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Car question...what would you do?

post #1 of 14
Thread Starter 
Where to start with this one..
I had to declare bankruptcy 3 years ago and I had to surrender my vehicle. My mom was kind enough to lease a truck for me, under her name, but I make the payments. The lease is up in August, and I have to decide what to do. My boyfriend thinks I should keep my truck, and I'm not sure he understands my reasoning or maybe I'm not explaining it right to him, but he doesn't seem to want me to get rid of it, he says I'll be making more money at my new job, and work is now only 4 minutes from home, so it will cut down on gas a bit. My options are:
1. Keep the vehicle. ('02 Chevy Trailblazer)
While I love my truck, I sometimes feel it may be too hard for me to handle. I drive a lot for pet sitting and other things, and after a long time of driving, my back, neck and wrists are sore. After a week's worth of pet sittng, I can really feel my muscles are tensed up. Plus I think the seat is crooked, I seem to lean to the right. The cd player is broken, the back hatch window pops open at random times, the wipers seem to be slowly not wanting to work well, it sucks gas, and if I buy it, they said it has $10,000 left on it, and my payments will be $300 a month. So this means it's only good for a 3 year contract. This is my mom's bank, not mine. In this economy at the moment, I wouldn't be able to sell it. No one wants a gas guzzler when gas is so expensive. It may be a blessing in disguise that I leased it.
The pros are: in two words: Wisconsin winters. My truck handles wonderfully in the snow, plus it has an automatic start in it, great for cold nights when I have to go let a dog out at 10 pm.

2. Give back the vehicle and purchase something on my own. (My mom lost her job due to disability so she doubts she could get another loan for me, and my bankruptcy may factor in here...I only have a credit score of 584 at this time. What stinks is I just payed 3 years on a truck and all the credit went to my mom! But, with her not having a job, it is very likely she may not be able to even buy this truck off them unless she is grandfathered in (which I doubt) so I would HAVE to buy something else)
My original plan was to purchase a cheap car, to save money on gas and car payments. I called my credit union, and he said (let's see if I can explain this right) if I get a cheaper car, usually those cars are older, and they only let you take out a 3 year loan up to certain age of car. If it was newer, I could take out a longer loan. However, older=cheaper car, and newer=more expensive car.
But maybe not. More expensive in the long run, yes, but monthly, if my payments are spread over 72 months as opposed to 36, my payments will be the same. An example (and this is in no way the actual figure, just a round about example) a $5,000 older car, when they only allow 36 months to pay it off, will be $138 a month. But a $10,000 car, being newer, they'll allow 72 months, and the payment will be the same. Does that make sense?

3. Car or SUV?
I LOVE SUV's, always will. But with these gas prices, what am I to do? I asked you guys earlier about what kind of car would be good in snow, and I resigned myself to the sand bags in the trunk idea. I was cool with the car idea, even going so far as to say I wanted a cheap, efficient car, But today, I thought about future kids, dogs, etc...would an SUV be better suited for that? I'm NOT getting a mini van. I guess my future plans come into play here, especially if the loan may extend into 72 months. I hope to have a child by then! Plus, I just feel safer in a truck. But, ohhhh....the gas prices!

So, I think I brought up all my concerns, what would you do in this particular situation?
I have only a little time to decide.
Keep my truck and pay $300 a month, and now little things are going wrong with it, or get a newer, nicer truck, possibly even with a warranty, for the same amount monthly?
Wouldn't it make more sense to get a newer, but more expensive vehicle, that has a loan of 72 months, thus making the payments equal to a cheaper, older car with a loan of 36 months? In my mind, getting a newer vehicle for the same monthly payment as what I'm paying now, is the way to go. But I have been known to be wrong. Blast holes in my theory, if need be. Bring me back down to Earth!
post #2 of 14
IMO, get rid of the truck. Go for a new, small fuel efficient vehicle. The saving on gas will help cover the extra cost of the car. And you are less likely to have repairs that wouldn't be covered under warranty.

Don't buy an SUV based on what might happen. That's a lot of money (payment and gas) for the years until you need something bigger. I had three large dogs (80 + lbs each) and two kids in my hatchback. I only switched it out when I got pregnant with #3 because the 3 car seats wouldn't work in that car.

Did you pay your mother for the vehicle or did you send in the payments? Take a copy of all of the cancelled checks & a copy of the payment slips so they can see you actually made the payments. It maight help.
post #3 of 14
Before you get a small car, ask around on how the ones you may be considering handle in the winter there.

Have you been saving any money at all? If you have some money for a down payment it will really help a lot.
post #4 of 14
my 4 cylinder front wheel drive honda handles great in the snow. considering the price of gas, you would be nuts to do anything but. You can get a good used honda or toyota for maybe 6000 dollars. a car payment on that won't kill you. Tell your boyfriend to buy his own truck.
post #5 of 14
Has your credit union said they will definitely finance you for a car? If not, your options are much more limited.

