Should I trade my car or keep it?
So I'm trying to figure out my finances. I currently have a 2017 Ford Escape S. I don't really like it and i bought new it in a hurry 2.5 years ago. There's nothing wrong with the car at all it's just boring and I want a car that has more features. The positive is I could pay this car off within the next year as I only owe $9000 on my loan. But a new car is so tempting because of things like a sunroof, leather seats, Apple CarPlay ect. And the Escape isn't under water value wise and I'm making a lot more money versus 2 years ago. I probably should keep the car right?
Do you own (with mortgage) any real estate (or substantial savings in mutual fund another asset that appreciates), have you maxed out your 401k contributions the last 2 years? Do you have enough in liquid assets to hold you for 6 months if you need to find a new job?
If you answer no to any of the above - keep the Escape until you can say yes to all of the above.
Keep the car and save some money. When it is paid off, look for the car you want and maybe pay cash with the trade in.
Buy what you can afford to pay for. All those fancy whistles and bells won't do you any good if you can't make the monthly payments. Also, your cost for insurance will go up on a newer car.
Trading it would result in a loss of value to the tune of $3000-4500. (Because of the huge wholesale to retail spreads)
The smart move is to keep what you have, pay it off and drive it until its value is under $4000. Then, when you upgrade, sell the car on your own rather than trading it.
You can't easily sell cars over $4000 on your own.
The video below can show you how much not buying a new car can save you in the long run if you keep paying yourself and investing the car payment.
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