I too have followed the Dave Ramsey Baby steps and am currently on step 4. I'd say you've already made a wise suggestion. Follow your instincts.

I don't think there's any problem with being in debt as long as you don't keep borrowing and increasing your debt. The problem with old cheap cars is that they might have high maintenance costs and aren't as reliable. So I would consider the condition of your current vehicle before dumping it for a cheap one. Also how much did your car originally cost? How much was the original loan amount? And how much have you paid total?

The problem with new cars is they are way to expensive, depreciate 40% in 4 years and often times have lots of problems and insurance rates are very high. I had an old Toyota Camry 99' when I was getting out of debt that I got for free and I ran it basically into the ground with 230K miles. I barely put more than $500 into it. Sure beats a $470 car payment for the new smell. Last year because I had no debt, I saved up $10000 and bought a 2007 Mitsubishi with 49k miles on it and warranty and paid cash. Six months later I am happy as can be with it and have no car payments.

Technically, Dave would tell you to hold on to the car if you wanted to. You don't state your income, but I'm sure it's above 17K. Dave says as long as the vehicles aren't more than half your income and you're paying your debt off in less then two years your OK. But I can also relate to your intensity. I doubt you'll have 3-4 thousand dollars in problems with 2.5K car, but it is possible. If you know what you have is in good shape you're probably better off working it a few more years.

One thing to consider is refocus your intensity on increasing your income and paying this debt off even sooner. There are a lot of opportunities for a person focused on a goal!

God Bless!

I've found that owning a cheap car seems to always outweigh a payment. if you ever had to stop working for what ever reason the maintenance costs go way down but a payment and high insurance payment doesnt go away because you stop working

I like to keep it simple

sell the car, buy a project chevelle, drive it slow and baby it on gas. pocket the cash.

US economy is a consumer driven economy which heavily relies on debt. If you want to live debt free, its almost impossible unless you want to isolate yourself from the rest in every way possible.

Even rich people have debt...mostly business debt for their business loans but they know how to make sure that debt doesn't mix with their personal.

I guess my point is that, you don't have to make HUGE sacrifices....just make sure the debt is under control (e.g. dont borrow to buy things you dont need and stay away from unsecured debt as much as possible)
You don't owe a lot on your car...just pay it off in timely manner and save up rest of your money for the rainy day.

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I don't like to be in debt myself..the sooner you can get rid of the better it would be

dont sell....