Financial opinion, what's yours?

Ok, I am at most 3 grand in debt. I have a steady job and make my monthly payments but I want a much quicker way of getting out of debt. I came up with an idea let me know your opinions.

I have a 2000 ford focus in good conditions but needs new shock absorbers. I want to sell it for 2k so that I can clear two of my cards and only owe 650 dollars or so on the third card. My living expenses are fairly cheap and I can manage them fairly well living on my own. If I sell my car I will need to buy another car, the scion tc is the car I want, so that I can get to and from work and get around when I need. The payments would be around 500 a month. If all goes my way when I finance the vehicle I will ask to have the option to not make any payments for 3 months or 4 so that I can pay off the third CC before I begin making payment on the car.

What would be some financial advice on how to pay off my debt besides just paying the cards completely as I dont have the money to one shot deal them.

The APR on my cards are low one is at 7.99 the other is at 9%.

The 500 monthly payment includes insurance. It will be 348 for the car and about 189 for insurance. Just a little over 500 a month.

Why pay off $3,000 in debt in order to go into $20,000 or more, in debt for a car? I make a fairly good living and both my car payments together are less than $500 per month. It sounds to me that buying the Scion, is your goal not getting out of debt.
My opinion is to make higher payments on the $3,000 and drive your current car. If you made $500 per month payments on the $3,000 it would be paid off in no time and then you could sell the focus for $2,000 and put a significant down payment on a less expensive used car, and start investing money and getting interest instead of paying interest.
Remember 鈥淚nterest never sleeps nor sickens nor dies; it never goes to the hospital; it works on Sundays and holidays; it never takes a vacation. 鈥?Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away from it; you cannot dismiss it; it yields neither to entreaties, demands, or orders; and whenever you get in its way or cross its course or fail to meet its demands, it crushes you.鈥? J. Ruben Clark

I would recommend that you get the book "Total Money Makeover" by Dave Ramsey. What about getting a part time job to pay off the debt?

You don't get out of debt by buying a new car and getting into $500 a month car payment. $500 a month for a Scion sounds a little high too. You must be financing the entire thing. This is dumb. Fix the shocks on the Focus and continue to make payments on the credit cards. Or, buy a used car at a place like CarMax. You can get a like new Scion there for thousands less than new. Live within your means or you will be struggling with debt for the rest of your life.

You're not going to like this but my advice is not to sell your car and get a new one. If your car runs good, the depreciation doesnt matter to you. However, if you sell it and use the money to pay off your credit cards, youll free yourself of that interest. However, in buying a new car youll get socked with depreciation the second that you drive off the lot, and youll be paying interest on a car loan that's worth more than the value of the car. It is possible to contact your credit card companies and negotiate if the rate you are paying is outragious. Otherwise, live cheap, pay them off as soon as you can, then worry about buying a new car(or slightly used preferably)

How do you know you need shock absorbers?
I've had guys at gas stations try to sell me shock absorbers when I didn't really need them.

I would keep the Ford and try to pay off your debt,,,,then start a systematic savings plan so that if you want another car in the future you could possibly pay cash for it.....which would put more money in your pocket because you'd no longer be paying any interest.

Your plan is not a good one, I'm afraid.

Buying a new vehicle will put you further in debt and further away from your goal of getting out of debt. Here is what you need to do instead:

(1) Drive that Ford Focus until it falls apart. It's only worth $2000 now, but if you drive it for 50,000 more miles, it'll still be worth $1000 and you'll have only lost $1000 in depreciation. You might need to put a few thousand dollars into it for repairs and maintenance, but compare this with the depreciation on the Scion for its first 50k miles -- it'll lose half of its value, plus you'll pay higher insurance premiums, plus you'll be paying interest on your car loan. Booo!!!

(2) Pay off the credit card debt ASAP. The only way to lose weight is some combination of eating less and exercising more. Similarly, the only way to pay off debt is some combination of spending less and earning more. Figure out a way to live your life on $100 or $200 less per month -- I guarantee that you have neighbors around you who do it right now. Put that extra money directly onto the CC debt and it'll be gone in two years.

(3) Continue saving that money after the CC is paid off. If you get a raise at work, continue living at the same level you are now and automatically invest the increase. Save money for a new car purchase, since your Focus is getting older.

(4) Four or five years from now, your Ford will have 120k miles or so and might not last much longer (if it can great!). But by then, you've saved up cash and can buy the Scion outright, rather than financing it and paying 1.5x the price.

(5) Don't buy a brand-new car -- they're rip-offs. Find a three-year old car with 30k miles or so -- they're 70% the price and your insurance will only be 70% as much (if that). If it's a reliable make, then you can still count on 100k+ miles from the car. I bought a 1997 Honda Accord in 2000 with 30k miles and it's still going strong at 104k miles -- it cost me $12.5k instead of $17k.

Good luck to you. Don't be influenced by the advertising that says you MUST have a new car NOW. Your Ford still works, so you should still drive it.

Doug