A first-time car owner is experiencing buyer's remorse after purchasing a used, low-mileage Toyota 4Runner for less than $30,000. The buyer now faces a $29,000 car loan with a 6 percent interest rate over 48 months, resulting in monthly payments of around $700. Despite a $65,000 annual salary and living at home rent-free, the owner is considering selling the car back to the dealer for $23,000, which would incur a $6,000 loss.
Financial Advisors Weigh In
Mark White of Mark White Wealth Advisors and Cody Moore, both financial advisors, provided guidance. White cautioned against an emotional decision, advising instead to prioritize paying off higher-interest consumer debt, likely from credit cards or personal loans, which carry rates of 20-30 percent and up to 10 percent respectively. He emphasized that draining savings to pay off the car loan would create new risks. Moore agreed, noting that the consumer debt is a more immediate issue.
Managing the Car Loan
White described the 6 percent auto loan rate as manageable, especially given the vehicle's low mileage. He suggested keeping the car and focusing on high-interest debt first, as that provides a guaranteed return. Moore recommended building emergency savings first and reassessing after a year, as depreciation slows significantly after the first year—new cars can lose up to 30 percent in year one, but only 5-8 percent in years two and three.
Considerations for the Owner
The owner has access to a family truck, reducing the need for the 4Runner. However, the advisors stressed that selling at a loss or draining savings is not strategic. Instead, preserving liquidity and paying down debt over time is wiser. US car-related debt hit a record $1.66 trillion in 2025, reflecting broader market trends.
