Author Topic: Help me get rid of this car?  (Read 2359 times)

Level1Engineer

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Help me get rid of this car?
« on: May 31, 2013, 01:49:51 PM »
Hey everyone, I need some advice on how to get out from under a large car loan.

First let me explain how I got there (if you care). Last year I took my car (2006 Chevy Malibu, paid off) in to Big O Tires to get an oil change and an alignment. The car came out of the shop in worse shape than when it went in. It now pulled hard to the left when accelerating or travelling at high speeds. I had several hundred dollars more work done to try fixing the problem (replaced struts, another alignment and other work done at a GM certified dealership) and when all was said and done we decided to get another car because my wife didn't feel safe driving in the car (hell, I still don't feel safe driving the car). So we bought a second car, a 2011 Chevy Impala. Financed $18k in May 2012.

We definitely could have and should have gotten something cheaper and saved up for it; but I guess when you are a year out of school and get your first raise at work you make stupid mistakes (lame excuse, I know). But wait, there's more! And it gets worse.

So come November I get a new job and another raise. And I decide that we need to upgrade to an SUV because we have a second child on the way. So we trade in the Impala (we owed $16k and got $13k on the trade in, so tack that -$3k onto the new loan) and financed a 2012 Chevy Traverse (can you tell I like a cetain car maker?) for $29.5k. Fuck me, right?

In January I started reading MMM and things just clicked. Since then I have paid off over $10k in debt and we are on track to be debt free in about two more years (~$36k in student loans and ~$28.5k left on that car loan) and that car loan is where I know I can make a huge impact; I just need to figure out the best way to handle dumping the car and getting reliable transportation.

We can easily be a 1-car household. My job is a 35 mile commute one way (closest city is 25 miles away from my job site) but my employer has a shuttle service that I use every day, so the Malibu is only used about 4-6x per month (at most) when I have to work an off shift or go in late to work. According to KBB the most I could get for the Traverse through private party sale would be ~$23.5k, meaning I have to come up with ~5k to cover the negative equity. I am in debt payoff mode right now, so I only have $1k in savings and I don't want to tap my retirement accounts unless it was a life or death situation. So should I look at getting a personal loan through my credit union? Other options?

And then there is the reliable transportation issue. We kind of live in the middle of no where and if it was just the wife and I, we could probably get by with no car at all, but we have a 2-year-old and a 2-month-old. The oldest always wants to go to the park and there are no parks within walking distance of our apartment. Same with taking them (especially the little one) to their checkups. The doctor's office is a few miles away. So my first thought would be to try getting the Malibu fixed, but I don't know how much more that is going to cost or how I'm going to find a place that can fix it (obviously less expensive than continuing to pay for the Traverse). The second option would be to sell the Malibu for whatever I can get and buying an older Honda for a couple grand. Anything else I could do?

Anyway, thanks for reading and please, don't hold back questions/criticism. I need to hear it. And hopefully I can get some good advice out of this.

SnackDog

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Re: Help me get rid of this car?
« Reply #1 on: May 31, 2013, 02:44:53 PM »
Depending on the vehicle, where and when you are selling it and probably a few other variables, KBB, Nada and Edmunds can be great or useless sources of information on pricing.   How about just put the car on Craigslist (or other equivalent) for what you need for it and see if anyone bites?  If someone comes along and low-balls you, work out a deal at a fair price then ask if you can make payments to them for the difference if the sales price has you under water.  What do you have to lose?

urover

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Re: Help me get rid of this car?
« Reply #2 on: June 01, 2013, 12:45:47 AM »
I think it is excellent that you now see how wasteful your previous spending behavior was. That is the first step towards FI anyway!

The Chevy Malibu, did you buy that new or used? If used, there could be other issues lurking without you being aware of them. What exactly is the problem with it now and what is it doing in your parking lot? Did you try asking an independent mechanic to give it a check? If it won't cost you several thousand dollars to fix it, I'd suggest you get the Malibu repaired instead of selling that off to get a cheap used Honda because you never know what problems might crop up in that used Honda (been there, experienced that). The repairs might actually extend the life of the vehicle by several years if done properly.

The SUV is surely overkill for a family of 4 so you have to get rid of it as soon as possible. Whatever you have already paid, and what you will lose out in the deal (the difference with how much you still owe) are sunk costs so don't bother with it. Leave them in the past.

Put the SUV up for sale and try talking to your car loan provider if they'd be OK if you paid the rest off in instalments. If they insist you have to make a full payment to close the loan account, see if they're OK with you continuing the payments even without the car with you.

Or you can try if your employer can give you an advance salary (if you've been with them long enough they may consider) or loan from friends or family.

But the SUV must go. Any more delay will mean a further loss in car value due to depreciation.

All the best, don't go too hard on yourself for your past mistakes and let us know how you come out of this.

« Last Edit: June 01, 2013, 12:53:46 AM by vsanjay »