Most of the people on the Total Money Makeover forums think I should sell my car and get a beater until I'm debt free. This is why I will not.
When I bought my car, I traded in a paid for car for it. The old car was having problems every month. For several months straight, very expensive repairs needed to be made. One month, the starter died, and that cost $500. Another month, the belt came off and I lost my power steering. That was $300...and etc. It was becoming a huge hassle, and when I got hired at my first job, I needed to have reliable transportation.
My dad helped me look at cars, and I bought a brand new 2007 Chevy Cobalt. It is very fuel efficient (at the time, gas was still very high). It gets around 30 MPG. Also, it's under warranty so if anything goes wrong it will be fixed for free.
I hate the monthly payment, but the peace of mind that comes with it is worth it. I know I will be paying it off early, so I can deal with it for now. I do know that all future cars I buy will be paid for in cash right away. But as someone who was just starting out in the real world, it was *impossible* for me to pay cash for the car. I had nothing in savings and only had the trade-in as my down payment.
So the car will be staying...and when I pay it off, it will stay until I have enough in cash to buy a hybrid vehicle. I'm leaning toward a Ford Escape Hybrid when the time comes. But I'll cross that bridge when I come to it, many years from now. :)
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You don't have very much debt other than the car, so I think you should keep it. If you were still $28,000 in debt and the car payment was keeping you from paying extra on the credit card debts, then I would agree with them. I watch Ramsey a lot and it's funny how many times he tells people to get a "beater". I have a car I'm thinking abut selling. Maybe I should list it in the paper as a "$2000 beater for sale." Another Ramsey fan would probably jump on it!
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