That is a rock and hard place. I would sell the car and pay off the note. Then buy a used car cheap and outright and just put the bare minimum ins on it.
That way I eliminate my car note and just pay cheap ins on a reliable family car. That way you have reliable transportation for work and your child.
Either way, good luck.
That's what I was thinking. $400 a month (with the prospect of losing the car if you can't keep up the payments and probably your credit rating too) seems like a lot of risk. There are reliable inexpensive used cars out there.
Also, what kind of a car do you drive, and what's it worth? If you're planning to sell it and get nothing out of it except relief from making payments, you're kind of in a corner.
If your car is worth something, and you can sell it and turn around and buy something really cheap but reliable like a mazda protege, that might be a way to go.
I think that would be basically giving up and painting yourself into a corner.
Sounds like you're only about 16 weeks along? So you have a long time to work before the baby arrives. If you sell your car you're closing off all your options - if someone is "usually" around who might be able to take you on the odd errand, that's not the same as saying you know your family will be available to get you to work.
You don't say where you live, or what you've done to try to get a job, I think selling the car would put you in a very big and irreversable downward spiral.
I'd do it. You can always buy a really cheap car when you get a job.