stupid mistake!

[investingnoob]

So I made a terrible decision last month. My beater car was having tranny issues and wasn't worth replacing. So I traded it in for a new car. 2011 Subaru impreza 2.5i. So now I have a $16k loan and I'm mad I went into debt when before I just had my house.

On top of that I want to propose to my girl friend by July. I'm going to save up for the $1800 ring she loves but she said if I can't afford it there's a $500 one she liked. She just wants to be engaged.

She has a car loan of $9000 at a 21.99% rate because she has bad credit. Were working on getting her credit back up. We want to be debt free asap.

I just wish I never bought this new car! What can I do?

[disneysteve]

Unless you put down a large downpayment, you are probably upside down on the car loan since new cars lose value the instant you drive them off the lot. I'd check around and see what you could get for the car. If it is close to what you paid and you have a way to make up the difference, sell it. Then buy something much more affordable, like $5,000 or less.

As for the ring, it needs to be affordable. To me, that means no debt involved in buying it.

Do you have your EF in place? Any other savings? Post your income and expenses if you'd like to let us see where you could tune things up.

As for her car loan, what is that car worth? If she can break even, sell it and get out of that loan.

[Frugal]

I don't know. I have a beater car, too, but it is kept up and has a lot of money in it. I would personally NEVER in a million years get a new loan on the car. They lose so much money over the first few years...maybe you could sell it?

[khosta]

Im so sorry to hear about this!!! I would try and sell the new car - Craigs List, Kelly Blue Book, etc... Make your finances work again. Good luck with everything and congrats on the future engagement!!!

[EEinNJ]

"I just wish I never bought this new car! What can I do?"

um, you could walk?

Seriously, don't beat yourself up. As you said, the car you had was not worth fixing. Selling the new one will only lock in the hit on depreciation, and then you'll still have to go and buy a car. And if you buy a beater, you're that much closer to having the same problem all over again.

The Impreza is a very good car that will last a long time and not need expensive repairs. I've been through it with used cars and new ones (haven't had a payment since 1997!) and the truth is, if you buy a moderately priced new car like a Subaru and take good care of it, it can be cheaper than buying used and dealing with the hassle and expense of repairs.

Start saving now, though, to pay cash for your next one.

[clintdavis]

What is your monthly take-home pay? What is the minimum monthly payment on your car? If your car payment is a high enough percentage of your income, it will probably still be best to sell it, take the loss, beg and borrow a car for a while or buy the beater. In your shoes, I would go with the $500 ring. The ring is just a thing. your relationship is what's most important, and getting control of your finances ASAP is going to be a much better gift of love for your gf, than a more expensive ring.

There are some things you could do to fix this situation relatively quickly, but it will take some effort and planning. Let me know if I can help.

Clint
Personal Finance Coach

[tripods68]

Don't compound your headache by trying to resell it, or walking away. You will lose more money, if not mess up your credit. Subaru is a very nice ride and reasonable price. I would rather focus on trying to pay it off as soon as possible. Then tackle your G/F credit problem. Get your Fiance a $500 ring too. No particular order.

Don't beat up yourself too much, intead of regretting buying a new car to replaced a CRAPPY car! Take charge of it your decision! What's done is done. The only thing you can do is OWN UP and not run away!

[Joan.of.the.Arch]

Do I remember you already had two or three cars? If so, that should influence your decision about this one.

[thomsoad]

Originally Posted by investingnoob

So I made a terrible decision last month. My beater car was having tranny issues and wasn't worth replacing. So I traded it in for a new car. 2011 Subaru impreza 2.5i. So now I have a $16k loan and I'm mad I went into debt when before I just had my house.

On top of that I want to propose to my girl friend by July. I'm going to save up for the $1800 ring she loves but she said if I can't afford it there's a $500 one she liked. She just wants to be engaged.

She has a car loan of $9000 at a 21.99% rate because she has bad credit. Were working on getting her credit back up. We want to be debt free asap.

I just wish I never bought this new car! What can I do?

Giver the $500 ring and tell her that at least you learned this stupid mistake BEFORE you got married.

[AtoZ]

Care are the death of many great financial plans. Sell the car for as near to what you owe as possible and get into something affordable and reliable. As far as the engagement ring - just as bad as cars in my opinion, and for many of the same reasons. ha, ha

[LivingAlmostLarge]

Keep the car and just pay it off. I have a new subie last year and I think if we keep it long enough it'll be fine. Then again we have a 99 corolla bought new and still going. I'm thinking another 10 years and I threaten my daughter with her driving it in 15 more years.

[janzz05]

well many people advise not getting married until youre debt free its not fair for each of you to take on each others debt.
now with that said ill come back to the real world

[LoanAmortization]

Convince her that in a modern equal society, the woman should have a turn purchasing the rings for both of you.