Buy another car, or just refinance my 330ci?

[TMNT]

Hey Guys,

I'm coming to you all for more advice/recommendations on what I should do in this situation. Some of you might remember that I plan on purchasing a home in about a year and I am working on getting my finances in order.

I currently own an 04 330ci ZHP which I freaking LOVE. I bought it two years ago at a rate of 5.75% for 60 months. My payments are $516 a month and the car only has 59k miles on it.

Now when purchasing a house...you want you debt to income ratio to be really low so that you can get a higher loan amount (which I'll need all I can get in this area). So ideally I'd like to get a car in the $250-300 range.

Unfortunately, I've had NO LUCK finding another used decent, fun, sporty car in that price range. I've looked at mustangs, s2ks, GTIs, GLI, Mazada3, and even SUV's and I am just not happy with any of them. The ones I do like won't get me in that monthly price range..ie the GTI (great car).

I dont want to go econocar because quite frankly I love cars too much and would literally go insane driving around in a car that doesnt excite me. I'm sure you guys know all about that.

So now I'm thinking....maybe I should just refinance my car? For what I owe on the car, I could refinance it and get the monthly payments down to $300 a month..that way I can qualify for a higher morgage amount when it comes time to buy a house...and pay the car off in cash as I get commission statements within the 3 years I would have had left in the orginial car loan. I could also possibly get a lower interest rate, avoid sales tax, and a loss from trading it in...

What do you guys think? Yay/Nay?

[Blake]

hmmm, if it were me, i'd probably stick with the 330. buying a new car in advance of buying a home isn't a good idea. i would pay off the 330 the best you can, lower the debt/income ratio, and try to buy that house before a car. cars are inherently bad investments.

[1cleanm6]

i loved my zhp...keep it...

if u dont mind me asking

how many months and payoff..

[JB135i]

I would definately NOT refi a 5 year old car no matter what. No only will you have pissed away all the interest you have already paid, you will be doing it yet again with the new loan. Yes, your payments will be lower, but you may find yourself upside down (mid term) with an even older car.

I understand really liking a car, I miss my S2000 everyday, I wish I would have never traded it.

BUT you have stated your goals so let's get there!

I don't know your entire financial situation but with what you have said I would trade the 330 for something new you can at least tolerate for a couple years. Heres why I suggest new-

1. No warranty issues/repairs for at least 3 years and maybe more (depending on make/model). When you first buy (saving for) a house you don't want unexpected costs coming up.

2. Lower maintenance costs are likely, again a good thing.

3. You should be able to lower your payment a good chunk. $516 a month was a mistake for that car to begin with...

4. Now is a great time to buy new, car dealers are crying to sell their new inventory and they need used cars to sell.

5. Rates are decent.

6. Take a look at leasing, generally I HATE leases for a number of reasons, but it may work for your goals here.

7. Lots of good and fun cars out their right now that I think would get you where you want to go, give them a good, honest test drive, and during the test drive remember that you are trying to buy a house, not trying to buy that car!

I don't know what you "must" have in a car, but having owned a 330ci, I can think of many cars that would be "good enough" with your stated goals. I found the 330ci to be quite boring, underpowered and it had benign if not boring handling to be honest.

Again not knowing your payoff, etc.-

Genesis Coupe
370Z base
350Z new but leftover
Honda Fit Sport
S2000 blows away a 330ci in every way except usable room
GTI (reliability issues, but under warranty if new)
3speed
WRX
Mini

Good luck bud in what ever you choose to do, it's cool you are thinking this out and planning this far ahead, many people don't....

[TMNT]

After thinking about it last night...I'm not going to refinance it.

I think a lease in this case might be my best option (though I don't like the idea of leasing). However time is on my side so I'll think about it some more.

Thanks for the info everyone.