Car Loan

[disneysteve]

Doesn't fix the issue.

For sure.

[jpg7n16]

I understand what your saying, but he claims that it is only 0% interest for 18 months. My guess is that he won't have it paid off in 18 months, I could be wrong so in the end I wonder what the interest rate bumps up to? 20%?? Doesn't fix the issue.

It does make it better though.

If OP's payment was $470 at 11.25%, it would take 24 months to pay off $10,059.07. 24 * 470 = $11,280 paid to remove 10,059 of debt = $1,220.93 interest

If OP transfers to 0% card, and only pays $200/month for 18 months (which would be dumb, as OP should try to pay much more than that), then card reverts to 20% interest, and they go back to paying $470/month again. - Buys them 18 months of lower payments.

There would be 18 payments of $200 (total 3,600) which lowers the balance owed to 6,459.07. Then at $470 again, it would take 15.7 more payments to remove the balance. 15.7372292 * 470 = 7,396.50

Total paid = 3600 + 7,396.50 = 10,996.50 to remove 10,059.07 = $937.43 interst.


And OP would still come out ahead by about $300.

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But if OP pays $200 for 6 months, then gets a job (which is a really long time to be unemployed), and doubles the payment to $400/month - and just keeps at $400 until card is paid off.

Long story short, OP would pay only $424.59 of interest - and would come out ahead nearly $800.

[iflog]

I'm looking to lower my monthly bills. Paying $200 a month for 18 months saves me $270 a month. After 18 months I hope I have a job and can pay off the remainder of the debt. I know I could refinance for another 5 years at a lower interest rate to lower my payment but who wants to pay for a car for 10 years? I don't want to sell the car because it is in good shape, hasn't cost me anything as far as repairs and I don't think it will anytime soon, plus I will need a good car to get to work when I find it. I have had $1000 beaters in the past and end up spending countless dollars every month to keep them running.

My original post was to lower or eliminate the monthly payment. I have cut my cable bill by $70 a month by eliminating channels I never watched and didn't know I was paying for and by removing long distance on my phone which I never use. I am checking into auto insurance companies to see if I can lower that payment now. Anywhere I can reduce my monthly payment is a help.

Again thanks for all the replies.

[Tree0164]

How about sharing your budget we maybe able to help places that you can cut.

[littleroc02us]

It does make it better though.



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But if OP pays $200 for 6 months, then gets a job (which is a really long time to be unemployed), and doubles the payment to $400/month - and just keeps at $400 until card is paid off.

Long story short, OP would pay only $424.59 of interest - and would come out ahead nearly $800.

Mathematically it may, but not necessarily, what I guess I'm saying is that by all this moving around it doesn't fix the real issue which is the psychology of it all. The problem resides in the fact that he bought a car he couldn't afford and doesn't have a job.

[iflog]

When I purchased the car 3 years ago I was able to afford it as I was working. I even purchased a car for my wife which I have paid off. Due to this crappy economy, high taxed high unemployed state and pathetic government, I have not been able to secure a job after working as a mid level manager for a prominent company that makes millions of dollars a week. I along with about 30 other managers were laid off as part of a company restructure. After working for 25 years successfully at one company and doing quite well I lived a comfortable lifestyle and spent within my means. Once the income stops and your relying on unemployment which pays less than one third of what you were earning you need to make changes. That is what I am looking to do. All I wanted was a little advice on how I should handle the payments on the car I still owe on.

[littleroc02us]

Believe me I know what it's like to go through financial heck. I was laid off twice in 4 years and bought a stupid Dodge Ram thinking it was a good idea. That stupid vehicle lives in my veins forever, but I'm kind of glad because it made me realize never to borrow for a vehicle ever again. I even bought a crappy car to deliver pizzas for a while at the age of 31, I never want to go there again. I would sell the car and buy something cheap until you get back on your feet again.

[iflog]

Selling the car would still leave me with a payment on something I don't own as I would not get as much as I owe. I need a good car for whenever I do get employed. I don't want a piece of crap that I would be sinking money into for repairs constantly (did that for 20 years before I finally bought a new car). Selling the car wont help.

[littleroc02us]

Selling the car would still leave me with a payment on something I don't own as I would not get as much as I owe. I need a good car for whenever I do get employed. I don't want a piece of crap that I would be sinking money into for repairs constantly (did that for 20 years before I finally bought a new car). Selling the car wont help.

Than deliver pizza's or do something for income... Look around the house for things to sell, (Craigslist is my friend) get the car paid off..

[disneysteve]

Selling the car would still leave me with a payment on something I don't own as I would not get as much as I owe.

That's true.

I need a good car for whenever I do get employed.

A "good car" need not cost more than $5,000 and you should be able to find one for less. My 98 Camry is a perfectly good car. It is worth about $3,000 today on the private market. My receptionist just had to do some repair work on the car she bought 3 years ago for $800. That was the first time since owning it that she had to do anything except routine service. My medical assistant makes a 40-45 minute commute each day in her 98 Corolla with over 300,000 miles on it - might be worth $1,000 or so.

Selling the car wont help.

It will help more than not selling it.

[bjl584]

When I purchased the car 3 years ago I was able to afford it as I was working. I even purchased a car for my wife which I have paid off. Due to this crappy economy, high taxed high unemployed state and pathetic government, I have not been able to secure a job after working as a mid level manager for a prominent company that makes millions of dollars a week. I along with about 30 other managers were laid off as part of a company restructure. After working for 25 years successfully at one company and doing quite well I lived a comfortable lifestyle and spent within my means. Once the income stops and your relying on unemployment which pays less than one third of what you were earning you need to make changes. That is what I am looking to do. All I wanted was a little advice on how I should handle the payments on the car I still owe on.

I'd have to say this situation makes a convincing argument for having an Emergency fund in place to get you through the tough times.

It also makes a convincing argument against financing things. Thinking in terms of monthly payment instead of overall cost of ownership will get you where you have found yourself if the income stream gets cut off.

The economy is bad, but that is reality. Blaming everything else for it won't help. If you can't find a job in your field, then go get any job. Something is better than nothing. Retail, pizza man, etc.

You are now in a position where selling the car is your only real option. Even if you still owe money after it is gone, you will still be further ahead than you are now. I would dump the car, and get into something for cash. Then, moving forward start to build a solid EF so this situation doesn't happen to you again.