People good at the economy plz help (Car Buying Help)

[Agentnibs]

My family is dying
We have a 22 VW Atlas, and for as big as it is, I'm finding it kinda small for us (3 kids). So I've decided to bite the bullet and just get us a minivan, specifically a Honda Odyssey. I think it makes sense on paper, but I wanted to get more opinions.

This is our current situation:

Current Car:

• 22 VW Atlas R-Line
• 27k miles
• Balance 45k @7.99
• Monthly payment is 975 plus insurance is like 180
• KBB says my car is worth 35k

Replacement Car:

• 2018 Honda Odyssey Elite
• 25k miles
• Price 29,999
• Don't know what insurance costs

I can put down like 10k if I need to

I've also looked at other odysseys in our area, typically they have closer to 90k miles and are like 25kish. This one is bonkers at only 25k miles imo.

I've been fortunate enough to be able to pay for our car just fine, but at the same time, paying 1000 a month for a car is stupid, and I'd much rather save hundreds if I can. But I'm also upside down on my current car and interest rates I'm seeing from banks are like 8-10% for some reason. CC says my score is 720.
I also have a motorcycle I can sell/trade. I paid 6k for it two years ago, and I figure I could get a few thousand there, too.

Should I wait until I've paid off more of my car? Or should I trade it for the van? Should I do something else? Any advice would be greatly appreciated!

 

[lobdale]

Holy fuck a cool thousand bucks a month on your car with 8% interest? You gotta get out from under that thing for sure... but being upside down on it I can't really advocate taking a 10K shot just to change cars, you'll need to substantially reduce your down payment and interest rate to make it worthwhile.

Keep in mind any car note for something used is probably gonna come to you with a higher interest rate--check around at credit unions and see if anyone can offer you something better than 8%. Your credit is pretty good.

But let's see what other smarter people than me say on this one, I'm kind of a cheapskate with cars

 

[Thesleepydweeb]

It would be best to address the negative equity.

You could pay it down yourself or get someone to overpay for your car via a private sale.

Then get the other car you want. There may be minor issues you need money set aside for because it's from 2018. Like headlights bulbs going out or something like that.

You also have to be wary of low mileage in the sense that for example it may have sat in a driveway and not been taken care of or driven. You need a mechanic to put it on a lift and do a typical inspection. Perhaps ask them after the inspection if they'd get it if they were in your shoes.

 

[Slackerchan]

As someone who has had the same vehicle for the past 13 years, I'm not in a position to really offer an educated opinion here but a $975/m car payment sounds atrocious. If you can get a better payment by getting the Odyssey then I'd say go for it.

 

[Taco_Human]

never put money down, get as low % as you can

 

[Lunchbox-]

1000$ a month is a mortgage payment… well atleast it used to be in a reasonable world.

since you're upside down on your equity, that's -10, so the honda will be at 40k and won't help your monthly payment. it will actually hurt you more since interest rates are higher now, so there's a chance your payment increases (if you don't do the 10k down) don't take on additional debt. interest rates will (hopefully) come down next year. stick with what your stuck with right now

VW, you owe 45k @ 7.99
Honda, you will owe 30k+10k from Vw loan @ 8-9%

and the honda is an older car, so you're basically saving 5k to get a 4 year older car and worse loan terms. don't




edit - this is also assuming you actually get the full 35k for the atlas. kbb doesn't guarantee anything. and taxes, registration, fees etc etc. so yeah, i wouldn't

 

[GalaxyDive]

never put money down

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In the current climate (....and in general lol, really depends) I find this to be bad advice. OP isn't going to get a good interest rate now, if they do actually go through with this in the immediate future, it's in their best interest to put money down and have as low of a note as possible to avoid taking (another) bath in interest.

 

[SpecX]

Even though the KBB value is 35k, the dealer will not give you that for the VW. They will probably offer 5k+ lower since they will have to put money into bringing it up to resale standards if they plan to keep it on their lot, or they need enough to make up what it will sell at auction.

