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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: JordanOfGilead on April 10, 2015, 06:17:58 PM

Title: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on April 10, 2015, 06:17:58 PM
I want to start out with the disclaimer that cars are my vice. I love driving them. I love working on them.
Some people spend money on drugs and alcohol. Some people spend money on improvements around the house house. I enjoy cars. (I am not making this comparison to suggest that these things provide equal virtue in one's life, of course.)
When I sat in this car for the first time at the dealership it fit me perfectly and I fell absolutely in love. It is with extreme pain that I admit this purchase may have been a mistake.
I even consider sucking up the debt and keeping it just for shits and giggles, but then I look at the numbers and realize that keeping this car will add 17 months to my working career and I begin to second-guess whether a car is worth almost a year and a half of my freedom, but then I take it for a drive and my feelings swing back towards keeping it. The whole idea is to seek out happiness, and driving this car makes me genuinely happy, but forking over 18% of my take-home every month doesn't.

Now for the story:
I made the mistake of financing a car worth about 50% of my annual salary after I graduated from college. The loan is for 60 months with payments just shy of $600/month.
9 of these months have passed already. I started reading MMM early last month and realized I may have made a grave mistake.
I have a couple other low-interest debts, and want to escape debt as early as possible, but I have a couple of reservations when it comes to my car.
First, the market value of my car is about 5000 less than what I still owe on it. If I sell the car and use 100% of what I get from it to pay off the loan, I will still have paid $5400 and owe the remainder of the loan and be left with nothing to show for it.
Second, I'm not sure what the procedure would be (in Ohio) for selling a car that I don't technically own yet. I'm sure I could give it up to a dealership as a trade-in (for a price), but if I do that, the value is 2500 less than private party value and I would still be trapped into financing a car from a stealership. Naturally, my preference would be to sell it in a private transaction, but I have my reservations about doing that considering that the large amount of money that would be changing hands would produce a potentially very dangerous situation.

Then there is the issue of what to do with the money if I do manage to sell it. My first thought was to apply it to my loan that I took out to buy the car in the first place, but then I got to thinking about how MMM encourages paying off your highest interest loan first. My student loans have about double the interest rate of my car loan with roughly the same balance. To apply the money from the car to my student loans and be done with those sooner would be the obvious solution from a strictly financial standpoint, but I also have to take into account any penalties that may come about from me actually not owning the car any more and how those would affect the status and interest rate on my auto loan. Again, my ignorance in the matter is playing into the hands of the bankers quite nicely.

Any suggestions on how to proceed or even where to start doing research so that I can make a better informed decision would be appreciated. I have been putting it off for over a month now trying to decide what to do, and I need to make a decision sooner than later.

Title: Re: How do I save myself from a past financing mistake?
Post by: Sibley on April 10, 2015, 06:35:29 PM
If you trade it into the dealership for a more reasonably priced car (new or used, I'm not sure how that would work), then any excess of the loan over the trade-in value would be added to the loan on the new car. You'd end up with less debt and probably a lower payment.
Title: Re: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on April 10, 2015, 06:41:35 PM
There are few new cars I would enjoy driving that would come out with less overall debt than my current balance, but it is a possibility. I would still like to get rid of it completely and buy something in the $4000 range.

Regarding the lower payment, that is unlikely considering the fact that my credit score has taken a hit due to my own irresponsibility in making timely payments.
The loan can't be set to be paid automatically and there is no option to pay online without having my money put into a checking account held by the credit union that owns the loan first, so the most convenient way to pay it is to drive to the bank and hand them a check. In my lazier days, I found this to be a chore and often put it off to the last minute, sometimes later than the due date figuring, "hey, there's no late fee."

I now know that it severely injures your credit score to miss payments like that, and I will not be making that mistake again.
Unfortunately, I have to re-build my credit if I want to get a rate down near where my current loan is.
Title: Re: How do I save myself from a past financing mistake?
Post by: Sibley on April 10, 2015, 07:04:35 PM
Ok, you really need to stop the late payments. Set reminders on your calendar if you need to, but do some thing that works.

And you don't really have to like it much, it just needs to be cheap.

Or go find an old Miata for a couple thousand and see if you can do the trade using it. I understand it's quite popular with car guys.
Title: Re: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on April 10, 2015, 07:58:29 PM
Miatas are in the 6000 range for a rusty one with high-miles around here, but the idea could be equally applied to another model.

The late payments are a thing of the past. I have taken control of my finances over the past month and a half and am now in the clean-up stage, trying to get rid of the mess that past me left in his wake.
Title: Re: How do I save myself from a past financing mistake?
Post by: JLee on April 10, 2015, 08:46:30 PM
Miatas are in the 6000 range for a rusty one with high-miles around here, but the idea could be equally applied to another model.

The late payments are a thing of the past. I have taken control of my finances over the past month and a half and am now in the clean-up stage, trying to get rid of the mess that past me left in his wake.
Then find one from outside your area - I've gone out of state for a vehicle five times. :P  As another car guy ('91 MR2 turbo), do you mind if I ask what you bought?

