Do I pay off my auto loan?

[dgerdber]

Good afternoon,

So I thank you ahead of time for your advice. I am trying to become debt free but have a auto loan question. I will try not to make this into a book. 

So due to an alcohol addiction I lost my driving privilege for 6 years. Sober now for a long time. When it came time for me to drive i jumped at the first luxury car I found. Had low credit but got approved for a 2015 435i bmw grande coupe m sport at 19% interest. I know VERY stupid. But I signed my name on the dotted line. Car was priced at 27k. Paid 8k down. But after fees taxes and warranty price shot back up to around 27k. I've had the car for 3 years 4months now paying $550 a month car payment $300 for insurance every month. Not including engine repairs and gas. Car runs good now with 83k miles. Now here's my dilemma. I live in Florida and relocating to Seattle where public transportation is great. I currently owe 18k on the car. I have 14k saved . I can use that to pay the car down and probably have it paid off in 5 months after that but will have zero in savings.. Or I can sale the car back to them and pay the difference of about 9 k. And be done with it move on and lesson learned. My wife and I are planning to move out of country for a year in 2026. (We have a separate savings for that she will NOT let me touch). So that's also why this is so hard.

 If I sale car:

Cons-

-All the money I've paid in interest, car repairs, insurance and money put down and money paid for difference, I've lost and thrown out the window.

-wont have a car to get around. (Not really needed in Seattle)

Pros- warranty is gone ( didn't cover much anyhow). I won't have to worry about costly repairs WHEN something goes wrong. 

-wont have to drive it from Florida to Washington taking a risk of something happening.

-wont have insurance monthly payments (which Will jump to around $480 in Seattle with no tickets or accidents over 10 years).crazy! 

-Will avoid the19% interest on remaining balance until paid off.

-I will be close to being debt free.

- won't have to pay for parking (around $250 a month in Seattle where I will be living).

-can dump a lot of my money into my debt and be free of debt by 2027. 

-wont have to worry about storage while traveling abroad and still paying the insurance.

If I keep the car: 

Pros- have something to show for all the spent money 

- will be able to site see more places with my wife in Washington. (Not needed for work) 

-can possibly sale it for more privately.

-will have a paid off car

Cons: pretty much all in pros if I sale it.

Oh and yes depreciation on a BMW is a MF!

Thank you for your advice. I know from what I wrote it's probably easy to see the right path. It's just tough because what I have in savings plus a few months I can have the car paid off but will still have so many monthly bills.

[GZG]

if your credit is better now, try refinancing to get yourself out from under 19% that's killing any chance you have of saving any kind of money or getting out of debt. 

but ultimately, you know the right answer is to sell the car, you just don't want to do it.

sell the car, today.

pay off the loan today.

put yourself in a position where you can save another $5-10k for another car should you want or need one. 

[Creditwiser]

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@GZG wrote:

if your credit is better now, try refinancing to get yourself out from under 19% that's killing any chance you have of saving any kind of money or getting out of debt. 

but ultimately, you know the right answer is to sell the car, you just don't want to do it.

sell the car, today.

pay off the loan today.

put yourself in a position where you can save another $5-10k for another car should you want or need one. 

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This !

[dgerdber]

You nailed it! Thank you. Your right I know I should but don't want to. My credit is about a 620 so had no luck on getting a better rate except for the scam artists who want to extend the loan longer but have lower payments. Def not gonna do that. But thank you so much for your response. I truly do appreciate it a lot 

[Patient957]

@dgerdber 

Saving the $480/mo on insurance is itself a good enough reason to sell, IMO.  Let alone all the other good reasons.

Since you have enough cash to easily cover the under water amount, I would consider a private sale rather than selling back to the stealership.  You'll likely get more money for it in a private sale, so it might be worth the extra effort.

[FicoMike0]

You re paying $850 a month to drive a 10 year old car that you owe $18k on? I think you should sale the car and then sale off to seattle. Then, in 2026, you can sale out of the country and travel with a broad. Does your wife know about the broad?

[FlaDude]

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@dgerdber wrote:

Cons-

-All the money I've paid in interest, car repairs, insurance and money put down and money paid for difference, I've lost and thrown out the window.

This is known as the Sunk Cost Fallacy.

[jcar]

My advice would be to sell the car. I understand you may have a hard time with choosing this option because of how much you've paid through this point but it's not really much different when you lease a car either. Treat it as if it were a lease and move on. 

You've no doubt gained some valuable experience from this which will help you in the future. 

[BudC2]

With all due respect, it sounds like you are looking to others to convince you to not get rid of the car.  How much more money are you willing to throw away by stalling on selling the car? I know this sounds harsh, but think about what you could save each month by not dragging your feet. You know the current cost, but what about the future cost? Can you do without a car right now? If so, set yourself up for a solid future and a solid credit rebuild. I don't know how old you are, but I'm sure you have a decent amount of time to set yourself up for a comfortable retirement if you buckle down and make good decisions now. It's never too early to think about making sure you don't struggle later in life and making sure you don't put the burden of survival on your spouse. Guilt trip, I know. But you have a responsibility to more than just yourself and if you have minor children... You've already made a great decision on kicking the alcohol aside, now keep up the good history with more good decisions and with putting your home relationships first.