what a day...

[zim]

just got a $700 tax bill because there was a mistake on my 2008 taxes, my wifes car just had the engine go out a week after we made the final payment and got it paid off....not sure how we will get through this...

[Nightfly]

The tax bill can wait - I know because I've dealt with both federal and state (two different states) on old tax liabilities exactly as you describe. The IRS will make arrangements to allow you to make payments or simply take it from next year's refund if one is coming to you. So don't sweat the tax thing just yet.

The car, of course, is the real emergency. Depending on where you live, many salvage yards offer mechanic services that will replace your blown engine with a rebuilt one - don't go NEAR a dealer on this type of major repair. Also check Craigslist for guys that do repairs of this nature. Pick up an Auto Trader and look for "rebuilt engine replacement" ads.

[JoshuaHeckathorn]

Sorry to hear about the double whammy zim. Unexpected tax bills and car repairs are always a pain, but at least you've got your car paid off now. You'll just have to put the extra cash you would've had without a car payment towards the engine repair. Take care of that first, and then you can worry about the tax bill. It's not like the IRS is going to come knocking down your door if they just notified you of the mistake. You've got time.

This experience should help you realize how important it is to have a healthy EF as well. Unexpected bills like this won't cause you major stress if you've got 6-12 months of expenses sitting in cash. Make that a financial goal of yours after you get through this period and you'll sleep a lot better at night.

[BMEPhDinCO]

I echo Joshua - this sounds like an advertisement for an emergency fund!

You can direct car payments to engine repair and you should talk to the IRS about how to pay the bill - whether more out of the paycheck, or wait until new taxes filed and reduce refund, etc...

AND, make sure you start putting away an emergency fund NOW! Even $50 of the car payment will help until the engine is taken care of!

Finally, sorry to hear of your troubles, I know they always seem horrible at first, so hopefully you can see the light at the end of the tunnel!

[Gary Barzel]

If you are going to replace your engine with a used or refurbished engine, be sure to speak with a reliable mechanic first, as you don't want to be left with one that is going to wear out quickly. Speak to him about all your options and what the best way for you to get the most without having to spend a ridiculous amount.

[naomibatac]

I know how it feels. Getting a car is more important because you use it to get things done. I suggest that you discuss with the lender and get a financing for a repair or a new car. When it comes to cars, I always prefer brand new for security, safety and lesser headache.

[bjl584]

When it rains it pours. This is a good example of why building an Emergency Fund is crucial to any financial plan. To avoid the twists and turns that life inevitably throws your way.

[DebbieL]

Originally Posted by naomibatac

I know how it feels. Getting a car is more important because you use it to get things done. I suggest that you discuss with the lender and get a financing for a repair or a new car. When it comes to cars, I always prefer brand new for security, safety and lesser headache.

Brand new cars are a waste of money - there's plenty of nice, reliable and safe used cars out there.

[disneysteve]

Originally Posted by DebbieL

Brand new cars are a waste of money - there's plenty of nice, reliable and safe used cars out there.

Nope. I hope people keep on buying brand new cars. That way, those of us who know better will continue to have a good supply of used cards available.

[bjl584]

Originally Posted by DebbieL

Brand new cars are a waste of money - there's plenty of nice, reliable and safe used cars out there.

It depends on the circumstances. If you can afford a new car (i.e. pay cash or don't finance for more than 3 years) and you drive it until it is fully amortized, then there is nothing wrong with buying new. Buying a new car every few years and continually rolling auto loans is a waste of money.

[Frugal]

Well, hang in there. We recently had a huge unexpected car bill of around $550 in one car, the week after my own car mysteriously started acting up and having issues. This too shall pass!

[DebbieL]

Originally Posted by bjl584

It depends on the circumstances. If you can afford a new car (i.e. pay cash or don't finance for more than 3 years) and you drive it until it is fully amortized, then there is nothing wrong with buying new. Buying a new car every few years and continually rolling auto loans is a waste of money.

Nope, it is still a waste of money no matter how you slice it. I will come out ahead buying decent used cars whether I buy new cars for cash or not. They are so much cheaper a couple years old. Waste of money.

PS - I don't really care if people want to waste their own money and can afford to do so. It is no skin off my nose. It is a waste of money though. I can afford to travel without going into debt, and I choose to do so. Many would consider it a waste of money, and they may be right. I like it, so I'll keep doing it. I'll waste my money on experiences and let others waste their money buying new cars (which I can then pick up for a lot less a few years later). Everyone's happy-happy.