New-to-us car

[KiwiJo09]

Originally Posted by disneysteve

KiwiJo, the insults are inappropriate but if you can look past them, the concern is legitimate. Okay, your husband's car was falling apart. That is definitely a very valid reason to be car shopping. Buying a 17K car with a 15.62% loan wasn't a reasonable path to follow however. You had a $5,000 down payment. You could very, very easily have bought a good quality used car for $5,000. If you also wanted to borrow some money in his name to help build his credit, you could have borrowed $2,000 instead of $12,000.

Now that you have the car, you could probably correct this mistake, as I explained above. The fact that you aren't willing to consider that option is certainly your choice, but I would hope you can understand why it would frustrate many other people around here.

You asked us:
what you would do in this situation

and you said:
Any advice would be great.

What would I do? I would sell the car for as close to what I paid as possible, even if I took a loss in the process. Then I would go out and replace it with a used car that actually fit my budget. I would borrow a minimal amount toward the goal of improving his credit, not more than $2,000-$3,000 (at least not at that interest rate).

Your opinion may vary but you did ask for our opinions.

I did ask for opinions. And the concerns certainly have their place. All I want to say is that the insults are uncalled for.

I appreciate everyone's input. Thanks a bunch.

[disneysteve]

Originally Posted by KiwiJo09

All I want to say is that the insults are uncalled for.

Agreed, and being a site moderator, I can assure you they will be addressed.

[KiwiJo09]

I'm seriously considering what you've said, DisneySteve. I'll ask hubby if he would go for that idea. I have such buyer's remorse.

[Pansori]

Originally Posted by KiwiJo09

I know. We did it on a whim. And we know that we made a mistake by taking out such a large loan, but it's too late now and there's nothing we can do. We love the car..

Kiwi, I think this was your mistake. You should never make such a big purchase on a whim, such things should be seriously considered. 72 month loan at 15% interest is not good, and that is not even considering full coverage insurance. I understand you love the car now, but give it a few months, I am afraid that love may turn to animosity, especially if making the car payment suddenly takes precedence over other bills.

I would sell the car and go for something more affordable.

[disneysteve]

Originally Posted by KiwiJo09

I'm seriously considering what you've said, DisneySteve. I'll ask hubby if he would go for that idea. I have such buyer's remorse.

Most car buyers get buyer's remorse with a new car but they are stuck with that decision. New cars drop in value the instant they leave the lot, sometimes by as much as 20%, so reselling a brand new car usually isn't feasible. In your case, though, the situation might be different (I'm not sure but I'd look into it). Used cars hold their value better since the initial depreciation has already occurred. Plus, you put down 5K. You paid 17K Even if you could sell it for 15K, I think you'd come out ahead in the long run. Yes, you'd lose 2K up front but you could pay off the 12K loan and still be left with 3K to put toward another car. Borrow maybe 3K, buy a 6K car and you'll be left with 9K less in debt.

That 9K at 15.62% for 72 months would cost you about $5,000 in interest over the life of the loan.

[nick__45]

Kiwi,

My comment was not meant as an insult. It is obvious that you have buyer remorse as far as finance is concern. Otherwise you wouldn't ask for advice or talk about it here. If we sugar-coat the response and say your husband deserves this car because it has been a rough few years or whatever, I think you two would make even bigger mistake soon. I see people getting a new house then buy a new truck to do house work, then a new car for commuting right on a starter salary. Then wham, one person looses his/her job and they goes into foreclosure about a few months because their cash reserve was spent on down-payments for two new vehicles. The last new we want for you is to run out and get another car when things temporarily improve for your family finance and you feel you deserve a nice car too since your spouse has one.

If I was you, I'd pay for that car off as soon as possible, hook or crook.

[snafu]

KiwiJo09: I acknowledge I lack diplomacy but wanted to express genuine concern about the decision to pay 15.6 percent interest for 72 months. 72 x $ 250. = $ 18,000. + $ 5,000.DP = $ 23,000. vehicle purchase not counting insurance, operation and maintenance costs. It would have been better to post these details while you were still considering the pros and cons of the purchase.

Since you 'loved the car', I didn't see buyer's remorse but I wonder if the vehicle can be returned to the dealership as 'not meeting your needs,' to select something else?

[disneysteve]

Originally Posted by snafu

It would have been better to post these details while you were still considering the pros and cons of the purchase.

Sadly, this almost never happens. We rarely see a thread by someone asking, "Can I afford it?" (a la Suze Orman). We frequently see threads like this - "I already bought it. Now what do I do?" At that point, it is much harder to give helpful advice.

[nick__45]

Originally Posted by disneysteve

Sadly, this almost never happens. We rarely see a thread by someone asking, "Can I afford it?" (a la Suze Orman). We frequently see threads like this - "I already bought it. Now what do I do?" At that point, it is much harder to give helpful advice.

The only person I know that ask "can I afford this" question is me. And usually, I already the answer and it is a yes but needed to hear from complete strangers, who probably has a much fresher and clearer view about purchasing and owning financialy responsible than me. Normally, I still talk myself out of buying even when the keyboard advisers say yes.

For example, I like to get a nice car right now and I know I can afford to pay cash or finance with absolutely 0% due to my very high credit score but I still wouldn't buy a nice car. It is a simple matter of the associate costs coming along with a new car. For my area, that would be yearly personal property tax, higher insurance, and bigger headache of owning something I can't emotionally and financially fix every little ding or scratch from usage. Therefore, owning a very used car is the answer for me. And I am a car person. Of course, this would change once my wife start working and our salary will be close to double. Until then, I enjoy shopping for cars.

[KennySoward]

Kiwi...yes, some folks just don't know how to put things nicely But, ultimately most everyone is right, and I think you get it.

I have made a lot of mistakes in my life financially, so I do not judge you at all. I have purchased a vehicle at 13% before...probably worse when I was younger and didn't even look at the interest rate anyway

Just pay it off at an escalated rate at least. Or, you can do what DisneySteve said unless you just love the car too much. You can either remedy the situation a little, or a lot.

Good luck either way.

[landon.bruno]

It is better to pay the minimum to pay it off over time to improve credit score. It is always recommended. Be punctual about your loan payments don’t let it affect your credit score.

[disneysteve]

Originally Posted by landon.bruno

It is better to pay the minimum to pay it off over time to improve credit score.

This is absolutely not true. You should not go into debt or stay in debt any longer than necessary just to improve your credit score. The only thing that you accomplish by just paying the minimum is getting hosed on interest charges.

If you really want to improve your credit score, get a credit card. Charge no more than 20% of the credit limit every month and pay it off in full every month. NEVER carry a balance. NEVER pay less than the full amount due. It is NOT necessary to have debt in order to build a credit score.