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Dear Terry,
I own a 2004 Ford Expedition that I purchased
used in September 2007 for $24,000. I didn't expect
gas prices to get where they are.
Since the Expedition only gets 13 miles per gallon, I wanted to dump the car for a smaller, more
fuel-efficient vehicle. However, I am completely upside down on my loan. I owe $23,000 and the Ford dealership
told me they would only give me $10,000, even though Kelley Blue Book rates it at $16,000.
Would it be cheaper to keep it, drive
it for six years and deal with gas prices, or
dump it now?
-- Robyn Sanchez
Dear Robyn,
Given the economics of your situation -- $13,000 in negative equity on the Expedition that would have to be paid or
rolled over into a loan for a new, more fuel-efficient vehicle -- it would probably be wiser to hang onto the gas
guzzler for a few more years.
Even if you bought a new vehicle that got 40 mpg, it would take more than six years to recover the
$13,000 hit.
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