Regarding payments - a lot of banks/credit unions have bill pay as an option (where they will mail a check for you for free). You can schedule payments/etc through that.
Title: Re: How do I save myself from a past financing mistake?
Post by: act01 on April 10, 2015, 08:57:42 PM
I want to start out with the disclaimer that cars are my vice. I love driving them. I love working on them.
Some people spend money on drugs and alcohol. Some people spend money on improvements around the house house. I enjoy cars. (I am not making this comparison to suggest that these things provide equal virtue in one's life, of course.)
...and some people enjoy saving money (they love doing it, and they love working on it). Who said you need to spend anything for it to be a vice? :)
Title: Re: How do I save myself from a past financing mistake?
Post by: turneja6535 on April 10, 2015, 10:17:41 PM
Unfortunately, I'm not sure you have a lot of options.  You owe more on the car than what it is worth and it doesn't sound like you have the savings to make up the difference.  You can't sell the car and not pay off the loan like you think.  The bank has the title to the car and they will not release it to you without first getting paid in full.  You can't sell it to a 3rd party unless they pay you what you owe the bank, or you are prepared to make up the difference.  One option mentioned was to trade it in.  You could look into that, but I would be surprised if that was an even an option.  Most banks have a limit on what they will loan for a car based on what is worth, and rolling $5000 or more of negative equity into a $4000 car that you want, probably can't be done.  This option has been made even worse by damaging your credit worthiness in the process.

Sorry to be the bearer of bad news.  My advice would be to keep making the payments and on time!  Rebuild your credit and seperately save the $4000 for your next car.  When you reach the point the car is worth what you owe, sell it and pay off the loan.  Buy your $4000 car with cash because you either won't get a loan or the interest will be high until you repair your credit.  Live and learn.
Title: Re: How do I save myself from a past financing mistake?
Post by: HairyUpperLip on April 10, 2015, 10:20:35 PM
Miatas are in the 6000 range for a rusty one with high-miles around here, but the idea could be equally applied to another model.

The late payments are a thing of the past. I have taken control of my finances over the past month and a half and am now in the clean-up stage, trying to get rid of the mess that past me left in his wake.
Then find one from outside your area - I've gone out of state for a vehicle five times. :P  As another car guy ('91 MR2 turbo), do you mind if I ask what you bought?

Regarding payments - a lot of banks/credit unions have bill pay as an option (where they will mail a check for you for free). You can schedule payments/etc through that.

also curious as a guy, haha ,.,..
Title: Re: How do I save myself from a past financing mistake?
Post by: MsPeacock on April 11, 2015, 04:51:46 PM


Sorry to be the bearer of bad news.  My advice would be to keep making the payments and on time!  Rebuild your credit and separately save the $4000 for your next car.  When you reach the point the car is worth what you owe, sell it and pay off the loan.  Buy your $4000 car with cash because you either won't get a loan or the interest will be high until you repair your credit.  Live and learn.

+1

I assume you've now set up automatic payments on all your debts so that you won't make late payments. Either sell this car as recommended above once you are no longer under water, or commit to driving it until it is 10 or 15 years old and has 200k miles on it.
Title: Re: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on April 21, 2015, 04:26:13 PM
Miatas are in the 6000 range for a rusty one with high-miles around here, but the idea could be equally applied to another model.

The late payments are a thing of the past. I have taken control of my finances over the past month and a half and am now in the clean-up stage, trying to get rid of the mess that past me left in his wake.
Then find one from outside your area - I've gone out of state for a vehicle five times. :P  As another car guy ('91 MR2 turbo), do you mind if I ask what you bought?

Regarding payments - a lot of banks/credit unions have bill pay as an option (where they will mail a check for you for free). You can schedule payments/etc through that.

It's a 2014 Hyundai Genesis Coupe 3.8 r-spec. 348hp at the crank, 295ft-lbs of torque pushed to the rear wheels through a 6spd manual gearbox and limited-slip diff.



Sorry to be the bearer of bad news.  My advice would be to keep making the payments and on time!  Rebuild your credit and separately save the $4000 for your next car.  When you reach the point the car is worth what you owe, sell it and pay off the loan.  Buy your $4000 car with cash because you either won't get a loan or the interest will be high until you repair your credit.  Live and learn.

+1

I assume you've now set up automatic payments on all your debts so that you won't make late payments. Either sell this car as recommended above once you are no longer under water, or commit to driving it until it is 10 or 15 years old and has 200k miles on it.

I have all of my debts set to auto pay except this one. I only have the minimum $5 in the account I have with the credit union that issued the loan and my bank charges a monthly fee to have the option for them to automatically send out a check. I've just gotten in the habit of making my payments about a week early.

