Selling stock to pay off car

[somegirl]

I am debating selling some stock I own to pay off my car...here are the particulars:
I pay ~$325 per month on my car, it is 5.125% interest, and i have about 5 years left on it
The stock i would sell would be from two places, one would be exercise to sell stock options which would be taxed as income, the other would be from an Restricted Stock Award which would be capital gains but only on about $200-$500 in gain.

Any thoughts on what I should do????? I hate to have the stock options go to waste adn i basically can't afford to pay for them without selling immediately so I figure that would be a good way to get rid of car payment and maybe use that money to buy some later??

Thanks for any advice!!!

[Ima saver]

Re: Selling stock to pay off car

I think it is a good idea.

[somegirl]

Re: Selling stock to pay off car

Sorry to be a pain but can you tell me why you think it is a good idea? I am trying to understand all the in and outs of this! :-) Thanks

[kristinecfp]

Re: Selling stock to pay off car

We really don't have enough information to answer your question. But here are some things to think about:

How much are these stocks earning? Is it greater than the interest on your car loan?

Do you lose any of the stock options if you don't exercise right away? Do you have a lot of stock options to exercise? Is the market price of the stock greater than the exercise price?

How much tax will you pay on the stocks if you sell? Can you afford the tax on the stock options if you exercise?

Do you have any other debt? Is it at a higher interest rate than your car loan?

Stock options and restricted stock can be complicated creatures. Because of the complexity, it would be in your best interest to consult a tax professional who has experience with these types of investments, rather than consulting a forum (Note: I love this forum, but it's better to consult a professional when you're dealing with complicated investments like stock options and restricted stock).

[MonkeyMama]

Re: Selling stock to pay off car

I am with Kristine. Not enough info - depends on all of the tax ramifications.

We actually did sell some stock to put down on a car this year ourselves. We had been waiting for a high income year to sell this stock since it would generate a large loss ( from the days of the dot com bust). We only had 1 good stock I Would have kept, but overall I Am done with stocks, and didn't intend to keep it anyway.

If it is a good stock, would change my opinion.

So in theory I am with you and have been there. Just not enough info to say for sure.