The cheapest car for you (and anybody else) would be a used economy car. In your area, high on that list would be a Subaru, especially an Outback, since all Subarus are all-wheel drive. The second cheapest car would be an older large car, such as an Impala or other large domestic car. Every $1,000 you save on the original cost of the car is currently 250 gallons of gas, or enough gas to drive about 5,000 miles.

Perhaps the easiest to buy would be a new Kia or Hyundai, both of which are much improved, have great warranties, and get good mileage. The cheapest of them get down in the less-than-$10,000 range. You will have to pay a higher interest rate, but perhaps not too bad, if you can get financed at your credit union.

You should finance for as short a time as possible. Seventy-two months is 6 years, and you don't like your current car after 3 years. Again, if you finance with your own credit union, you may be able to re-finance later at a lower rate and a shorter term.
post #6 of 14
Well having worked in the auto finance arena-this is my suggestion.

Do not buy out the lease-the vehicle is not worth $10,000. The dealer would love for you to buy it out but its way overvalued-look at KBB.com to establish a true price. You know you will be responsible for any mileage overages and damage to this vehicle.

Financing a different vehicle. Yes bankruptcy makes it tough and making the payments on a vehicle not financed in your name (called a straw purchase) isn't helping your credit rating either. What I would look for is a certifed pre-owned vehicle. Most auto mfg have these types of vehicle and there are usually special APR's with these vehicles.

If you want a small truck/smalll SUV the prices should be ok but as you will have a shorter commute consider a car. We had Explorers for 10 years before getting the car and Neil commutes about 20 miles one way and hasn't had any problems. Of course it the weather is going to be bad he will take the truck.
post #7 of 14
I'm ignorant in these matters, but I have a few opinions to throw out there:

I understand your need for something that handles snow well -- but now that control of the US economy has been handed over to the oil industry, a large vehicle is going to cost you more in every way... and since it'll be hard to sell, you're probably going to have to drive it until it collapses under you.

Six years is a long, long, long time -- and you will pay a huge amount of interest on a loan that long. It might be worth it, if your vehicle is really, really important to you. But as for me, I'd rather walk than let some greedy financial institution get me that tightly in its clutches!

I've only bought one brand-new car in my life: a 1975 Chevy Vega. If you know any old mechanics, just mention the model and they'll laugh themselves silly. It was a horrific mistake, and ever since then, I've bought used cars -- with much, much better luck, and far less outlay of funds. Used is the way to go!
post #8 of 14
Oh I forget a vital piece of info on those 72 month auto loans-DON"T!!!!
If oneyou puts down a very small down payment, it takes 5 years, thats right 5 years before you have equity in the vehicle. So if you were in an accident or wanted to trade at the industry average 37 months you would most likely owe more that the vehicle is worth.

Its not a good deal. Also some mfg may offer a flex payment schedule were you pay one amt for a certain amount of time then it increases a bit for the remainder of the finance term.
post #9 of 14
Quote:
Originally Posted by GailC View Post
Oh I forget a vital piece of info on those 72 month auto loans-DON"T!!!!
If oneyou puts down a very small down payment, it takes 5 years, thats right 5 years before you have equity in the vehicle. So if you were in an accident or wanted to trade at the industry average 37 months you would most likely owe more that the vehicle is worth.
True..be careful!
post #10 of 14
I don't really have too much to say, but I'd go for a small car.. high gas prices or not. I love small cars, but that's just me. Especially with how much gas is lately.. I would hate to drive a huge car that makes you spend a ton on gas. Luckily my little car is pretty good on gas.
post #11 of 14
After being a general sales manager in the auto industry for years (before I changed careers) I can safely say you should follow GailC's advice
post #12 of 14
I say let the truck go, sounds like it has a few to many problems to be paying 10k for it. Last time you posted about this I suggested a Subaru. That still goes, mine is pretty nice, AWD, not as cool looking as an SUV (sigh) but it gets the job done
Saturns are really good cars too, My last car was a 92 4dr Saturn car, front wheel drive, and I loaded it up with kitty litter in the winter and it did really well. Super on gas too
post #13 of 14
72 month car loan?!?!? OMG, Suze Orman would have a fit if she heard that you were considering it.

Get the small used car. How much does a gallon of gas have to cost before you understand the economics in play?
post #14 of 14
Quote:
Originally Posted by gailuvscats View Post
my 4 cylinder front wheel drive honda handles great in the snow. considering the price of gas, you would be nuts to do anything but. You can get a good used honda or toyota for maybe 6000 dollars. a car payment on that won't kill you. Tell your boyfriend to buy his own truck.
I have a 2000 Honda minivan that has traction control, that works really well- I mention that to say you could probably find an older 4 cylinder Honda or Toyota like Gail said, that has the traction control for the snow. I had a '94 Accord hatchback wagon until about 3 years ago, and I loved it- got up to 36-37 miles to the gallon too, and the Accords and Camrys (but not the wagons ) are everywhere on the road- finding one shouldn't be too hard . I'd go for that too . Good luck!
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