Does this make financial sense?

Ok, I am trying to cut down my monthly expenses.

Right now, I have a loan on a 2005 Civic Sedan that has a payment of $385/mnth. The loan is a 6yr loan and I made the mistake of rolling in a lot of negative equity.

Fast forward to now. We just had a baby and we will be putting them into daycare in the next month. I would like to see if I can drop that payment to closer to $200 a month.

Since I took out the loan, my credit score has increased by 100+ points, I've bought a house and have saved some cash.

Anyway, the loan has a payoff of $16k right now. I think I can get around $10k for trade-in on it. What I am thinking of doing is trading it, taking the $10k and paying off the negative equity.

I could really do with something bigger at this point. My Civic is great on gas, but I really need something larger. Does this make sense, or should I just stick with it?

Hello harrymay,i can understand your situation but......are you replacing the civic???if not ok but if you are whats that going to do to you?? i guess what i'm asking is this a finance problem or just a good move to get rid of neg. equity??
Mike

With gas prices being what they are, you might want to stick with that Civic. If you want, I'll trade you a Jeep for it. :evillol:

I agree, stick with the civic, fuel costs are only going up. Look into refinancing the car to lower your interest about 3 points. If your credit score is on average (675-723) you should have no problem at all.

A simple google search for vehicle refinancing will get you started.

Join a credit union and try to refinance through there.

You should just keep you Civic and refinance to lower you payments. I had a Civic before so I know what great gas mileage you get with them. If you trade to something bigger you probably won't be saving that much money if any at all when you take the extra gas into consideration.