Trading in car early likely to cost you
Sunday, July 20th, 2008Dear Terry,
I am currently in Iraq serving with the Air Force, but will return in January with $10,000 in my savings account. I owe $13,000 at 5.6 percent interest on a car that is worth $9,000. I desperately would like to get into a home when I return.
Should I continue making payments on the auto loan and pay it off before saving a down payment for a home? Or should I sell the car and “eat” the upside-down amount, using the remainder to start my house fund and try to get into a car at a better ratio?
— Paul Bond
Dear Paul,
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