Author Topic: Help Me Stop the Bleeding!  (Read 2820 times)

Koastie57

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Help Me Stop the Bleeding!
« on: July 07, 2016, 11:46:32 AM »
Hello,

I've been following MMM for a little over a year now and made a lot of positive financial adjustments over the past 12 months. Despite this mistake i'm about to discuss, I feel like I've done well planning for retirement. At 25 years old I've managed to stack away $50K in savings/401K with only $9K in debt which i'll illustrate here in a minute. My objective is to tackle my automobile situation. This is probably the biggest financial mistake I've made in my 25 years on this earth.

Right after college (2013) I purchased a 2009 chevy Tahoe LTZ 4WD. On top of that I financed it. My reasoning? I had access to a wakeboard boat free of charge if I could tow it (a huge hobby of mine as a kid), I constantly was going on road trips with friends, I needed a somewhat nice car for work (my company's requirement not mine), and I've always wanted to drive a Tahoe. If I could take it back I would but we can't time travel. I just need to stop the bleeding.

Current Situation:

I'm a 25 year old working with a job making 50s salary. I am single with no family. I commute about 24 miles round trip everyday. I travel ALOT for work in my personal auto so ditching a car completely is not realistic for my situation. I drive clients around as I am in commercial real estate, so I'm not sure my company would be cool with me driving around a total beater car either (although I would be fine with it).

The Automobile:

2009 Black Chevrolet Tahoe LTZ 4WD (fully loaded)
Mileage: 93,000. I put 60,000 miles on it since I purchased it 3.5 years ago.
Condition: Fair
Chevrolet Tahoe LTZ 4WD fully loaded.

The loan balance on the car is now $9,000. My monthly payment is $570. 3% interest rate.

Obviously, all in all it's been a horrible financial decision.

My questions are:

Do I sell the car and downgrade to something more reasonable?
Or do I keep the car and pay off the balance and run the car until around 200,000 miles and then sell it?

Look forward to your advice/comments.
I'm learning a hard lesson.

Thanks,
« Last Edit: July 07, 2016, 12:05:01 PM by Koastie57 »

Tester

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Re: Help Me Stop the Bleeding!
« Reply #1 on: July 07, 2016, 12:07:39 PM »
Hello,

I've been following MMM for a little over a year now and made a lot of positive financial adjustments over the past 12 months. Despite this mistake i'm about to discuss, I feel like I've done well planning for retirement. At 25 years old I've managed to stack away $50K in savings/401K with only $9K in debt which i'll illustrate here in a minute. My objective is to tackle my automobile situation. This is probably the biggest financial mistake I've made in my 25 years on this earth.

Right after college (2013) I purchased a 2009 chevy Tahoe LTZ 4WD. On top of that I financed it. My reasoning? I had access to a wakeboard boat free of charge if I could tow it (a huge hobby of mine as a kid), I constantly was going on road trips with friends, I needed a somewhat nice car for work (my company's requirement not mine), and I've always wanted to drive a Tahoe. If I could take it back I would but we can't time travel. I just need to stop the bleeding.

Current Situation:

I'm a 25 year old working with a job making 50s salary. I am single with no family. I commute about 24 miles round trip everyday. I travel ALOT for work in my personal auto so ditching a car completely is not realistic for my situation. I drive clients around as I am in commercial real estate, so I'm not sure my company would be cool with me driving around a total beater car either (although I would be fine with it).

The Automobile:

2009 Black Chevrolet Tahoe LTZ 4WD (fully loaded)
Mileage: 93,000. I put 60,000 miles on it since I purchased it 3.5 years ago.
Condition: Fair
Chevrolet Tahoe LTZ 4WD fully loaded.

The loan balance on the car is now $9,000. My monthly payment is $570.

Obviously, all in all it's been a horrible financial decision.

My questions are:

Do I sell the car and downgrade to something more reasonable?
Or do I keep the car and pay off the balance and run the car until around 200,000 miles and then sell it?

Look forward to your advice/comments.
I'm learning a hard lesson.

Thanks,

Without more financial information I will only ask one question.
You say that your company requires you have a nice car.
And your work also requires to drive people around in your personal car.
Does your company compensate for this in any way?
What if instead of the Tahoe which costs you 570/month only in loan payment you get another car which costs you less - does your company remove some of your paycheck?


