Auto Loan Refinance

[BrokeMarine]

Ok so I find myself in a situation where I'm making a car payment of $600 toward my 2009 Honda Odyessy and need an additional car to drive 75 mi round trip to work (gas saver). It's worth about 28-29k (according to kbb online)and I only owe 23k on the loan after two years. I can't afford another car payment and have no money to buy a second car cash. Should I refinance my auto loan and get a smaller rate and payment or does anyone know of any programs where I can trade my Honda for two cars totalling the same payment. Is that even a smart thing to do?

-Former USMC

[disneysteve]

My advice would be to sell the Odyssey. If you can get 28K for it, that will pay off the 23K loan and leave you 5K profit. Go out and buy 2 affordable cars that meet your basic needs. By affordable, the rule of thumb is payments for not more than 3 years for not more than 10% of your monthly income. I'm assuming the Odyssey loan didn't meet either of those guidelines.

[BrokeMarine]

Actually the auto loan was about 15% of my monthly salary. But now our credit has gone down since we first bought the car due to other credit problems. We have never been late with the car payment and have paid more than the monthly minimum every month. We got financed through Honda so that's my only saving grace with them if we go through Honda again. I just wonder if they will make me put a down payment again.

My only problem with selling my car Private Party is getting someone to shell out all that cash for a PP purchase.

[Petunia 100]

It isn't necessary to have cash in hand to buy a car from a private party. You simply arrange your financing first at a bank or credit union, then go find your late model car.

With a large car loan, plus insurance, plus gas, plus maintenance, that is a very big car expense. Personally, I would think long and hard about it. What about your long-term savings, short-term savings, etc? Are you having to short change those?

[dczech09]

First of all, what do you need a second car for? For driving to work? For business use?

I put at least 100 miles on my car per day; in fact 100 is actual a modest day for me. I put those miles on the same car I use for personal use. I get all of my tax right offs for work mileage, yadda yadda. My car is a 2005 Toyota Corolla that will probably live to see 500,000 miles. My car is not worth $20,000+; in fact I bought it on a loan for $11,000. I paid off the loan in less than 2 years.

So why do you need a $20,000+ car. Better yet, why do you have a $23,000 loan? A $600 payment that is 15% of your income is too much. You're gonna have to sell the car and find something affordable. Get something that can be paid off in less than 3 years and is no more than 10% of your TAKE HOME INCOME.

Look into getting one car for everything. I have no idea why you think you need a second car. If I cannot talk you out of it, then get a couple of beater cars. Bottom line: the loan is killing you!

[wincrasher]

I would assume that the Mrs needs to have some wheels while he's 75 miles away at work each day.

If that is the case, I'd recommend that you keep the reliable car for your commute and buy a wreck ($1000-$2000)beater for the wife to have to go to the grocery or what-not around town.

[maat55]

No matter what, I would get rid of the Odyessy. You cannot afford it. Personally, I would buy two beaters with any excess cash and start saving cash for a replacement. 600 per month will get you a good trade up in one year.

Believe it or not, you can do this and be glad you did it.

[cschin4]

You have a car, but you "need" a second car why? This is nonsensical. Drive you car and pay it off. Forget about getting another one.

[nick__45]

Originally Posted by cschin4

You have a car, but you "need" a second car why? This is nonsensical. Drive you car and pay it off. Forget about getting another one.

Take this advice. The van doesn't get that bad of a gas mileage. You can open yourself up to a lot of headache with a beater for that type of commute. I am assuming that your take home is 4000 dollars if your 600 dollars car payment equals 15% of that. On that note, you have less than 4 years left on this car payment. I would stick in there and take good care of the car and sleep well knowing that it would start and drive safety to work every day so you can continue bringing the cheese home.

My commute is only 40 miles each way and I am very familiar with the areas I am passing through since I grew up here. This is the only reason why I drive a 92 Corolla that I had put some money into to make it reliable. Otherwise, I would be driving a newer vehicle, preferably very good on gas. My guess is that you want those vehicle getting 35 mpg or more. You can get a used Corolla from late 90s or early 2000s for under $5k (they are high now due to gas price) with not many miles on them. Just make sure to check how much it actually cost to get the timing belt and water pump replace and factor it into the purchase price. For someone bringing home 4000 dollars a month after tax, $5k should not be a problem. Then you'll have a reliable car for commute that would save you on gas and a presentable vehicle for family things.

I wouldn't sell your van because you'll regret it. And I would never let a female spouse drive a beater, even if I hate her. A cheaper car insured as a primary vehicle will lower your insurance significantly.

[nick__45]

I just reread your post and 75 miles are actually round trip. In that case, my advice above makes even more sense. Keep the van dude. You don't drive that much to make a difference. But you don't need a small second car. I thought you drive 75 miles each way when I recommended a used Corolla. You drive less than me and most commuters. Your right foot is the main factor here.

[BrokeMarine]

Originally Posted by cschin4

You have a car, but you "need" a second car why? This is nonsensical. Drive you car and pay it off. Forget about getting another one.

The reason I need a second car is my Odyessy only gets 23mph Hwy and it costs 75 dollars to fill it up. Yes it's nice to have a reliable car to drive to work, but the gas mileage is killing my pocket book and the warranty. I also need a second car for my wife and the kids. I work a job that has me going to work on my days off some times or has me stay over at a moments notice for hours on end. I would still have to figure in insurance costs on the car as well....wish I could win the lottery about now.

[cschin4]

Here is how I look at it. First, get a calculator, how many miles PER YEAR are you driving?
I will assume about 18,000 or about 48 weeks of driving. To drive 18,000 miles, you would need to purchase 782.6 gallons based on 23 mpg. If gas is $5 a gallon, the cost for you to drive that year is $3913. If you are really driving 20,000 miles per year, the cost is 869 gallons for $5 at $4347.

Ok, so now you are going to buy another car? How much, which one, how many mpg? Assuming you get a car that gets 35 mpg, and most of them don't and there is a lot of exaggeration on mileage stickers when used in the real world, here is what you would save:

180000 miles per year cost 514 gallons which is $2571 at $5/gallon.
20000 miles per year for 571 gallons would be $2857 for the cost of gas.

So, now, you keep what you have and spend $3913-$4347 or get another and spend %2571-2857. The max difference is $1490. So, based on this, does it make sense to purchase another car to save $1490 a year? And, obviously, you are paying for a car so if you pay the cost of car, you are going to spend way more than the $1490 and it would take years for you to make up the difference.
That is how i would look at it. The cheapest car is the one you already have.

[wincrasher]

Originally Posted by BrokeMarine

The reason I need a second car is my Odyessy only gets 23mph Hwy and it costs 75 dollars to fill it up. Yes it's nice to have a reliable car to drive to work, but the gas mileage is killing my pocket book and the warranty. I also need a second car for my wife and the kids. I work a job that has me going to work on my days off some times or has me stay over at a moments notice for hours on end. I would still have to figure in insurance costs on the car as well....wish I could win the lottery about now.

Wow. Are you sure there is not something wrong with it? I get 28 mpg in my 2009 Odyssey Touring pretty consistently. You may need a tune up. Check your air filters, tire pressure. Adjusting your driving style helps, like avoiding jack rabbit starts and stops, and using cruise control. I've also found that mileage can vary based on where you buy your gas. Cheap gas invariably means lower mileage - I always seem to do better with Shell and the worst with anything from a convenience store. Costco gas is also excellent.

[LivingAlmostLarge]

Buy a $1k beater or $2k and drive it till the wheels fall off. You need a second car if you are overnight away.