Messed up financing a car, please help

[YourCompanysComputerGuy]

Hey all,

So I made a mistake and ended up financing a car I probably shouldn't have. I need some advice on what to do.

After driving beaters forever, I went to the dealership and drove a car I liked. It felt so great compared to my old POS I bought it on the spot. I feel like an idiot now for making an impulse buy, and I've had buyer's remorse since I bought it . Now, let me say that I actually like the car. It runs like a top and I havn't had an issue in the 9 month's I've owned it. There are a few things that bother me, like the need for more space for my daughter (it is a 2 door) but over all I enjoy driving the vehicle. I just feel like given my current finances I should have bought a cheap used car and ran it into the ground, fixing it myself along the way.

Here's the facts:
I make 45,000$ a year. Credit score is somewhere around 730.
The car:
2008 Nissan Altima w/ 135k Miles
APR: 6.99%
60 month loan
Payments are 298.25/mo.
Amount Financed: 15022.72
Finance Charge: 2872.28
Total Payments: 17895.00

I owe 13125 on it at this point.

NADA puts the "Clean Trade In" value at 11,400 and "Clean Retail" at 14,300. It is extremely clean and well maintained, by the way.

I have some other debt, around 8k in student loans and 2k in CC debt.

I'm really trying to get out from under all this debt, and I wonder what is the best option to do with this car? Should I just stick it out and pay it off? I've seen some early 2000's model cars with less mileage than mine, in the 4-6k range. Would it make since to trade mine in to get something like that? I would feel much better about paying off 6k than 13k.

Any advice would be appreciated

[disneysteve]

I owe 13125 on it at this point.

NADA puts the "Clean Trade In" value at 11,400 and "Clean Retail" at 14,300.

Sell the car (don't trade it in) for at least what you owe or more. Then buy a car you can actually afford. Payment should not exceed 10% of your monthly take home pay for a term of no more than 3 years.

[maat55]

Personally, I would sell it. Then, I would buy a car in the 3-4k range. I would borrow no more than you can afford for one year. Then, I would start setting aside a car fund and move up as needed paying cash.

[GrimJack]

I tend to shudder when I hear someone talk about 'financing' a car; maybe I am misunderstanding the difference but why finance a car when you can get a used car loan from your credit union? To me financing implies that, like financing a house, you pay the interest first then the principle whereas, borrowing the money from a credit union (or bank), you just pay the loan back plus interest.

Am I misunderstanding something?

[~bs]

IDK... $15k for an altima with 135k miles. Doesn't sound too hot to me. Either suck it up and pay the vehicle down and keep it for the long term or dump it, then buy a good running beater. Vehicles in general are horrible purchases.

I tend to shudder when I hear someone talk about 'financing' a car; maybe I am misunderstanding the difference but why finance a car when you can get a used car loan from your credit union? To me financing implies that, like financing a house, you pay the interest first then the principle whereas, borrowing the money from a credit union (or bank), you just pay the loan back plus interest.

Am I misunderstanding something?

sometimes you can get ultra low rates from the stealership, lower than the credit unions. of course this "cost" to the dealership is probably built into the vehicle price. If you can get a low rate, then it might make sense to finance it rather than plunking down the cash. But IMO, if you can't afford to pay for the vehicle in cash, then you can't afford the vehicle period. The only thing one should be financing is a home or investments that can generate money.

[asmom]

Sell the car (don't trade it in) for at least what you owe or more. Then buy a car you can actually afford. Payment should not exceed 10% of your monthly take home pay for a term of no more than 3 years.

I hadn't heard of that formula before. Is that your personal rule? Sounds like a good rule of thumb if you must finance a car and don't have the cash to buy one outright.

[Bingo]

you have an ok credit score. if you have been paying on this car since 2008 and you still owe the bulk of the loan - sell the car, clear the loan and finance a used car with less milage and 4 doors. Assuming you dont have the cash to buy something outright, get into a loan with a lower percentage rate before interest rates climb, which they will.

[snafu]

It would make sense to sell the car privately if you can get fair value. Do I understand correctly you bought a terrible financing contract with interest pre loaded? If you truly want to keep the car, does the contract allow you to pay down the principal? This has been a painful life lesson but if you learn from it there are benefits.

What are you willing to do or willing to for-go short term to clear this debt faster? For example, are you willing to take on a part time job to increase income? Will you apply any tax rebate to the 'pay off the car' fund? Are you willing to give up cable, eating out, meeting friends at the bar, tickets to the game, latest electronic gizmo, iPhone, vacation, making meals at home, brown bagging lunch etc applying all those small sums to the pay off the car fund?