Last year I decided to get a loan for a brand new 2016 Jeep Wrangler. It was about $30k after tax and I put about $5k down. The remaining balance was financed for 72 months at around 3%, leaving me with a monthly payment of about $425 which I've been paying for over a year. I have about $23,000 left on the loan. I could instantly trade in the jeep (sell to a dealer) for around $26,000-$27,000 (Wranglers are one of the few models of vehicles that hold much of their value used). I could sell to a private party for more like $28,000 if there would be any buyers interested in a used vehicle at a cost this close to the price of new.
I can afford the payment, and I really enjoy the car, but if I had a $5,000-$10,000 used car I could cut the payment by more than half or eliminate it altogether and have more money to save for a house down payment. This is my second highest monthly bill after rent. I don't have any credit card or student loan debt, and after paying that off I do remember how nice it was to be completely debt free.
So, I'm thinking about an older Toyota Corolla in the $5,000 range or a Prius in the $10,000 range. I'm perfectly comfortable driving and maintaining an older vehicle, since most of my vehicles have been older.
Why is it so difficult for me to go through with this and make what seems like a logical financial decision? Does it make sense to go through with the idea to increase cash flow and savings?
Submitted July 16, 2017 at 07:57AM by neongreensticker http://ift.tt/2uxm4tv
