I was 18 when I bought this car, and yeah… probably wasn’t my best decision. It’s a 2017 Subaru Forester with a rebuilt title. Paid $14,000 for it in 2022.
I’m paying $294.72 per month at 7.74% interest. The problem is, since this year started, it’s been nothing but one repair after another. Now it needs a new transmission, and I’ve already spent thousands keeping it running. I got a few quotes, and fixing everything would cost between $5,000-$6,000.
The car still runs, but there are warning lights on the dash. I got a refinance offer for $240 per month at 7.69% interest, but I’m wondering if it even makes sense to refinance when I might be better off just trading it in.
Would you try to keep it, or is it time to let go?
Refinancing just to save 50 bucks a month doesn’t seem worth it, especially if it extends your loan term. Trading it in and rolling the negative equity into something more reliable might be a better move.
Car loans front-load interest, meaning most of what you pay in the early months goes to interest, not the actual loan balance. If you’ve been paying for a while, refinancing might not make sense because you’ve already paid a big chunk of the interest.
If you’re early into the loan, refinancing could help, but otherwise, you’re better off putting that money into a more reliable car. You can check amortization calculators online to see how much interest you’ve already covered.
That refinance offer sounds like it’s stretching the loan term longer. Without knowing how many months it adds, it’s hard to say if it’s actually saving you money. My guess is that it’s not.
Subarus can be solid cars, but this one seems like a money pit. How many miles are on it? How much do you owe? If you’re already underwater on the loan, it might not be worth fixing.
Caden said:
Subarus can be solid cars, but this one seems like a money pit. How many miles are on it? How much do you owe? If you’re already underwater on the loan, it might not be worth fixing.
It has 125,000 miles on it, and I drive about 700 miles a month. I still owe $9,700.
@Luca
Buying a salvage title isn’t always bad, but in this case, with the transmission failing, it’s tough. If it were in good shape, it’d probably be worth $10-12k, but with the rebuilt title and transmission issues, maybe $5-6k.
Your options:
Be upfront about the issues and sell it for a few grand.
Trade it in, but expect to get low offers since it has a rebuilt title.
If you want to be sneaky, have a mechanic clear the dash lights and sell it privately… but you’d have to live with that decision.
Bite the bullet and replace the transmission if you plan to keep it long-term.
Personally, I’d take it to a dealer, see what they’d offer for a trade-in, and decide from there.
You didn’t make a dumb decision—just an expensive one. The car itself isn’t the worst, but a rebuilt title plus major repairs is rough.
The big question: Do you think this car will last a few more years if you fix it? If so, fixing it could be cheaper than replacing it. But if you think another major repair is coming soon, it’s probably time to cut your losses.
If you trade it in, you’ll likely roll negative equity into a new loan, which could put you in a worse spot financially. But if fixing it means constantly dumping money into it, that’s not a great option either.
You’ll have to do some number crunching to figure out which one stings less in the long run.
If you refinance, you’re basically starting a new loan from scratch. That could end up costing you more in the long run. Trading it in for something newer with a warranty might be the smarter move.
If refinancing lowers your payment but extends the loan, you’re still paying more over time. Trading in might be the better option, depending on what the dealer offers you.