Refinancing better than repossession

Dear Terry,
My husband and I bought a 2001 Dodge Durango and we are having a lot of problems with it, so we have decided that we need to get another car.

We have a three-year loan on the Durango and can't afford to make two car payments. Do you think we should refinance the Durango and try to get it fixed? I don't want to have it repossessed.
-- Ane

Dear Ane,
Since you didn't say what it would cost to repair the Durango, it's hard to say whether you should hang with it or take out a loan to cover repairs. You are right to avoid repossession at all costs. It will ruin your credit rating for years to come.

Try to pay down the Durango loan to the point where you can sell the sport utility vehicle for what you owe on it and than start over with a new vehicle.

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