Should I Continue to Make Payments on My Car Loan, or Trade it in Now?

Hi Tony -

I have a question for ya . . . I have a 2002 VW Beetle that is not in any good shape at all - it's been in an accident, and I have a dog so I trashed it a bit. Anyhow --it's almost paid off -I owe about 10 more payments on the car loan. Anyway - I'd like another car - I can afford the same amount in car payments a month . . . I'm wondering if I should trade my car into the car dealer where I got it and get a new one, or wait the 10 months to try that? Also, I paid my car payments all on time - but otherwise don't have great credit. Do I have any options here?

Tina

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Hi Tina,

It's always better to pay off a vehicle completely before you sell it or trade it. That way whatever you get for it will go towards the new vehicle rather than paying off the old car loan. In fact, the ideal thing is to drive the car for a while after the car loan is paid off. Instead of making a car payment every month you get to save a few bucks each month.

After all, the car is only 6 years old. That's not so bad. Of course, that all depends on the condition of the car. If it is reliable and runs good I would consider keeping it for a while longer. Also, whenever you decide to buy another car you will get more for your car by selling it privately as opposed to trading it.

As far as your credit goes, as long as you make all your payments on time the bank where your loan is now should give you a new loan.

All my very best and may God bless you richly. . .

Tony Iorio
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