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Don't know what to do!

post #1 of 13
Thread Starter 
So I am engaged. I start my medical assisting class April 6th, which is AWESOME, and I will graduate May of 2010.

My fiance and I want to get married that fall.... October of 2010.

My problem is that we want to buy a house and get married, but we need to save the money for it. I bought a car a little over a year ago, and at the time had no idea that I was going to meet the man I was going to marry soon after...

I was planning on going to school for a while, living at home, and having money to burn for a while when I bought it. I pay $308 a month for the car payment, and $170 a month for insurance. I LOVE my car to death, and I still owe $17,700 on it! That is $480 dollars a month, and I only make $1400.00 a month. So I have $1000.00 left after that is paid. My bills after that total about $600.00 and that doesnt include every other month expenses like doctors appointments and medications and so on....

We have a truck that I could drive every day, if I was to sell the car, but I know I will never be able to get what I owe for it! Can you sell it for what you can get for it, and then finance the remaining balance? Is that even possible, because then it would cut down the money I am spending every month, would let me get caught up with some debts really quickly, and then be able to save up for wedding and house and hopefully soon after that babies....

I just dont know what to do with the car. I love it so much, but I regret spending that money on it when I have so much that I need to save for!!!

Anyone else ever have this situation? Can I sell it and refinance the balance through the bank? Has anyone else done that???
post #2 of 13
I would advise selling the car. You probably won't get the price you owe on it though, but what you will end up owing will be a whole lot less than you owe now.

I'd never go and buy a new car. They depreciate as soon as you turn the car on and roll the tires one time in the parking lot.

Speak to your bank manager where you have the car loan. Tell them you want to sell the car and put 100% of the proceeds toward the loan you have with them for the car. They will probably refinance you because you won't have the car as collateral anymore.
post #3 of 13
What kind of car is it? Some hold their value better than others. Check the blue book values, you may be able to get more than you think.
post #4 of 13
The problem is, the bank would be the one who would need to buy the car, and they won't do that. What you can do, and I don't really advise unless you have COMPLETE trust in this person, is transfer the ownership to somebody, where they would just keep doing the monthly payments for you. It is risky, as the car would continue under your name, and if they miss a payment, your credit would be the one affected.
I would keep the car and look for a higher paying job to subsidize that cost. It will not make any sense for you to pay the remaining balance and be left with nothing. At least if you keep the car, one day it will be yours, and it will be worth something.
post #5 of 13
i would advise you to keep your car, and start looking at what kind of wedding you want to have, you can have a beautiful wedding on a really tight budget, you can be so creative and do a lot of DIY, also get as many family members involved as possible to get the day running smoothly!
post #6 of 13
If you got a loan for the car through a bank, then you actually don't own the car - the bank does and they have a lien on the car to protect their loan to you. It is unlikely you will be able to sell the car with a lien on it. You need to talk to the bank about selling the car.
post #7 of 13
As I worked in auto finance for 20 years we came across this situation many times.

If you find a buyer you could see if the loan holder would do a transfer of equity. This is having the potential new buyer get approved for financing your vehicle and basically take over the payments.

Or depending on how payment payments you have made on the loan -the more the better you could see if a loan modification could be made. What this could do is potentially lower the interest rate but stretch out the term of the loan. This would only make sense if the payments would go down substantialy.

You can also check with your auto insurance provider to see of the physical damage deductable could be raised to lower your premiums. Ask what can be done to lower rate without lowering coverage though.

As with the current housing crisis the majority of auto buyers are financing vehicles with little or no money down and too long of a finance term (60 months or more). This results in being "upside down"/negative equity in the vehicle. So when one tries to sell the vehicle or trade it in its not worth the balance owing on the loan.

Also what might help a little bit is if you have any extras tacked on the loan such as credit life/disability/extended service plan; cancel those immediately as this refund amount will be applied to the loan balance. Every little bit helps!

Good luck.
post #8 of 13
Originally Posted by fwan View Post
i would advise you to keep your car, and start looking at what kind of wedding you want to have, you can have a beautiful wedding on a really tight budget, you can be so creative and do a lot of DIY, also get as many family members involved as possible to get the day running smoothly!
I agree! You can do a very very nice wedding without spending $10000 on it! Like you could do most of the decorations yourself and with friends, you can do invitations yourself or through a freelance digital artist, you could see if anyone in your family bakes or even see if there is a pastry school in your area that sells wedding cakes cheaper. Instead of a huge meal and reception you could have more of a potluck or a cookout for it, and if you dont want you dont have to do a huge wedding. Its YOUR day and its about what YOU want.
This is a link to a crafting forum I am on and some of them have done completely DIY weddings and they have turned out very pretty! But it might give you some ideas!
And as for the house, if you are getting married then also remember that you will be combining incomes with your now fiance and the payments will not just be on you alone. And yes you are saving up for your first home but do not buy more home than you really need right now. You can always move again if you run out of space. And instead of looking at new homes, look at homes that may need a little more work or homes that have been foreclosed on and you can find some great deals!

Good luck!
post #9 of 13
Thread Starter 
It is not only the home and wedding I need to save up for but I have a few things on my credit as well that need to be paid off...

I just feel like I am drowning...

I am trying to find someone who will do a transfer of equity... my dad is looking into doing it but the payment is a little too much for him right now... so we would have to get it lowered a little bit for him to be able to afford it!
post #10 of 13
I'm quoting Dave Ramsey here..."SELL THE CAR!" People calling in to his radio show always have a car they can't afford and he always tells them to sell it.

Have you heard of Dave Ramsey? http://www.daveramsey.com/

After my dad practically threw his book at me...Dave helped me get on and loving a very tight budget and be debt free (besides my condo).
post #11 of 13
There is no rule that I know of that says you have to buy a house when you get married. Take that pressure off yourself. Pay down your debt aggressively. Separate what is a "want" and what is a "need". Spend as little as possible on frivolous things, and save for your wedding. I agree with the others who say you don't have to have the most expensive dress, flowers, etc (not that you said you would).

After that's all done, hopefully your debt is paid off, and you can start saving for a house. Things being as they are, you need to have pretty good credit, and at least 20% of the cost of the house to put down before you can even get a mortgage. You're probably going to have to rent for awhile. That's the reality, but my gosh, it's not that bad.
post #12 of 13
One other thing to remember, like GailC i spent a number of years in the car business. as a finance manager, then a general sales manager.

Remember first and foremost, your car is never going to be worth more than it is today. So if selling it is your goal, get on it now.

Second, if you financed it for 5 or 6 years you will be making payments for 3.5 to 4 years before you're even close to breaking even. So if you can sell it, finance the balance you're way better off.

The last thing, if you want to really shorten the term, and save a ton of financing, pay an additional 100 bucks every month. your current payments go to paying interest (the way aruto loans work you pay off the interest before the principle). But if you pay more, that additional amount goes directly to the principle and believe me, 100 bucks a month makes an enormous difference.
post #13 of 13
Well, it is an excellent time to buy a house in Florida. I am in East Central Florida and the amount of forclosures and short sales are tremendous.
If you weigh that against keeping the car you love --- Even if you take somewhat of a loss on the car, you may be able to more than make up the difference in getting a good deal on a house. It is easier to get a mortgage if you don't owe a lot on a car too.
I think Gail had some excellent suggestions.
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