subject: Get Out Of Debt: Eliminate Your Car Payment Today [print this page] Is your car payment making you poor? Sure, you might drive an economical model while other people at your office drive much more expensive cars. But your car could still be too much car for you. In fact, car payments are what send most families over the edge, financially speaking. One car payment is often enough to do the trick, but most families have 2 car payments. Some families are even making 3 car payments!
To live comfortably, you should spend no more than 38% of your bring home pay on debt payments. Debt payments include housing, loans, credit cards and auto payments. If you only make $2,000 a month, your debt payments should be no more than $760. If your mortgage payment is $500 and you only have one credit card at $50 a month, you can only afford a $210 car payment. If you have more bills, you can afford even less.
If your numbers exceed your budget, you need to get out of debt by eliminating your car payment today. There are several ways to get rid of your payment as outlined below:
* Pay It off ??" I'm going to assume that you don't have the money to pay off your car since you probably would have already done so if you had the leftover cash. So, let's look at some other ways that you can pay off your car completely. Auto loans usually have high interest rates. Try to combine your auto loan into a low-interest debt consolidation loan or tack it onto your mortgage. You can even borrow the money from a family member and avoid paying expensive interest.
* Sell It ??" You might be able to sell your vehicle outright and have enough left over to purchase another one. This is especially true if you have had your car for a while. Keep in mind that you will have to downgrade. If you have a high-end truck or SUV, you may have to purchase a small compact car. The upside is that it will be yours.
* Trade It In - If you can afford a smaller car payment, you can trade your car in at a dealership. Sure, they will try to get you to buy something more than you can afford, but you don't have to take the bait. Trade down. As long as you get enough for your current car to pay it off, you will be fine.
Debt payments such as car and credit card payments are causing a great deal of financial hardship for families. If you are feeling the crunch, it is time that you do something to get out of debt. Getting rid of your car payment is a great place to start. Eliminating one car payment could save your family $300 or more a month. If you have two car payments, you could save even more.
