Author Topic: 2014 car loan elimination plan  (Read 2482 times)

payitoff

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2014 car loan elimination plan
« on: January 15, 2014, 02:12:26 PM »
we have a gas guzzler that we still owe about $14K @ $430/month. im getting tired of how to solve this issue, since were about $6k upsidedown, very costly with gas, even if we pay it off, it will not be worth it. so here' my plan, and i need your insights if this is a good idea:

we dont currently have savings to pay for a car in cash so this means we have to start saving for it. as per Dave Ramsey, if we save $400 for 10 months, we will be able to get a decent car, so with that in mind,

we are planning to not pay the truck for the next 90 days, so thats $1290, plus set aside another $400 per month for 3 months, which equals to $2580, we will voluntary return the car by then and eat up the hit on our credit, take the bus or carpool together, we will continue saving $830 on month 4 and so on until we find a car we could buy with the money we have saved.

currently, we have a combined income of about $7500/month and budgeted $6300, we were planning to put extra towards debt repayment but we'd like to set aside the $400 towards this project.

Thoughts?

randymarsh

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Re: 2014 car loan elimination plan
« Reply #1 on: January 15, 2014, 02:24:04 PM »
Probably a dumb question, but could you just spend less money and save up for a car much faster? Are most of your expenses fixed like a mortgage and hard to get rid of?

sulaco

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Re: 2014 car loan elimination plan
« Reply #2 on: January 15, 2014, 02:26:12 PM »
By gas guzzler you mean (in terms of MPG)? How much have you already spent on the car? That's already lost money. Do you still have a warranty on the car? How much do you drive per month?

When you say you're upside down $6K, do you mean you owe $14K, but the car is only work $8K? Some quick back of the envelope math gives me a car which cost around $24K to purchase two years ago. Having just bought a used 2011, I cannot fathom a car of that vintage and original cost being worth only $8K (at least not in the categories we were looking, maybe there is another class of ultra-depreciating cars). My 2005 Scion has nearly that value and it cost much less than $24K when I bought it new 8 years ago.

$6,300/month is a lot of money. Maybe you should start with a budget evaluation and look at defaulting on your debt after you've taken an inventory of your outflow.

payitoff

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Re: 2014 car loan elimination plan
« Reply #3 on: January 15, 2014, 02:30:13 PM »
Probably a dumb question, but could you just spend less money and save up for a car much faster? Are most of your expenses fixed like a mortgage and hard to get rid of?

we can stop paying extras on other bills and save the $1000 + $430

yes, those are fixed expenses, and all minimum payments for loans like the student loan which occupies the biggest share. in april, we will free up another $450 from our expense coz we will pay off one of the loans we have. so that will be $1880 for the month of April.
i just cant wait till April to make a decision, i just feel like were wasting the $430 per month knowing that we want to get rid of this truck..

payitoff

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Re: 2014 car loan elimination plan
« Reply #4 on: January 15, 2014, 02:32:32 PM »



we owe a total of $14k, its a 2008 durango which based on KBB is only worth $8k now,

Jags4186

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Re: 2014 car loan elimination plan
« Reply #5 on: January 15, 2014, 02:56:22 PM »
What other debts do you have?  You can't service a $430/month debt payment with $7500 income?

Something seriously wrong here. You both make around 60k a year.  Why put yourself so far behind the 8 ball by taking a credit hit and then getting sued for the difference after the bank sells the car at a fire sale price.

Take out a personal loan from the bank for 10k. Sell the car. Buy a small gas efficient 4k car. Pay the  bank back.
« Last Edit: January 15, 2014, 02:58:18 PM by Jags4186 »

OllieBiser

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Re: 2014 car loan elimination plan
« Reply #6 on: April 25, 2014, 12:18:30 AM »
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