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I just thought I'd ask your opinions because dh and I are having a hard time agreeing. Here's the situation:
We have two cars, an '07 Tahoe that we owe $22,000 on and according to the banks is worth $17,000 (kbb doesn't agree, it says it's worth about what we owe but whatever), and a '99 Ford Crown Victoria that is worth about $3000-$3500 and we own free and clear.
The goal: to get rid of the Tahoe because of the ridiculous car payments, get rid of the Crown Vic because it only seats 6 and buy two different cars (we're thinking a suburban and a minivan; whatever but both cars must seat at least 7 people, preferably 8).
Financially: Once income tax comes next week, we'll have about $4000 to play with.
Dh wants to sell the Tahoe for $17,000, get a loan from our credit union for $5,000 to cover the difference so that we'll owe 5K instead of 22K, use the $4000 to buy a burb or van, then sell his car and use that money to buy a second burb or van.
I want to first use the 4K to buy a car, then sell his car and buy a second burb or van with the money, and then finally sell the Tahoe for the 17K or the most we can get out of it and take out a loan to take a hit on it.
The reason dh has for doing it his way is because he wants to get rid of the Tahoe before the value goes down any more, but what he's not realizing is that if we do it my way, as soon as we use the $4000 to buy a car, we won't have to drive the Tahoe; we'll have 3 cars, so we won't be putting more miles on it. Duh.
The reason I have for doing it my way, is that no matter what stage we are in in this process, we will always have 2 vehicles that seat at least 7 people. The baby is coming in about 11 weeks and I'm terrified of having only one car that fits all of us and then it breaking down (entirely possible since we'll be buying older used cars) and us being stuck with no car that we can all use together.
I know it's hard to wait for things when it's getting so close to baby time, but, if I had to choose, I think I would:
1. Not take my lein holder's word for it concerning the value of the Tahoe. Try to privately sell the Tahoe, start with asking $23,000 and see what you get, it might be enough to pay it off completely! Then, once it is sold, use your Crown Vic in a trade-in special (I've seen some dealers here offering minimum $5K trade in value, even if you have to tow it in) for a vehicle you prefer and your $4000 for another so you have some equity in both of your new vehicles which should help bring the new payments down some.
If the Tahoe doesn't sell within a pre-baby time line that you are comfortable with (say 5-6 weeks?)
2. Talk to a dealer about what the trade in value would be for your Tahoe (instead of the lien holder) if it would be enough to cover your loan, trade it in at the dealer, also trade in your Crown Vic and apply the CV trade in + any excess (if you're lucky) from the Tahoe + the $4000 to get one of your newer vehicles free-and-clear and then figure out what you can get for the payment you're able to afford (if you don't need 2 large vehicles, consider getting one smaller cheaper more efficient vehicle for DH to drive to work, if that would be practical in your situation, to save money)
I understand wanting to quit putting miles on the Tahoe, but, unless you drive a TON I doubt you'll put enough miles on it in the next 11 weeks to affect the value and I'd be nervous about having 2-3 car payments if you're already feeling stretched on the one. Not to mention having to get insurance and tags for all of them.
If, on the other hand, you're planning a budget of $7-7.5K (the tax return + value of Crown Vic) to own the two replacement vehicles free and clear, I would tend to agree with you and unload your most unreliable vehicle for something more reliable before the baby is born and wait it out for a private sale on the Tahoe where you'll get more money than you would with selling it to a dealer.
Good luck coming to an agreement and I hope you're able to unload the Tahoe without having to pay to do so.
I'd sell the Tahoe (preferably for the more than 17k, and something closer to what you owe on it) and use your tax return for the difference, that way you're done with it. I'd then go buy something that would fit your whole family well, have payments on it if need be, and I'd keep the car for the time being, it's paid for, and whoever doesn't have the kids with them drives it.
But this is me, and we're all very different with stuff like this. I would not go for a $5000 loan on something I no longer owned, I would cut my losses and be done with it if at all possible. I'd stick with 2 vehicles, and I'd keep the car that's paid for, at least in that kind of price range you know what you have, rather than buy something that's worth $4000 (it could end up costing you a lot more in repairs).
Good luck with your decision, hope you come to a compromise and hopefully your Tahoe sells well.
Where I got the $17000 figure was because we had a potential buyer who tried to get a loan for it and she went to two banks and both of them would only loan $17000. We have also gotten an offer from a dealership for that amount.
The next cars we get will be bought free and clear and won't have a car payment. I am so done with car payments!!
I would still price the Tahoe per kbb. It's not uncommon to need a down payment at the bank when buying a car. (The dealership offer alone tells you it is worth more.) Slap a for sale sign on it now (now being the best time because everyone is getting there income taxes back) and see what happens.
Don't stress out about having 2 vehicles...I did that with #6. I just had to have a 12-15 passenger van before baby came. We jumped on the first good deal we found and 2 weeks later it broke down, lol. Baby ended up coming and we only had dh's car that fit 5 and my van that fit 7. We just didn't really go anywhere until it all got sort out. Which with a brand new baby, you don't really want to go out all that much anyway.
Take your time and it will all work out perfectly!
If it were me....
I would put a for sale sign on it and see what you can get for it without a dealer.
Gosh, I gotta run, but it's not as easy as it seems
Our baby is due 3 days after yours and I'm starting to get worried about what we do with our vehicle as well, since we can't bring the baby home and all fit in one van. The kids joke about who will ride on the roof . Didn't mean to take over Sarah, just wanted you to know you are not alone.
Jesus loving, homeschooling, gardening lover, devoted wife to a wonderful hubby and 10 kids, ages 13 down to 12.5 months . We are expecting number 11 due January 1st, 2015.