Made a mistake on car loan, help!

[Anonymous]

I made a bit of a mistake a couple of years ago with my new car purchase.

I was making $42,000/year at the time and I purchased a car at $39K. EEK!! It was somewhat fine at the time since I was not paying rent where I lived.

Fast forward two years later. I'm about to get married and we are looking to purchase our first home. These $550/mo payments along with $125/mo insurance for a luxury car PLUS maintenance costs are eating our budget alive! Especially considering I do have around $400/mo in payments on student loans. Luckily my SO has no debt or we would be in huge trouble!

I feel like I really need to make this right prior to us investing in a house. Housing prices in our area are skyrocketing, and will continue to as we have large companies (ie: Toyota) moving their headquarters right into our neighborhood. We want to capitalize and get in our starter home soon and I really prioritize that over any depreciating asset like a car. Our current place of residence is very small - around 600 sq feet that the two of us are living in. We really need a larger place, mostly for our sanity.

I need to understand what my options are. I have a 2012 Infiniti EX35 right now - journey package, all of the bells and whistles (ie: navigation package). I owe roughly $24,900.00 on the car right now. The loan is $550/mo on a 6 year term total at 5% rate - I have approximately 4 years left. 

I've looked at possibly downgrading my car a bit. I've been looking at more simplistic cars with increased gas mileage (ie: Toyota Prius, Camry, etc.). Would it be a good idea to downgrade or am I going to find myself in even bigger trouble? My goal is to try and lower this payment without substantially increasing my out of pocket costs. I know the $700+ we are spending on my car each month is going to be rough. I make more money now (approx 150K total income between the two of us), but since I work in sales I generally budget everything with our base income (90K) and with our base salaries - this is going to be really tight when we actually have to pay a mortgage/rent payment.

ps: current credit score is about 725 and I am 25 years old.

[pizzadude]

Welcome to the forums !

I think you'd be ok if you decide to sell your car, at least you're fairly close, maybe 2K less, depending on the condition of the vehicle and mileage.   I'd recommend going to Carmax or a similar place, to get an idea what they'd offer you for it.  Then you can decide if you want to sell it then, or look for more money via a private party sale.  You want to be in a situation where you don't have to bring a lot of money to the table.  

[StartingOver10]

Agree with Pizzadude above.

Get rid of the car and the debt before you go shopping for another vehicle. The Carmax quote lasts for 7 days so you can see if selling it yourself is worth the time and trouble. It sometimes is worth the difference to do it yourself. With the vehicle you have, I bet it would be worth it to sell it yourself if the Carmax quote is too low depending upon your work schedule. FYI, don't fall for the old trick of someone wanting to 'lease' your vehicle.Those are usually scams. Selling it outright is what you want to do to safeguard your credit.

You can then get a much less expensive vehicle without adding the negative equity to the new purchase.