In some ways this was an easy process and in other ways, well it was hard. Become a Complete Fool
I've traded in the Avalanche. I pick up my new car tomorrow at 6:00 PM. It is being driven up from Oregon as we speak and financially, I'm winning across the board, and hit all of my goals, sans one - total debt - but I'm in a great positive equity situation.
I've purchased a 2005 Pontiac Grand Prix GT. I had an SPO Certificate from General Motors, which gives me about 1% below invoice on any GM vehicle - supplier discount.
Despite the supplier discount I was a millimeter away from getting a Mazda 6i 5 door. So what tipped the scales? Well Mazda would only give me 8.95% on a 60-month loan. That's not HORRIBLE, and considering a mid-score of 584 actually pretty darn good in my case. I'd get $1,000 rebate on the car. They offered me $16K in trade, which I felt was fair - but I did better in the next scenario and when I checked with my insurance company I was shocked to find out that even the 4-cylinder Mazda 6i is classified as a sports car, my insurance rates would jump almost $50 a month. Did not anticipate this in the mix.
On the Pontiac Grand Prix GT I'm getting 1% interest. Yes, the bizarre rate of 1.0%. My total finance charges, for the life of the loan, are $572 and change. I got the SPO pricing, a $1,000 bonus cash rebate, and because this is the same dealer where I bought my Avalanche, they are doing the paperwork to get me the credit on my ESP for another $400. They offered me $17,500 trade-in on my Avalanche. A check with the insurance company has the somewhat less safe (the Mazda 6i with side air bags did great in the IIHS crash tests), more horsepower, Grand Prix rated as a passenger car and insurance is on parity with my truck. My overall payments are lower than the far less equipped Mazda and less than my Avalanche. I get 30 MPG and between SPO, rebates, ESP refund, and equity, I have almost $10K equity over sticker on the Pontiac - versus about $6K on the Mazda.
So I go from $396 a month to $366 a month. My fuel bill will be cut in half, my insurance rate will stay the same. At current gasoline prices this puts about another $255 a month in my pocket - and I have a car that is fun to drive, seats the family comfortably, fits the budget, and is far more practical/pragmatic for commuting back and forth to work versus my 6,000 pound 15 MPG 19 foot long Chevy truck.
I have some misgivings on the long-term quality of the Pontiac, specifically on accessories pieces. The GM 3.8 V-6 III and 4 speed tranny is legendary for quality and performance, and the Grand Prix "wide track" chassis has been around for over 10 years - tweaked just two years ago. I have more faith in the Mazda and little touches, coin holders padded so you don't hear ching ching ching as you go down the road, single piece dashboard for better interior construction, dampened actuators, things that are missing on the Pontiac; but 8.95% and $1,500 less in trade, and another $50 a month were huge barriers. The Mazda's payment would be higher than my Avalanche, and over $5,500 in the life of the loan interest. OUCH. As a matter of fact when you added in the interest, over the life of the loan I was paying more for the lower priced Mazda - that just did not make sense.
So what did I compromise on? Well my total amount financed. I wanted to keep close to the $12K I owe on the Avalanche (and teased the dealer when they offered me $17.5K trade they could give me a base Aveo and call it a day) I'm financing a hair more than $8K then I owe to date on the Avalanche. But all other numbers add up - just means I'm on the car payment treadmill a bit longer - AHHHH - but when I'm done snowballing my credit card debt and finish on the medical debt/lawyer - harfing up the $1,200ish a month on all of that will be old hat - slam it into the Pontiac if the payment is bothering me - but 1% interest is basically free money and I'm starting to see the light a the end of my debt tunnel.
I just felt this makes sense short, medium and long term. The only way I "loose" is if gasoline goes back to $1.35 a gallon - then I'd been better off keeping the Avalanche, but I'm betting it won't ever go there again. My family, and my very Foolish sister is supportive of the move, and understanding that the smaller Mazda 3 and Chevy Cobalt just do not have the passenger room for the family and the volume of driving we do.
My son hasn't seen it yet, he's in Texas with grandma but she reports he is angry at me for trading in the truck. Christi my daughter is up here and is very sad. She even said, "bye bye truck, maybe I'll see you again," and I thought she was going to cry. Amazing how kids get attached to things - I know they both have GREAT memories in the truck - but we'll build new ones in the Pontiac and my oldest will appreciate learning to drive in a reasonably powered and sized car - imagine learning to parallel park in a 19' long truck with the worst documented rear visibility of any vehicle on the road...
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In some ways this was an easy process and in other ways, well it was hard.
Become a Complete Fool