Other questions:
The loan balance is 9000, what is the car worth?
What is the interest rate on the loan?
Do you still tow the wakeboarding boat, and it the access to it still free?
Do you still go on road trips? Although a road trip does not mean a Tahoe, it might mean you have to only look for some types of cars, not for all.
Do you still want to drive the Tahoe? Did 3 years of driving it remove the desire to drive a Tahoe? I mean, you drove a Tahoe, if you change it to something else would the "want" come back?

notactiveanymore

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Re: Help Me Stop the Bleeding!
« Reply #2 on: July 07, 2016, 12:11:25 PM »
When I put this info into KBB, I get a private sale value of at least 18k. That's with a listing a "Fair Condition".

With that in mind, I would absolutely sell the Tahoe and buy something else with the profit. If you want to get something nicer than 9k will buy, see what else you can save for a couple months while you have it listed. You can get a very good condition car with good gas mileage and sub 40 miles for 10k.

As a side note, I always wonder what people imagine when they think of a "beater car". My husband's 2000 Chevy Malibu was purchased for $2500 back in 2014 and it is in just fine condition. Sure it's not a trendy style or whatever, but it's got no body damage and the cloth seats are clean. If he needed to drive clients around for work, all it would take is a regular vacuuming and wipe down in order to present very well. IDK, just seems like a cop out people frequently use when disparaging the beater cars.

Koastie57

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Re: Help Me Stop the Bleeding!
« Reply #3 on: July 07, 2016, 12:47:56 PM »
Hello,

I've been following MMM for a little over a year now and made a lot of positive financial adjustments over the past 12 months. Despite this mistake i'm about to discuss, I feel like I've done well planning for retirement. At 25 years old I've managed to stack away $50K in savings/401K with only $9K in debt which i'll illustrate here in a minute. My objective is to tackle my automobile situation. This is probably the biggest financial mistake I've made in my 25 years on this earth.

Right after college (2013) I purchased a 2009 chevy Tahoe LTZ 4WD. On top of that I financed it. My reasoning? I had access to a wakeboard boat free of charge if I could tow it (a huge hobby of mine as a kid), I constantly was going on road trips with friends, I needed a somewhat nice car for work (my company's requirement not mine), and I've always wanted to drive a Tahoe. If I could take it back I would but we can't time travel. I just need to stop the bleeding.

Current Situation:

I'm a 25 year old working with a job making 50s salary. I am single with no family. I commute about 24 miles round trip everyday. I travel ALOT for work in my personal auto so ditching a car completely is not realistic for my situation. I drive clients around as I am in commercial real estate, so I'm not sure my company would be cool with me driving around a total beater car either (although I would be fine with it).

The Automobile:

2009 Black Chevrolet Tahoe LTZ 4WD (fully loaded)
Mileage: 93,000. I put 60,000 miles on it since I purchased it 3.5 years ago.
Condition: Fair
Chevrolet Tahoe LTZ 4WD fully loaded.

The loan balance on the car is now $9,000. My monthly payment is $570.

Obviously, all in all it's been a horrible financial decision.

My questions are:

Do I sell the car and downgrade to something more reasonable?
Or do I keep the car and pay off the balance and run the car until around 200,000 miles and then sell it?

Look forward to your advice/comments.
I'm learning a hard lesson.

Thanks,

Without more financial information I will only ask one question.
You say that your company requires you have a nice car.
And your work also requires to drive people around in your personal car.
Does your company compensate for this in any way?
What if instead of the Tahoe which costs you 570/month only in loan payment you get another car which costs you less - does your company remove some of your paycheck?


Other questions:
The loan balance is 9000, what is the car worth?
What is the interest rate on the loan?
Do you still tow the wakeboarding boat, and it the access to it still free?
Do you still go on road trips? Although a road trip does not mean a Tahoe, it might mean you have to only look for some types of cars, not for all.
Do you still want to drive the Tahoe? Did 3 years of driving it remove the desire to drive a Tahoe? I mean, you drove a Tahoe, if you change it to something else would the "want" come back?

Yes my company compensates me about $0.58/per mile. My company doesn't remove anything from my paycheck for expenses on behalf of an automobile.


1. Car is probably around $18K from KBB which I forgot to add in my initial post. It looks like "theotherrelise" also found the same value when he/she checked.
2. 3% interest rate on the loan
3. The wakeboarding boat is no longer an option as of 2 months ago.
4. Road trips still happen. Willing to consider a different car that can serve the same purpose.
5. I do love the Tahoe. It's been a great car, it's only when I look back at the $numbers$ that I cringe and get a since of regret. If I parted with it I would not cave and re-buy it unless I came across a smart deal.

