Sell My car...yes or No?

If you're upside down, I'd say no. If it's hard to make the payments, I'd say Yes. If you can afford 1K a month on a car payment (12K in one year), how much more than 24K is a Camry?... just wondering.

S.

We are Ramsey followers as well. We were upside down in a truck by thousands of dollars. If we traded it in on something cheaper, we'd have to take out a loan to pay off the difference. We didn't like that idea, so we kept it as an exception to Ramsey's guidelines--for awhile. Just this last week, we bit the bullet and traded it in on a $14,000 new car (husband wouldn't go for a cheaper used one) and took out a very low interest rate loan on the difference. We feel SO GOOD about our decision!

Good luck to you and your family!!

I'm not really familiar with this Dave Ramsey guy but before I sold a relatively new car, I would make certain to do ALL the math and see if you come out ahead or behind. Sometimes it is not feasible to sell.

If we do get a car loan, we know well in advance that it will be clear within 12 months or we don't buy the car.

You really didn't give enough information for good answers. Is the car an '08 or just new to you? What is your current interest rate for how long? What do you owe? What is the current value of the car? How many miles etc? There are many factors that determine the value of a car. If you can trade it in or sell it what interest rate can you get on what you may still owe? What interest rate do you qualify for now if you do buy another car? Do the two payments come up less than the current one for the car now? And don't forget the insurance just because you get a cheaper car doesn't mean your insurance will be cheaper, fewer safety features, lower scores in crash tests, more costly to repair (more damage done with less impact) can all cause higher rates. Do you belong to a Credit Union? If you do they should be able to help figure some of this out. Make sure it works on paper before you do it, that you wind up paying less in the end (meaning less in interest not just time). Take your time do the math, it either works or it doesn't.

Which option saves you the most money? How much do you really like your car? Gas mileage? Do you need space for trips that a smaller car doesn't provide? I have a SUV that uses lots of gas, but I,also, have two small children who need a stroller and car and booster seats, so I need the space and convenience more than I need to save some money on gas. We can always use my husband's small car if gas sky rocket's like last summer. Make a list of pros and cons and see which option makes the most sense for your family. I am not a big fan of Dave Ramsey anyway.

We sold my one year old van for this VERY reason....we are Dave Fans and still working the program. My van was $540 per month and we did sell it and actually took a loss but in the end are ahead with two years of no car payments since we bought the 'cash' car....it feels great to not have car payments. I think each situation is different. We are slow in this program due to me not working full time to be with our children, so do what is good for your family, but I wanted to share how freeing it feels to not owe on a car...even if the car I currently drive is not in style....LOL.

I've followed Dave Ramsey as well. and we live credit card debt free... we do have 2 cars - less than one yr from being paid off ... the other 2 yrs.
If your car loan is at a good interest rate, I say keep the car and try to make bigger monthly pymts to pay it off faster. We have good credit ratings so our loans are always at a low interest rate.
I think it's wiser to keep your monthly surplus and put it in savings, rather than completely pay cash for a new car. (IF you have good interest rate on the loan)... Especially in this economy, when all the financial gurus are telling everyone to have at least 6 months of living expenses in savings just in case your husband loses his job. And that savings needs to be in an account that is touchable -- NOT 401K. They say never to touch 401K unless it's an emergency and all other options are utilized.

anyway, another question is what is the value of the car right now? Have you gone on Kelly Blue Book to see what the trade in value or the resale value is? If you just bought last summer - chances are you are upside down on it.... You owe more on it than what it's worth b/c the value of a new car drops considerably once it leaves the lot. So you definitely don't want to take a loan on that difference - if you get a new car -- you will owe the car dealership money for them to take it off your hands.
I think you should pay it off as soon as possible -- try to make bigger payments each month to do that. That seems more reasonable in this economy. And sock money away in savings.

We are just starting to follow Dave's plan and we have decided (as of today) to sell our cars. It makes the most sense for us because it is cutting our debt...and that is the whole point of this plan (well baby step 2 anyway). We are not upside down in our payments, but if we were we would still do it. I don't know how much you owe, but lets say you owe 25000 and the car is only worth 22000 dollars. You are upside down by 3000. If you buy a car for 9000 to get by and get a new note for the other 3000, that is only a 12000 dollar debt instead of 25000. Huge difference. I am very attached to my van, but us getting rid of it and our other vehicle will help us pay off our debt much sooner! Good luck in your decision!!!!