though.

Ed B.

Financially, you are likely best keeping the current SUV until it is paid off. In terms of moving people you may need to get something bigger. I won’t worry about the gym kids, they can handle a tight space. The trips to visit family is the priority, just how uncomfortable is it now? What kind of car does the boyfriend have, and what can he contribute to this? Why to you need an SUV?

The best vehicles for carrying a lot of people and cargo is a mini van. They are generally cheaper than an SUV to buy, maintain, and use less gas. Unless you frequently use the AWD or 4WD capability of an SUV a mini van is the best option. With 4 winter tires a mini van can handle just about any kind snow/ice you would encounter on a family trip.

My brother is going through your same experience right now. He needs a bigger vehicle but has years to pay on his current car. Fortunately for him he has a way out. Our family has several GM retirees that can give him a discount code for as much as 15%. The only drawback is that he has to buy a new GM product. Check and see if you have any GM, Ford or Dodge retirees in your family that can get you a discount. It worth a shot but you will have to buy a GM, Ford or Dodge product. The smart money though says to keep your vehicle at the moment and wait until is more financially viable to trade. BTW…that $12K trade in seems a little high. There are several factors that must be in play for you to get that kind of trade in value out of a 4 year old Tuscon.

Thanks so much guys! It was KBB for the trade in so it could definitely be different. And I completely understand about the monthly payment thing. When we bought this one we made sure to not mention that. And the boyfriend has a car so he could technically get the suv as well. We’ve talked about it a little, but not a whole lot. But that gives me some perspective on it all!

Keep your current vehicle at least until you’ve paid it off. Then start saving for a new one.

Aging an existing payment will make your new loan a higher risk. You need to roll the $8000 loan in with whatever you finance for the new loan. Let’s say you need a 10,000 loan for the new car. This means you are financing $18,000 on a $12,000 car, and you will have to pay a higher interest rate to cover the increased risk to the financier. I would keep the Kia and pay it off, or at least revisit the issue in a few years.

@jtsanders: She’s not upside down on the loan. IF the figures she gave us are right, she stands to pay off her loan, with money left over to put towards the down payment.

@writergirl824 - you’ll be money ahead keeping the Hyundai, I’d only trade if it couldn’t meet my needs. I’d deal with the inconvenience to keep my costs down.

@meanjoe75fan‌, I guess I explained it incorrectly. If she needs more than the gap between the trade in on the old car and the purchase price of the new one, she is still upside down in effect because she owes more than the cost of the newer one.

'11 tuscons go for $14-16k private party in my town. U could try and sell it. Than payoff loan, buy something bigger

I’ll echo the minivan suggestion if you’re going to look for another vehicle and want to drive everyone in the same vehicle.