Short term gains are not your friend.

What will the Sentra be worth in 2 years, 5 years?

You should look farther in your financial decisions. Monthly payment is not where it all ends...

 

The Sentra will be worth more than I owe for the duration of the loan. Due to the down payment I was able to put down with the equity from the HCH, even right now, with the instant used car depreciation, it's worth more than I owe.

As to 'short term gains'. Do you think it is wise to keep a vehicle that is overpriced for your budget? How should I magically come up with the $500 a month for child care? Why, I should charge it! Yes, charge the $200 we can't afford right now and rack up thousands of dollars in debt! Or, wait, maybe the fact that I'll have an extra $6,800 over the next 3 years is a good thing for my family. Oh...and the car will be in warranty, so I don't have to worry about major repairs now. Both my wife and I work within 10 miles of our home, and we do not travel all that often. It is not financially sound to pay a premium price for a car that's ONLY advantage is the extra fuel economy, when a difference in fuel economy doesn't matter to the wallet. (Let's face it, it's not like the Sentra is a gas hog.) Oh, the big number: I now owe significantly less for my brand new car than I had remaining on the HCH, which means that if I got a raise and wanted to pay off the loan early, I could do so at the same time the HCH would have been paid off, but for less money, so that if I needed to, I can STILL have no car payment in 3 years, but the total cost to me would be less. Sure, at that stage, I'd need to shell out the extra $20 in gas per month, though my insurance has dropped by $10 a month with the new car, so it's really only $10. I think I can stomach that long term.

Now, if your point was "in 5 years the HCH will be worth more than the Sentra." Well, no crap. It should be, it cost $7,500 more. That's like saying "You know that $100 lamp will be worth more in 5 years than the $30 lamp." It doesn't really matter much if I can't afford the $100 lamp.

The fact is, the hybrid has been doing NOTHING for me financially for the past six months. The HCH is a wonderful car, but it is woefully overpriced if you only drive 450 miles a month. If you drive a lot, it's worth the extra money, but I don't only gain the extra $190 every single month...I gain a larger cabin, significantly larger trunk, with fold down capability (immensely important now that I'm hauling tons of baby stuff), and (dare I say it), it's more fun to drive.

 

Holden!?!?1 pleeeazze! why would i want to drive such crap! give me a honda or toyota any day!

 

I have to agree with you there. Isn't Holden the Australian version of Ford? I'd also take Honda or Toyota over anything from Detroit.

 

i thought both Ford and Holden are USA companies!

 

interesting discussion,

jordan, let me tell you what i would have done in your situation (just in case I understood everything written by you correctly).

1. would have sold the 06 HCH

2. would have been paying off all debt left on the car (all this of course only works if you have not been upside down, e.g. more in debt than the cars sells for)

3. would have looked for a car that i can pay cash, so no more debts are taken.

4. is mileage of any significance at 450 mi/month?

5. what about biking sometimes to work (10 mi I read) or a scooter

best wishes

 

Everyone makes their own decisions based on their unique circumstances. I know that with the state and federal tax credits in effect when I bought my HCH II that it made perfect sence, good fuel economy for no more than a regular Honda Civic.