Single Mom Money: Sometimes Things Can't Move Around

Wednesday, March 16, 2016


It's been a pretty long time since I did a money-related update, so I decided to share my journey at re-looking at my current car payment and [maybe] shopping around for some other options. Hoping this will help some of you looking to get the most of your money back into your bank account!

So - [DO NOT SPIT OUT YOUR COFFEE] I have a monthly car payment of $606. Yep. That's six HUNDRED bucks a month. I own a 2013 Honda CRV EX-L with navigation - it's fully loaded (heated seats, sun roof, navigation, etc). I did a buttload of research on this thing, test drove all kinds of small SUVs and my gut told me the CRV was for me. So I bought one brand-spanking new off the lot with like 149 miles on it. I did a bit of haggling on the car which retailed for $29,000 and ended up snagging it for $23,000 before taxes. I was upside down a bit on the car I traded in though, so that kind of brought me around $26,000 when the loan was all said and done.

Anyways, I did a 5 year loan through a local credit union and after 2 years (in 2014), refinanced my car to pull out the equity so that we could have money to move (this was when I was still married). We needed the money but it extended my loan for an extra year so currently I have about 31 months left until my loan maturation date of 10/2018. Boo.

I've talked a lot about the goals I have for the next few years and big, huge one is paying off ALL my debt and buying a house in my preferred school district by the time H&H are ready for kindergarten in 2019. I've been doing great - paying off 1 student loan and so close to paying off a second one. I also paid off our personal loan for our "family expansion" plans which was the purchase of some remaining vials from our donor because we wanted to expand our family. Post-divorce, I wanted to get rid of that debt ASAP because - feelings.

But every month as I write that check for SIX HUNDRED AND SIX bucks - I get a lump in my belly wondering if I should be paying less on a car. Where else could that money be going? It could definitely be helping pay off the debt faster. Let me preface this by saying; I CAN AFFORD MY CAR. If I was in any other situation where getting rid of my car meant having to decide between my next meal or a bill being paid - the car would have been gone long ago. But I'm not and that's part of what makes the decision so hard because it's not causing any financial strife. It'd just be a nice to have that extra money in my pocket each month.

So I listed a ton of pros and cons of selling my car versus keeping my car.

Some pros:
  • I'm already almost 4 years into ownership and paying mostly principle on the loan
  • It's a Honda and has 60,000 miles on it - it'll last until 200,000+ miles
  • I LOVE it - it's fully loaded and a great size for our little lady family
  • I've never had 1 issue with the car
  • I *only* have 31 months left on it
Cons:
  • The payments are astronomical 
  • Maybe I'd be looked at like a "failure" or be embarrassed to need a cheaper car
I literally have no other cons, except the payments are pretty high. I bounce back and forth constantly on whether I should trade it in for a cheaper vehicle or just keep it. I have talked to numerous people about this - what would they do. I get strong feedback for people on both sides of the fence and everyone has excellent reasons for both. Sell it! Why do you need a high payment like that! Keep it! It'll last forever! Sometimes I feel like it's a ping-pong match in my head.

I called my dad and asked him what he'd do. Truthfully, he's not the most financially savvy person but he has a ton of just everyday knowledge and I respect his thoughts. I wanted to know what he'd do. He asked why I would sell it if I can afford it. He's point blank said, "If you are not having issues on it, and can afford it - why would you get rid of it? You could assume a cheaper, older vehicle that you don't know the history on and end up pouring money into the vehicle to keep it running. At least you know where this one has been. Keep it for another year and then see where you're at and if you still want to lower your payment." 

Hm. 

Well then - I mean, if I wait a year then I only have like 18 months left on my loan. So OF COURSE I'll keep it by then. But I totally get what he's saying. It all makes sense. And do I alleviate a few hundred dollars a month to take on a car with high mileage or a history that I'm not familiar with? It's a risk, and the last thing I wanted to do is pour money into my car for repairs again and again. 

So for now - I'm keeping my car. Every time I send in the payment, I buy myself another 30 days to think about the decision and at this point I think it's something to really really think about. My kids are transported into this car. I need this car to get to work. So - I can't afford to make a rash decision. And so I think.

What would you do in this situation? Would you trade in or keep your car? I'd love to hear what your point of view is!

4 comments:

  1. That's a tough one! It would be really hard to pay that much each month, especially with student loans and other debt. But at this point you may be in so far that it's not worth changing. You still have almost $19,000 in payments left to make on this car. If you traded it in for a different car, could you get what you wanted for less than $19,000?

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    1. Firstly - thank you for reading this extra long post! :)

      And that's totally where my issue is - I can get the same (or maybe a little lower car payment) but still be paying on interest whereas a little above $500 of that $606 per month currently goes straight to principal. I guess I stick it out for the next 30 months! I'm also okay with that too though because in that case, I'd like to keep this car for as long as possible (up to 200,000 miles maybe!). Thanks for visiting! *a

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  2. that does seem like an awfully high payment! i wish i could speak intelligently about loans, but i cannot. however, i do know how important it is to have a good, safe car that you actually like and enjoy. my vote is to stick with what you have! :o

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    1. Ugh, I know! I was looking up used Hondas again today (because I'm obsessed with research) and even a 2006 CRV is still $9000! Granted that saves me 9K currently - its still an older car. I guess I keep plucking along and buy myself another 30 days to think about it after I make a payment each month! :) Thanks for your comment! *a

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