Article from Fox Business:
Dear Dr. Don,
I am in the market for a new vehicle. My current vehicle is a 2001 with 205,000 miles. It needs a ton of work that is going to cost several thousand dollars, but it drives just fine. My child will be getting a driver’s license within the next six months, and I am beginning a job with an hour commute. I’m considering purchasing a car for $ 12,000 or less that gets good gas mileage and handing that car over to my child when he gets his driver’s license.
The catch is that I took out a loan against my current car and still owe $ 3,000 although the car is valued at $ 6,000. I was planning to keep my car so that I will have one when I turn over the other to my child. Later on, I will buy myself another car.
Is it a good idea to keep my current car and purchase another car, knowing my current car has mechanical issues and is a gas guzzler? If I purchase another vehicle and keep mine, I will have two payments. My salary can afford it, but does it make sense? Or should I trade mine in, have one car payment and when it’s time, look for another car for me?
– Trevor Transport