Car loan

[Malibu406]

Hello,

I would like some opinions on a car loan situation. My wife and I each have a car. Car A has $6,700 left on the loan, with rough value being $4,000. Car B has roughly 10,800 left on loan, and rough value is $6,000. We are both looking at getting a new car soon. Should we trade in both cars in on one new one? Will this help offset the overhead from the high loan from Car B ? Or just trade in each car for each new one ? I know the salesman will have opinions for us, but I wanted to see what people say before I hear what he says.

Thanks

 

[Mirage]

Well, if you get two cars instead of one, I am assuming you'll pay less per car, which means there will be less room for the cars to depreciate in "new" value once bought. It seems that with cars, the more expensive it is to start, the quicker it drops in value once it hits the rubber hits the road. If you can get by with one car, perhaps you should do that, but maybe you are best off selling on of your current cars and keeping the other?

Here's why. You say you can get about $10,000 or so if you sell both cars. However, you OWE approximately $18,000 before selling these two cars. Even if you sell and put the $10,000 towards paying them off, you will be left owing $8,000 and now looking at at least one NEW car payment on top of that.

How old are your current cars, and are you looking to buy NEW cars to replace them or used car(s)? That would make a big difference on how your options should be weighed.