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Smart Shopper Owe more than it's worth... I'm upside down and I can't get up!
1160 messages, Last post on Oct 22, 2009 at 7:11 PM
You are in the Smart Shopper Forum. Your Hosts are kirstie_h & tidester
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Basically, your friend is doing a self-managed lease. He just assumes the end of lease value risk. At one point, my method was 1 new car (the wifes family mobile) kept as long as it served it's prupose and was reliable. Target being 6 years at least, and it got the long trips (so 100% reliability was key). the Quest? No problem for the 6. The Voyager? That made 3 before it got traded for the Quest! My car was a 3 YO something interesting that I would keep until it was 6 years old, theoreticlaly lower the cost. WOrked correctly, every 3 years or so a car would be purchased. I have since abandoned the plan, and for me, find that buying new and keeping a long time should work better (not that I can do it). Currently we are invested heavily in being too poor to buy a new car (and college bills loom), so we have switched to the keep them forever plan and hope they last! But, if I do need to replace one soon, I am going with a 2-3 yo semi luxury with heavy depreciation (say, a 2007 Volvo). Some good buys to be found tht way.
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Replying to: stickguy (May 17, 2009 7:39 am)
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Replying to: stickguy (May 17, 2009 7:39 am) I think that's redundant. If it's not reliable then it's not serving its purpose.  tidester, host SUVs and Smart Shopper |
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....one should necessarily 'drive their car into the ground', Fezo, unless keeping a car for five years constitutes same; for most, it doesn't, unless the car is neglected or miles have really piled up. I just can't see trading a car in after a couple or three years just because you've got the itch, especially if you're upside down. I mean, people make up all kinds of reasons to trade even when upside down (this or that are broken, I had a kid so suddenly I need an SUV, can't afford the gas), but the realities are that it's more expensive, and more importantly, people just want new stuff....understandable.
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Replying to: ghulet (May 17, 2009 1:19 pm) |
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is the result of the method in which the buyer chose to make the purchase in the first place. That the vehicle is worth less than the balance owed does not mean the owner should abandon the car, but understand he is obligated to a finanancial CONTRACT and fulfilling that contract is what is important & required. That you are upside down is because of the method in which you chose to make the purchase in the first place. In all contracts, be faithfull.
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Replying to: euphonium (May 17, 2009 3:49 pm) Taught me about how loans are structured as well as a valuable lesson on what a slightly used car is worth vs a new one. That's now coming up on 30 years ago but it's still fresh.
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Replying to: fezo (May 17, 2009 6:29 pm) Well, she had a six year loan(unheard of in those days) AND it wasn't a simple interest loan AND of course they skinned her on the interest rate since she didn't have any credit history. Basically about the first 4 years of her payments did nothing but pay the interest on the loan. She is probably still driving that car. So - the lesson - I always make sure that that my car loan is a simple interest loan. Even in the 80's I thought they were the norm, but trust no one, particularly when you're borrowing money from them! |
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| I bought a 1995 saab 900 v6 last summer for $5K, expensive i know, but it was in perfect condition with all maintenance records. five weeks later the motor died with 82K miles... bad timing belt. that was another $2200. I still owe $6K, should i sell to get a cheaper, more economical car and take the loss to pay a chunk of the money off, or should i keep it and finish the payments? | |
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Well, the T Belt was more of a fluke thing. So, if the car was otherwise in gret shape and well maintained, it still is (only better, since you know the T belt, etc. are good to go!) Might as well keep it, if you do the math. And I am assuming you won't get 6K for it, and you will owe that 6K (and if it is a car lona, you have to come up with it when you sell the car. Say you owe 6K, and can sell it for 4K. You have to come up with 2K out of pocket just to get back to even. Then, you have to take out a new loan for the next car. Taking into account the 2K that wil ljust vaporize out of your bank account, what are you going to get for enough less in payments to make it worth while? |
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