This may seem like a comparatively simple question but there is not one simple answer. In fact, there is an array of variables that you need to consider before deciding if this is the right option for you.
It should be noted that, in principle, selling your car to clear debts, is a good idea.
Establish The Price
Before you can consider this as an option you need to know what the value of your vehicle is. You can look online at what vehicles of similar nature are selling for but the simplest, and most accurate method is to visit a car buying service such as sell my car fast.
They will give you an instant price for your vehicle and even an instant sale if you want to.
Once you know the price you’ll be able to establish how this will affect your debt, will it clear it or simply reduce it to a more affordable level?
The next step is to consider how much you use your car and how much you really need to. For example, you may use it every day to get to and from work but for very little else. If there is a reliable bus or train service you may be able to manage quite happily without a vehicle.
Or, if this is all you do, simply swapping for a cheaper car will help.
However, if your car is used for a daily commute that doesn’t have a public transport option and you pick up the children and take them to an array of activities, then you need a car and you’ll have t consider if seeing yours will give you enough funds to purchase another one and pay off all or some of your debts/bills.
The answer may not be yes!
Don’t forget to take into consideration the cost of fuel, insurance, and repairs when comparing the cost of commuting to owning a vehicle.
It is also important to consider whether you actually own the car or not! If it’s leased then selling is a moot point. If it’s on a loan or other finance you’ll need to consider how much is left on the loan as to whether it’s possible to pay it off and whether you’ll have enough funds to pay off any other loans and/or purchase another vehicle.
If you do need a vehicle you should consider whether the very latest one is really necessary. There are plenty of older vehicles which are smaller and more fuel efficient, which you can replace your current vehicle with and still be just as mobile. You may even save on the mpg.
The final consideration is how much debt you have and how well you currently manage it. If your vehicle is essential then there may be other lifestyle changes you can make to increase the payments you make on your debt, reducing the time it will take to get rid of it.
Getting out of debt is a great feeling, if you don’t really need the car, or can survive on something smaller and cheaper, it’s worth selling your car to get out of debt.