 

[Agentnibs]

1000$ a month is a mortgage payment… well atleast it used to be in a reasonable world.

since you're upside down on your equity, that's -10, so the honda will be at 40k and won't help your monthly payment. it will actually hurt you more since interest rates are higher now, so there's a chance your payment increases (if you don't do the 10k down) don't take on additional debt. interest rates will (hopefully) come down next year. stick with what your stuck with right now

VW, you owe 45k @ 7.99
Honda, you will owe 30k+10k from Vw loan @ 8-9%

and the honda is a older car. you're basically saving 5k to get a 4 year older car and worse loan terms. don't

Click to shrink...

Haha I would love it if my mortgage was only 1000 😭

Would it help at all to just pay 10k and not be down?

In the current climate (....and in general lol, really depends) I find this to be bad advice. OP isn't going to get a good interest rate now, if they do actually go through with this in the immediate future, it's in their best interest to put money down and have as low of a note as possible to avoid taking (another) bath in interest.

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Yeah I guess the way I think about I care more about saving money on a monthly basis instead of over the long run. I intended to save the difference and pay off other debts.

 

[Muu]

Have you checked value at Carmax and such? That might be a good starting point to see what dealerships will actually give you assuming you're gonna do a tradein.

And what's the problem w/ the space in your current car? Not enough space for crap, or not enough space for people? If it's the former a roof rack system and a box can be had for ~$1000. Assuming you want to keep it within a certain monthly cost I'm not sure you're gonna come out ahead switching cars right now given how high interest rates are.

 

[Agentnibs]

Have you checked value at Carmax and such? That might be a good starting point to see what dealerships will actually give you assuming you're gonna do a tradein.

And what's the problem w/ the space in your current car? Not enough space for crap, or not enough space for people? If it's the former a roof rack system and a box can be had for ~$1000. Assuming you want to keep it within a certain monthly cost I'm not sure you're gonna come out ahead switching cars right now given how high interest rates are.

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Mostly people, we have two young babies in cars seats that block the doors and our oldest has to jump in from the front or the back. I suppose that is first world problems though.

The big motivation was that I would save money and just have a more suitable car. Sounds like I wouldn't be saving much after all.

Would refinancing and hoping for a better rate be better?

 

[CubeApple76]

Would refinancing and hoping for a better rate be better?

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I doubt you'll get a better rate right now, or even this year really. The Fed will cut rates at most once or twice based on current economic data, and even if it does cut it'll be 25 basis point cuts so nothing big.

If I was in your position I'd probably use the 10K to get out from the negative equity, and sell the current car, and then buy an older minivan for ~10-15 K. Should be able to cut your car payment by half or more if you did this, and you can probably find a 2015 or so w/ 80K miles at that price. That kind of car still has tons of life in it. 1000 a month for a single car payment is insanity to me.

 

[Muu]

Mostly people, we have two young babies in cars seats that block the doors and our oldest has to jump in from the front or the back. I suppose that is first world problems though.

The big motivation was that I would save money and just have a more suitable car. Sounds like I wouldn't be saving much after all.

Would refinancing and hoping for a better rate be better?

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You could try and see what PenFed gives you, but their absolute lowest is ~5.5% now and that likely assumes 800+ credit. Honestly not sure how much you're going to benefit shuffling money around.

If the car seats are the problem, why not get narrow car seats? Those exist and maybe set you back $250 ea if you don't get them in sales. I mean, does sound like you WANT a new car, but everyone's telling you it's a bad idea, and there are likely solutions for whatever issue you're having that doesn't involve buying a new car.

 

[thewienke]

Mostly people, we have two young babies in cars seats that block the doors and our oldest has to jump in from the front or the back. I suppose that is first world problems though.

The big motivation was that I would save money and just have a more suitable car. Sounds like I wouldn't be saving much after all.

Would refinancing and hoping for a better rate be better?

Click to shrink...

Speculation is that rates will come down a bit by the end of the year. So I would refinance once you can get down below 6% (or better). Might not happen this year but probably in the next year or so maybe?

I don't know what your other debts look like but I would attack the holy fuck out of this car debt. I think the Atlas is a nice vehicle and should get you to 100k relatively trouble free provided you do all the scheduled maintenance. It's not what I would have picked out for someone in your situation but a lot of times the answer is that you're stuck with what you've got and that seems to be the case here.

People used to have three kids in the back of a 90s Honda Accord so I believe you can make this work.

