Dave Ramsey says: Sell old car, put money toward buying replacement
I’m driving a 12-year-old car with 210,000 miles on it.
The car needs close to $2,000 in repairs, and it’s worth $5,000. I have $40,000 in cash saved, $40,000 in investments, and I make $80,000 a year.
I also have $15,000 in student loan debt, but the only other thing I owe on is my house.
Should I pay to repair the car, or buy something else in the $15,000 price range?
Let’s see, if you wrote a $15,000 check for a newer car and wrote a $15,000 check for the student loans, it would leave you with $10,000.
I wouldn’t buy a $15,000 car in your situation. I’d buy a $10,000 car.
You could probably sell the old one for around $3,000 if it needs repairs. Combine that with your money and get a $13,000 car. Then, you could write a check and pay off the student loan debt.
With no car payment, no student loan payment, and a good car, you can really lean into your budget and saving money.
You’d have no debt except your home, and you could rebuild your savings in a hurry. You’d be in really good financial shape in about six months. Plus, you’d have $15,000 in the bank in the meantime!