If you're obligated for $26K on a 2 year old V6 mustang and considering trading it in, you are so underwater the edealer is going to slide it in so deep
While I completely agree with your underlying message, I think the OP is saying that if he pays his note on time every month and doesn't pay ahead of schedule, he will end up paying $26k which includes the interest fee. Of course, if he pays the car off tomorrow, for example, he will not have paid $26k for the car (including the interest he has already paid).
So the question is, how much does he owe on the car vs how much he'll get for a trade-in. If the car is only worth, say, $11k on trade, but he's only gotten the principle down to $15k, then buying ANYTHING, will be a huge mistake.
I didn't put this in my initial response, but let me also add that in addition to finding a way to reduce insurance, the OP should also look into refinancing his loan. I did that several years ago and my payment dropped from $360/mo to $300/mo.