Should I trade my car or no?

I'm at a good place in my life… Nice job and I live home with my parents I have a 2005 Ford Mustang that's paid for… But I work 7 days/ week so gas isn't great… I went to a dealership and it turns out I might trade it in to get a Honda Accord coupe… I have never had car payments before… What do you all think… Would it be a good investment? Help with my credit and also I would be getting a 2012… Trying to keep the payments between 200-250 but I'm a little scared…

If the only reason you want to trade is to get a vehicle with better gas mileage, does your gas cost more than the $250 payment on a new car? And remember the new car uses gas too. Doesn't sound like you have a real good reason to trade, assuming your Mustang is running well and giving you no problems.

A few thoughts.

Buying a car on credit isn't necessarily a bad thing, as long as you are sensible and careful about it. Some people make DUMB moves and it ends up costing them, don't make those same mistakes.

Now buying a newer, more reliable and economical car isn't silly. Your Mustang is 10 years old now. So upgrading to a 3 year old car makes some sense. Hopefully that will last another 7 years?

I don't think of cars as investments, they are more of a necessary cost. You plan on spending "x" per year, either in payments / depreciation / maintenance etc. Newer car, usually less maintenance, but higher payments.

Don't tell the dealer you want the lowest payments possible. He will write the loan up for the longest term (6 years?) The payments will seem less, but you pay a heap of interest over that time. I suggest you work out what you can afford to pay, and how much of a loan you can get with those payments over 3 years. That plus the trade value of your Mustang is how much car you can reasonably afford to buy.

You also don't have to get finance from the dealer. See what the dealer can offer, and also get a cash price. Then go and talk to you bank / credit union etc. Explain what that you want to buy a car, and can they arrange a loan? See what their deal is and shop around a bit.

Keep the mustang. Take your current gas bill, now take the same number of miles and figure the monthly gas usage for an Accord. Now add in the monthly payment. Not saving so much on gas are you? I wouldn't trade for gas… Ever. It never works out if your current car is paid for.

Instead, since you have a nice job, maybe its time to find your own place like a big boy. Grownups with good jobs shouldn't be content living off their parents.

Why ever take on debt if you don't have to?

Get rich instead.

http://www.daveramsey.com/blog/drive-free/