Trade in upgrade

Sorry, I missed the fact that you were saying that it was $25 more a month (equal to $1500), not $1500 down and 25 more a month which is what I believe jhinsc said. I meant in addition to the $25 more a month (equal to $1500 over 60 payments), the OP has to pay an additional 2 years more than what is currently left on the loan.

I usually agree, but the fact that OP is trading for same trim of the same model makes me think it is, unless the current one is a lemon or color is really really bad or something.

 

Those offers are computer generated, they just change the part where it fills in your name and car model. It's just another scheme to get bodies on the lot.

If you have a passionate desire to get yourself a 2014, I can understand and will suggest you just skip the rest of this post. If it was me, I don't see any real difference between the 2012 and the 2014. A 2012 is only just getting properly broken in by now. I do see you paying at least $1,500 more and staying in debt two years longer in exchange for nothing really.

 

Amen brotha

 

Really? Loan principal balance is not 40% paid down 40% into the term, and 'equity' is undoubtedly under water.

 

2 years in the amount of your total payments you have already paid is 40%. My poor choice of words.

Getting to the point where you have no monthly payments that include an interest component is extremely liberating. And the way to get there is to live on less than you make and only assume minimum debt for essentials. I watched too many people trade-up and refinance multiple times. They still have debt into their 70s.

 

I appreciate your point on being debt-free and interest payment-free, but the fact is that point coincides with the very last payment you make, whether you are paying down a conventional or bullet loan.

 

Paying off the current vehicle, the point at which you have no payments occurs first and it is at a point where you still should have a reliable car. This in contrast to the dealer proposed deal where it occurs 2 years later. Turn it down and, at the point where the new deal would be over, you will have saved 2 years worth of payments. And depreciation will be less than that amount.

Dealers have their interests at heart, not yours.

 

As described, you have the 60 month financing on a new car, as opposed to 36 months remaining on a two year old car.

Three years from now you would have either a fully paid-for five year old car, having had no BTB warranty for two (or more, depending on when 36,000 miles was reached) years, or a three year old car whose BTB warranty just expired (again, assuming less than 36,000 miles).

The relative value of a $1500 to zero-time/miles upgrade may depend on your valuation of an additional two years of warranty, assuming your mileage was less than 12,000 per year. There is no absolute answer, given that failures and potential claims under warranty occur randomly, not at the assumed average rate used in the warranty cost/pricing calculation. Similarly, your reliability likely will differ from "average". We all hope it is on the "more" side, not the "less", but this isn't Lake Wobegone.