Car Debate

Here's a question I've asked the community at NetworthIQ.com that I've received some pretty good feedback on and was wondering if anyone here had anymore insight into it.

Question

Here's the situation I'm currently dealing with a truck that I still owe $7700 at 24% interest. It's killing me in gas consumption, do I look at something more efficient considering my commute to work is 80 clicks round trip (approx. 50 miles)? Unfortunately my credit score is still a bleak 603 so I'm not going to get a better rate than 24% but then I would be refinancing the $7700 plus the cost of another car! Considering what I hear people get as a trade in it won't change the situation much. Also currently I do have another interview for a place closer to home so my gas consumption wouldn't be half of what it is if I would get this job. So the question is do I keep the truck or look at something more economical?
Posted by workingcanuck

Answers

I would sell the truck, and buy a car/truck that you can pay for with cash. Owing any money on a car/truck is against my financial approach. I'd rather pay cash for a modest used car and be debt free. Its tough at first, but over time, if you pay yourself what would have been your car payment -- in a few years you can move up to a nicer vehicle.

For 10 years, my secretary at work had a nicer, newer car while making less than 1/3 what I make. But, two years ago I bought a really clean, used BMW. And I paid cash.

Just my two cents.
Posted by: onavacationfaraway 8/5/2007 9:41:56 PM

How much is the truck worth?

If it is worth over $8000, sell it and buy some used with decent gas mileage. Up grade when you can afford it.

You might also consider car pooling if possible. My neighbor does it and it saves him a ton.
Posted by: Ksachef 8/7/2007 11:05:20 AM

Why not sell the car, pay down the debt, and get a used one with better gas mileage that's cheaper?
Posted by: rubyeeyz 8/7/2007 11:12:31 AM

Excuse my ignorance here as this is the first car I ever financed, but wouldn't there be a lien against the car from the finance company preventing me from selling it without paying them out first? I've always drove beater cars in the past loved them due to the low cost and amount of time I got out of them but when the last one went down the families thoughts were due to my commute I would be much better off getting something more reliable.
Posted by: workingcanuck 8/8/2007 8:28:00 AM

I should also note the blue book on the truck is about $6000 although I think I would be lucky if I could pull $5000 out of it due to 248,000 kilometers. Leaving a significant outstanding balance against the loan.

Also thank you for the comments so far.
Posted by: workingcanuck 8/8/2007 8:31:21 AM

So what's your thoughts on this?