We know that purchases are based on emotion, so it makes sense that sometimes people will buy vehicles based on their feelings about a certain type of car or a new car versus an older car, rather than by logic and what one could and one could not afford. Sometimes people lose their jobs, and can no longer make the car payment. They once could afford, but now they cannot. This situation can happen for a number of different reasons, but when you have a vehicle you cannot afford, you have to get out of it, and here's how to do it.

How do I know if I can afford the vehicle that I have now?

Some people are in denial with their vehicles. They buy new cars because they think they need something reliable, but in reality they're making ridiculous car payments upwards of $500 when their income just cannot support that. Dave Ramsey offers a great rule of thumb that everyone should follow. If your vehicles are worth more than half of your annual income, your cars are too expensive.

If you're 1% or 2% over, it's no big deal, but there are people that have $30,000 worth of cars and make that same amount each year, and that's ridiculous! Cars are a liability, they go down in value. New cars are the worst offenders; they can easily decrease in price by 20% each year for the first few years. This depends on the make and model, but vehicles generally take the largest beating in value when they are new. This is why I recommend that one should never buy a vehicle that's newer than two-years old.

What do I need to do to get rid of my vehicle and out from under this debt?

If you have discovered that you are in a vehicle that you simply cannot afford, you need to sell it. It's as simple as that. Head on over to Kelly Blue Book, and look up what your vehicle is worth. Look up the private-party value, and that's how much your vehicle is worth. Don't sell your car to a dealer, because they will give you a wholesale price, and usually you can get 20% or 30% more by selling it yourself.

Once you know what your vehicle is worth, You'll want to list your car in the classified section of the newspaper. You can also create signs and put them on cork boards around town. Don't overpay and get your vehicle listed in some listing of used cars. The classified ads usually are more than efficient, and they're really not that expensive.

Once you find a buyer, you'll need to get payment from them. Make sure that the check clears before giving them the keys and the title, but once

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