Debt/Saving Advice

[disneysteve]

How much is the boat worth? When you said it was a $45,000 boat, was that purchase price or current value?

I realize that cars depreciate, but yours seems particularly bad. What kind of car is it that is worth barely half of the loan balance? Or did you roll some earlier loan balance into this loan? Where did you determine the 10K current value?

[bcoutsfly]

I rolled about $3k onto the final sale price. According to kbb its worth 15k. It's an 03' F250 diesel, not real popular rite now. I traded in an 05' jeep, it would be paid off in a year from now. Live and learn. The boat is worth about 35k - 37k. I'm not sure exactly whats owed on it, I'd guess around 20k.

[bcoutsfly]

Go to KBB.com or edmunds.com and figure out the private party sales price. Sell it and ask your current lien holder to write you a note for the difference.

What do you mean write a note for the difference??

[arthurb999]

You will take out an unsecured personal loan for the difference and pay that off.

[bcoutsfly]

What are the terms for that kind of loan?

[arthurb999]

Not sure... never done it.

[disneysteve]

According to kbb its worth 15k.

The boat is worth about 35k - 37k. I'm not sure exactly whats owed on it, I'd guess around 20k.

Let's assume your numbers are correct.

Car loan 18K
Value 10K (probably higher if kbb says 15K)

Boat loan 20K
Value 35K

Sell car for 10K. Sell boat for 35K. That gives you 45K cash.
Pay off car loan of 18K. Pay off boat loan of 20K. That leaves you with 7K remaining. Buy a "new" car for 5K and walk away with an extra 2K plus you've lowered your monthly expenses by $800 and probably lower your insurance bill, too.

[Fizgig]

Regarding the boat - you said that you took over the payments from your father, but that it isn't on your credit. Does that mean that the loan is still in your father's name? If that's the case, I would simply give the boat back to him because you cannot afford the payments. That would be difficult for him, probably, but you did cover it for a period of time which helped him out, and it's not your debt.

If you do this, I think it's best to just write off any of the payments you made and not claim any rights to the value of the boat. Consider it a short term lease that you gave back - it would simplify things and lessen tension.

[bcoutsfly]

He gave it to me outright, basically a gift. He didn't need to get rid of the payments or anything of that matter. It was just a simple "you want it, you can have it, just take over the payments and it's yours". The $25k he put into goes with it. Here's a rundown, I looked up the boat and the truck's current market value and what I owe on the two.

Boat - $18,870
NADA = $36,000

Truck - $18,235
KBB = $15,000

If I sale the boat, I'll have enough or close to it to pay off the note on my truck. I can then sell the truck, I'm guessing 12K or 13K if I'm lucky. I'll then buy a used vehicle for 5k, take whats left over and pay my debt off with it.

Does this sound possible?? Or am I dreaming??

[noppenbd]

Not at all, it sounds like a great plan. I thought your debt was only $3500 though? Seems like you should be able to sell the boat, pay off (and keep) the truck, and attack the $3500 with your improved cash flow. You are eliminating $800 a month in payments by paying off both the boat and the truck, so paying off $3500 should only take a few months. Since you already bought the truck and have absorbed the depreciation there may not be a good motivation to sell it at this point if you can be debt free that quickly.

[disneysteve]

Boat - $18,870
NADA = $36,000

Truck - $18,235
KBB = $15,000

If I sale the boat, I'll have enough or close to it to pay off the note on my truck. I can then sell the truck, I'm guessing 12K or 13K if I'm lucky. I'll then buy a used vehicle for 5k, take whats left over and pay my debt off with it.

Does this sound possible?? Or am I dreaming??

Bingo! That's exactly what I suggested above. Go for it.

[bcoutsfly]

When I said debt, I meant what's in collections. I guess in reality it's $40k. As far as my truck goes, I'd like to sell it for something more economical. I'll keep ya'll posted with my progress. I'm pulling the boat out of storage this weekend to detail it and ready it. I'm assuming Ebay, Craigslist, Boat Trader, and a couple of forums I'm a member of will be the best way to sell her?

[disneysteve]

pay off (and keep) the truck, and attack the $3500 with your improved cash flow.

Since you already bought the truck and have absorbed the depreciation there may not be a good motivation to sell it at this point if you can be debt free that quickly.

As far as my truck goes, I'd like to sell it for something more economical.

noppenbd makes a good point. It might be worth keeping the truck if it is paid off. Getting something "more economical" may or may not make sense. You need to really run the numbers on total cost of ownership. I think edmunds.com has data for that. We talked about that on the Prius thread recently.