Does it make financial sense for me to buy a car now?

Answers:0   |   LastUpdateAt:2012-11-05 21:50:03  

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marinda
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In may of 2010 I bought a Certified pre-owned 2007 BMW 328xi with 40k miles on it for $32k with no down payment.

Right now I owe $6886 on it exactly. My interest rate is high at 8.9% because in the last year I had bought a house, and ran up some credit card debt during the move, so combined with the house, the car and the credit cards it looked liked like I was doing rough with money and spending all the credit I could. My payment was $553.48 per month.

So, today I owe the 6.8k I mentioned and the car has 95k miles on it, 5,000 miles before the warranty is expired and I've had to have maintenance on it twice. Not routine maintenance. The oil valves were leaking once and the other time the battery cable to the fuse box had a faulty connection and melted the fuse box.

The parts on these repairs were $4,000, and BMW charges around $125 an hour for labor. So, if this thing breaks down, I cant afford a major repair like that.

The estimated trade in value is between $11k and $15k.

I found an Audi A4, certified pre-owned with 16k miles and I've talked them down to $26,500. My bank allows bi-weekly payments on auto loans, and I was approved for the loan for 3.49%. That makes my payment $230 a month for 60 months and I have a 6 year, 100k mile warranty

Option 1: Keep driving the BMW and have it paid off by the end of the year, saving $553 a month, but gambling on if it breaks down (and losing its worth, because I cant afford to repair it), but use that $553 to pay off debt and save some of it too

Option 2: go with the Audi and free up less cash per month, but still some and be covered.

thoughts?
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