In 2022 my car (a 2010 Nissan Versa) kicked the bucket. The engine was broken and needed to be replaced. Rather than spending even MORE money on repairs (I had spent a few thousand or so on various other parts at this point), I decided to buy a newer car that would, presumably, require fewer repairs in the short term.

I bought a 2021 Honda HRV for ~$20,000 at 7.59% APR. I pay $414 a month and have $16k left on it. I bought this car under the worst possible circumstances:

  1. Used car prices were very high at this time
  2. Interest rates were high due to inflation
  3. I needed a car because my previous one had died so I didn’t have the luxury of time

My hope, at the time, was that inflation would be tamed and interest rates would eventually be lowered, wherein I could refinance the loan. I no longer believe this is a possibility within the next 4 years or so. I was also hoping to find something small and cheap like a Honda fit, but I learned that they had stopped producing them. An HRV seemed like a sensible kind of car given the modest physical needs of how I used a car at the time

So, here’s my question: Should I just sell my car for something older? Maybe like a 2015 or so? Or should I just stick with my current machine until it’s paid off and try to refinance after 2028?

If I could go back in time, I would’ve sold the Versa in 2020 or so, before I had spent a bunch of money on repairs. Hindsight is 20/20 though

  • acchariya@lemmy.world
    0·
    1 day ago

    Your payments are not terrible for today’s car market, and you have a practical, late model car. It doesn’t seem like you will come out ahead on getting a different car because of the transaction costs associated (registration, etc).

    If you don’t drive it, it will depreciate slower and when and if it no longer meets your needs you will get more for it. You could probably get an older model for cheaper, but it will inevitably need work and you roll the dice with being stuck with an expensive repair.

    You could also lease an electric car with the stupid low lease prices they are offering, but then you are still on the hook for expensive insurance and are in a worse position in three years.

    Dump any extra you have into extra payments on the car for an easy 7% ROI, and use it to get groceries once a week.