At the end of this month I will be getting my annual bonus and I am having difficulty deciding which one to pay off, the car or the credit card? At the end of this month I will owe ~$2k and I have a balance on my cc for about the same.

The car is is 1996 Saturn SL2 with 140k miles on it. It burns oil, about a quart every 1k miles. It is getting up in mileage and I am sure a mechanical failure is going to happen soon. Based on kbb.com and edmunds I am upside down on it.

The credit card is at 12.9%. Which should I pay off?

It would be smartest to payoff your cc first but I would probably do the opposite.

First of all I HATE car payments.
Secondly as you said you're upside down in the car loan.
Last but not least it's nice having the car title in your possesion.

Are you currently paying full coverage insurance with comp & collision?

How long did it take you to accrue the $2k cc debt? If you pay it off, it's important NOT to charge it back up again.

the $2k in CC debt was a result of the car needing some repairs, cost of boarding the dog, vacation rental car. We don't use it every day, just when we need to.

EDIT: Yes, I am paying full comp and collision on the car.

How much savings would it be if you only paid liability car insurance?

How much savings would it be if you only paid liability car insurance?

I am not sure, but I don't think I would want to remove it.

Also, what is the car loan %?

You also have to think about what you are going to do when the car needs to be replaced. Which direction then?

I'd go with paying off the one with the highest interest rate if I had the selection. Then again, are you willing to pay off the car and then get into another contract with a newer model?

The insurance switch is a consideration also. That is, if you are a safer driver and don't like ramming into cars, people, buildings,etc. You might just want to call your agent and ask what the difference in prices are for switching to a lower coverage.