"theotherrelise" - I may consider selling it/trading it in for a cheaper/more efficient alternative.

ShoulderThingThatGoesUp

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Re: Help Me Stop the Bleeding!
« Reply #4 on: July 07, 2016, 12:56:45 PM »
Plug-in hybrids seem to usually have big deltas between their initial price and their off-lease price, and they seem to generally be built to 'luxury' buyers' tastes. You can get a nice-feeling car with leather seats and fancy gimmicks with fantastic MPG to make the most of that $0.58/mile.

Jack

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Re: Help Me Stop the Bleeding!
« Reply #5 on: July 07, 2016, 01:11:37 PM »
Swap the Tahoe for a 10+ year old Acura or Lexus midsize sedan (the older the better, as long as it's in good condition -- even something like an early-'90s Acura Legend would be fine), or a 5+ year old Acura or Lexus hybrid sedan or hatchback (e.g. CT200h) if and only if you can find one for a good price.

Sibley

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Re: Help Me Stop the Bleeding!
« Reply #6 on: July 07, 2016, 01:25:17 PM »
I would sell it, buy a used car that's in good condition to satisfy your work. Get something with good gas mileage, as you'll stretch the mileage reimbursement you get.

And honestly, that is not the worst financial decision you could have made in your life, so you're in good shape overall.

lbmustache

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Re: Help Me Stop the Bleeding!
« Reply #7 on: July 07, 2016, 01:48:20 PM »
Swap the Tahoe for a 10+ year old Acura or Lexus midsize sedan (the older the better, as long as it's in good condition -- even something like an early-'90s Acura Legend would be fine), or a 5+ year old Acura or Lexus hybrid sedan or hatchback (e.g. CT200h) if and only if you can find one for a good price.

Ct200h is kind of small for carting around adults all the time, but doable and nice enough quality. I also second an Acura - they tend to be a bit cheaper on the used market but are still pretty nice. 2005-2010 (depending on model) Acura's will generally be around $11k with less than 100k miles. Even a higher trim (hybrid?) Camry or Accord would not be bad (aka not the base one with steel wheels, although those could be swapped out).

I would sell the Tahoe and figure out how much you want to spend on your next car - do you want to walk away with no payment, a small payment, or perhaps take $1-2k out of savings? Or just spend the $8-9k you'd get back from the Tahoe?

frugaliknowit

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Re: Help Me Stop the Bleeding!
« Reply #8 on: July 07, 2016, 02:00:55 PM »
You don't need a fancy car to sell real estate.  I know this because I used to sell (for a year I did only commercial).  All that is required is:

1.  It's kept clean and mostly free of major damage.
2.  It's roomy enough (mostly applies to residential real estate where you might have kids, but usually no more than one or 2 persons).  A Prius is roomy enough.  A Smart Car is not...

Sure your company prefers Mr. Fancypants cars as everything else being equal, it's better for their image.  The reality is, your clients don't care, as long as it's not a dirty shitbox.  Many times (especially with commercial), they meet you there...

Besides, the smart clients may think you're a nit wit tearing up a Mr. Fancypants car to impress them. 

Think used:  Prius, Accord, Camry or even Civic, Corolla, Escort.
« Last Edit: July 07, 2016, 02:05:39 PM by frugaliknowit »

ohsnap

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Re: Help Me Stop the Bleeding!
« Reply #9 on: July 07, 2016, 02:24:13 PM »
I'm puzzled as to why you're beating yourself up so badly over this.  You referred to it as "bleeding," "the biggest financial mistake I've made in my 25 years on this earth," "a horrible financial decision," and a "hard lesson."

You bought a car that for 3.5 years you've used a LOT for work (reimbursed miles) and fun (boating and trips with friends).  Now that you don't need this type of vehicle, you can still sell it for far more than you owe.  Even though the payment is relatively high, it fit easily into your budget (as demonstrated by the $50k in savings you've accumulated during that time).

Now that you don't have access to the boat, I agree it's too much vehicle and you should get something more economical (a decent late-model Camry for work?).  But I don't see this as something to cry bitter tears over.

ohsnap

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Re: Help Me Stop the Bleeding!
« Reply #10 on: July 07, 2016, 02:29:40 PM »
...
Besides, the smart clients may think you're a nit wit tearing up a Mr. Fancypants car to impress them. 
...

And a too-nice car can even be off-putting, depending on the client.  A while back my husband worked with a guy whose clients were all churches and non-profits.  The president of the company got an ear-blistering call one time from a client who was pissed that the salesman showed up in a brand-new Hummer!