 

[Cat Party]

Keep the VW for now. It's under warranty and you'll have to pay the negative equity when you sell it. Wait to see if interest rates go down enough that you can refinance the loan to get that payment down.

A 2018 Odyssey with only 25k miles on it sounds like a scam, honestly.

 

[Lunchbox-]

Would it help at all to just pay 10k and not be down?

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it's not gonna lower your new payment significantly, because the rates are higher now

if you have an extra 10k, putting that towards your existing loan. then refinancing later this year/early next year would be a better option. because right now, you will get a worse rate.

the main problem is you bought that atlas at the wrong time when prices were at their peak. so it's gonna be hard to climb out of that hole with a lower payment unless you significantly downgrade (as in look for a 2015 and before car as a replacement)

 

[Radd Redd]

😳1000 a month on a car. What is going on. That's more than double what we used to pay. Good Luck.

 

[BringBackSonics]

Atlas has 3 rows for seating. Is cargo space/pets the bigger issue?

Odyssey would also only have 3 rows

 

[Autumn]

You're not getting anything near that resell value for the Atlas.

 

[BringBackSonics]

A 2018 Odyssey with only 25k miles on it sounds like a scam, honestly.

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Not really? That's what 4K miles a year, if it's not used as a commuter, it's possible just for parent pick up/groceries to not really hit high mileage

 

[Sillution]

Your payment for swapping cars would be about the exact same due to the negative equity you currently have in your car. Plus, more than likely they will try to give you a higher interest rate due to buying another used car with negative equity going into it.

 

[Cat Party]

Not really? That's what 4K miles a year, if it's not used as a commuter, it's possible just for parent pick up/groceries to not really hit high mileage

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Sure, but I'd be suspicious depending on who is selling it.

 

[Lumination]

Mostly people, we have two young babies in cars seats that block the doors and our oldest has to jump in from the front or the back. I suppose that is first world problems though.

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For the money you'd save, the 2min your kid will spend jumping in and out of your car will be the highest hourly wage they'll earn for quite some time lol.

 

[Thebox]

Or you could do what a car salesman told me to do. Buy a 10k car without trade in and let the bank take the other car. I thought that was absurd since I would not only have a repo on my record but then the bank would come after me for the remainder of the loan once they sell the car and if I have to make payments on that plus the other car it would put me back where I was.

Apparently, according to the salesman I talked to, people do that all the time. He even said the bank wouldn't try to garnish my wages if I didn't pay them the remaining balance of the loan after auction. Which, I know is bullshit.

 

[GrimGrinningGuy]

keep it and deal with it. $1000 a month good lord

 

[froday]

Have you tried refinancing the current car loan? My wife went from 11% (Used car, nuts APR) to 6.5 something or other. I would pursue that first. That would be money right into your pocket.

Really hard to justify selling a car when you are upside down on the note, I would deal with it if you can.

Also, I would not be afraid of going higher mileage on Hondas. They are really great cars, and the "cheap" 25k mileage car might have other issues that are bringing the price down.

 

[winjet81]

Can you get the third row option installed?

Honestly, it'll cost more to transition over to the Honda, so you should just hang on to the Atlas until you have positive equity (if ever) on it.

 

[Agentnibs]

Or you could do what a car salesman told me to do. Buy a 10k car without trade in and let the bank take the other car. I thought that was absurd since I would not only have a repo on my record but then the bank would come after me for the remainder of the loan once they sell the car and if I have to make payments on that plus the other car it would put me back where I was.

Apparently, according to the salesman I talked to, people do that all the time. He even said the bank wouldn't try to garnish my wages if I didn't pay them the remaining balance of the loan after auction. Which, I know is bullshit.

Click to shrink...

lmao, what the hell


Thank you all for the advice everyone. Based on all the feedback I'll do the following:

• Keep my car at its current rate and continue paying
• Buy narrow car seats
• Use the 10k that I would have used for the car and instead pay off some credit cards.
• After all my other debts are resolved I'll aggressively pay the car loan to hopefully not be upside down
• Sell the motorcycle anyway and use it to help pay it down
• Try refinancing in a year or two for a better rate

This way I think I can get some of the savings I was looking for indirectly.