Tips on Buying Cars: ====trade in======, proper preventative maintenance, value of my car

Question
i have a 2001 ford focus, that i bought in Nov 2004, the tag price was $10,000.00, and they give me a 16.00% interest because of my poor credit,im paying $300.00 a month, the sales person told me i could trade-in me car after 6 months from the purchase. its been more than 2 years and i still owe $7000.00 on that car, and its been at the shop constently, right at this moment my car is broke from the engine, its been at the shop for a month, luckly my car is still under warranty, but the warranty is about to expire, my question is, if is a good idea to trade-in my car?,i look for the value of my car in the bluebook and is in between $3000.00 - $4000.00, im planning to trade it in for a Toyota RA4 2006.i have $2,500.00 to put down. im hoping to get a good deal and a better interest rate since i have never been late on my focus and my credit score its a litter better. i would appreciate if you can give me an advice on making this step, im really bad on negotiating, can you please give me advice on getting a good deal, how to get a better interest rate, and negotiate the price of the car and the value of my focus.                          thanks

                                     Ivan

Answer
If you owe that much money on the car, then I would recommend that you hang on to it, increase your monthly payments and maintain it well. Rolling that much negative equity into another vehicle will not solve the problem.  It will only put it off on another vehicle and if something were to happen to that vehicle, you'll be in an even worse situation.

Though there are always exceptions, the Focus was an overall good car and with proper preventative maintenance, most should last anywhere from 140,000 - 160,000 miles. Never have I seen a Focus engine fail without cause.  Most often, it is due to either lack of oil, lack of clean oil, lack of coolant or an overheating condition which if repaired promptly, would cost very little money.  

If you have the oil changed every 3,000 miles from this point forward and follow your mechanic's recommendations on other maintenance, it will accomplish two things.  It will keep the inside of the engine clean and it will give a mechanic an opportunity to spot other potential issues before they snowball into an expensive repair.  

I know that if you were to trade on that Toyota, your payment would increase substantially.  Instead of making the trade, why not put that down payment money into an auto repair savings account and then make the same payment on the Focus that you would have had to make on the Rav4?  You will pay off the Focus in no time and will then be all set to start fresh on a new car with no negative equity on your trade.

Good luck!