Keeping Existing Vehicle for School

[PistolPete3]

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Hi all,

Thank you in advance for the advice and help. I am a non-traditional applicant having worked as an engineer for the last two years. When I started working I was without a vehicle and ended up purchasing a 2012 Toyota Tacoma. I got a great deal and now owe only about ~17,000 and the KBB is around 26-28k.

I love the truck and use it frequently, but I am having serious misgivings about keeping it. Ultimately, I will be using student loans to make payments on a depreciating asset - seems like a bad idea to me. On the other hand the four wheel drive and reliability will be great assets going to school in Vermont.

I am really on the fence about whether to keep it. If I could get ~8k in equity out of the truck I could get a decent used vehicle. On the other hand, I have enough in savings to pay off the truck, but that money could always be put towards cost of living to reduce my debt burden.

Any thoughts? I am leaning towards selling it, but I do not want to deal with the hassle of selling it and finding a new vehicle.

 

[TexasPhysician]

Buying and selling vehicles also includes tax implications and unknown risk when purchasing a used vehicle. If it were me, I'd stay put with the current vehicle. No sense missing classes/tests due to an unreliable car.

 

[RangerBob]

Buying and selling vehicles also includes tax implications and unknown risk when purchasing a used vehicle. If it were me, I'd stay put with the current vehicle. No sense missing classes/tests due to an unreliable car.

I agree. Tacomas (and Toyoatas in general) are known for their reliability. $17k is a lot to owe, but consider that you want a car that will last you through residency--7+ years at least. I'm guessing you bought your truck new, so you should still have warranty coverage, etc., which will save you costs of repairs you'd have to pay for a used car. So I don't think you'd save enough for it to be worth it when you take into account how much a reliable used car will cost (probably $8,000-$12,000), the cost of repairs over the next 7 years, and all the taxes/etc. I'd imagine you'd still come out ahead if you trade in with all that factored in (unless the replacement car dies on you...), but I don't know if it'd be worth the headache--you might as well keep the car you know and that you know you can trust for years to come.