Saturn Relay vs Toyota Camry - Negative Equity and Gas Prices - What Should I do?

Question

I have a Saturn Relay that I have had constant trouble with. I have 4 years left of payments at $371 a month. This van gets 15 MPG and is currently not under warranty. The value of the van is about $8,000. When the loan is done I will have a van worth around $2,000. By my calculations - this is the only time (4 years) where what I owe would catch up to what the car is worth.

A Toyota dealer is offering a 2009 Camry at $530 a month. The Camry gets 30 MPG. It would be a 6 year term - and the car would be under warranty. By my calculations - I would owe what the car is worth in 3 years - but I would obviously have a longer payment term.

Should I do this? The difference in gas ($100 a month) should cover most of the difference in payment anyway.

Answer 1

I think you should buy a USED car from a dealership. Can you afford a $35,000 car. Or can you afford a $5000 chevy cavalier or something like that?

Answer 2

I would do it.  I traded my impala in for a corrola which I regret because I signed for 19% intrest rate.  So as long as your rate is good then I say go for it.  

Answer 3

As long as you plan on keeping the Camry for the length of the new loan, then "maybe". By my calculations, you are way upside-down in the Relay, and the dealer is adding that negative equity to the Camry. So, without even driving off the lot, you're thousands of dollars in the hole on the Camry itself.

The car would be under warranty the whole 6 years? Not unless they tacked on an extended warranty to the deal. Make sure you understand everything on the deal before signing. Keep in mind, 72 payments of $530 a month is well over $35,000. No Camry brings that much money new unless it has every option known to man.

All of this is contingent upon the bank overallowing quite a bit on the new car. Might not happen.