I also got lucky recently and came into about $3000 of unanticipated income that will be put towards buying a fuel efficient daily driver for me to take to and from work. My expensive sporty car will be well-kept with low miles as a weekend car until it is paid off, at which point it will likely be sold. I also have a suspended license due to an excessive number of speeding tickets, so it's not like I can drive anywhere other than to and from work for the next few months anyway. But hey, at least I finally have that motivation to ride my bike more.
Title: Re: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on November 12, 2015, 06:07:36 AM
An update for anybody that still remotely cares:

Used the 3k to buy myself a 1998 Honda civic LX and my wife a 1987 Honda Rebel 250cc (she didn't have a car at the time). She was able to get to and from work at 60mpg and I was doing so at about 33. I traded in the wasteful genesis coupe for a 2016 scion tC with all the goodies I wanted on it without adding to my debt. Hopefully Toyota's reputation for reliability holds out.
Now that I have a car that can be driven in the winter, I am looking to sell my civic. My wife is also trying to sell her rebel since she bought a 94 civic as a "daily project" (combination of daily driver and project car. Bad idea, I know, but it could be worse). The debt is still there, but now I'm not stuck with something that is unusable 4 months out of the year and only gets 24mpg highway the other 8.
Title: Re: How do I save myself from a past financing mistake?
Post by: ooeei on November 12, 2015, 06:25:25 AM
An update for anybody that still remotely cares:

Used the 3k to buy myself a 1998 Honda civic LX and my wife a 1987 Honda Rebel 250cc (she didn't have a car at the time). She was able to get to and from work at 60mpg and I was doing so at about 33. I traded in the wasteful genesis coupe for a 2016 scion tC with all the goodies I wanted on it without adding to my debt. Hopefully Toyota's reputation for reliability holds out.
Now that I have a car that can be driven in the winter, I am looking to sell my civic. My wife is also trying to sell her rebel since she bought a 94 civic as a "daily project" (combination of daily driver and project car. Bad idea, I know, but it could be worse). The debt is still there, but now I'm not stuck with something that is unusable 4 months out of the year and only gets 24mpg highway the other 8.

So you finally managed to get rid of the expensive wasteful new car, bought an old reliable model, and then turned around and bought a brand new 2016 car because winter?  So basically you did nothing about the debt and now have 2 cars instead of one.  What happened?
Title: Re: How do I save myself from a past financing mistake?
Post by: HairyUpperLip on November 12, 2015, 07:39:34 AM
So you finally managed to get rid of the expensive wasteful new car, bought an old reliable model, and then turned around and bought a brand new 2016 car because winter?  So basically you did nothing about the debt and now have 2 cars instead of one.  What happened?

I am confused too.

So now you have a

1998 Honda Civic
1987 Honda Rebel
2016 Scion tC
1994 Honda Civic

What was your goal again?

I want to start out with the disclaimer that cars are my vice. I love driving them. I love working on them.
Some people spend money on drugs and alcohol. Some people spend money on improvements around the house house. I enjoy cars. (I am not making this comparison to suggest that these things provide equal virtue in one's life, of course.)

As a car enthusiast I'm confused even more after re-reading your first post.

What exact automotive thrills do you get out of a Scion tC?

I would suggest selling the Scion.
Keep the Rebel and 2 Civic's.
Use the '94 Civic as the winter car.


good luck!
Title: Re: How do I save myself from a past financing mistake?
Post by: humbleMouse on November 12, 2015, 08:03:29 AM
An update for anybody that still remotely cares:

Used the 3k to buy myself a 1998 Honda civic LX and my wife a 1987 Honda Rebel 250cc (she didn't have a car at the time). She was able to get to and from work at 60mpg and I was doing so at about 33. I traded in the wasteful genesis coupe for a 2016 scion tC with all the goodies I wanted on it without adding to my debt. Hopefully Toyota's reputation for reliability holds out.
Now that I have a car that can be driven in the winter, I am looking to sell my civic. My wife is also trying to sell her rebel since she bought a 94 civic as a "daily project" (combination of daily driver and project car. Bad idea, I know, but it could be worse). The debt is still there, but now I'm not stuck with something that is unusable 4 months out of the year and only gets 24mpg highway the other 8.

So you finally managed to get rid of the expensive wasteful new car, bought an old reliable model, and then turned around and bought a brand new 2016 car because winter?  So basically you did nothing about the debt and now have 2 cars instead of one.  What happened?

Yeah, I am not making sense out of this either.  I liked the part about about the civic lx.... but unsure as to why you bought the scion.
Title: Re: How do I save myself from a past financing mistake?
Post by: RWD on November 12, 2015, 08:42:14 AM
I traded in the wasteful genesis coupe for a 2016 scion tC with all the goodies I wanted on it without adding to my debt.

Are you sure you didn't add to your debt? KBB estimates the trade-in value of your Genesis at $20k and the 2016 tC starts at $21k before taxes, fees, and "goodies". Do you mean that your payment didn't go up? Because it's easy for the dealership to lower the monthly payment by just increasing the number of payments.
Title: Re: How do I save myself from a past financing mistake?
Post by: HairyUpperLip on November 12, 2015, 08:59:59 AM
An update for anybody that still remotely cares

Everyone on this forum cares.

In fact, I would say a lot of us get excited when someone comes back and posts an update to their case study/problem/situation.

Everyone has problems. It's nice to see people resolve them as well.

You can only lead the horse to the water, right?
Title: Re: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on November 12, 2015, 09:02:49 AM
With everything I wanted on the tC, the price came out to 21,117. They offered me 20k for the genesis, which I was able to negotiate to 20,500 because it only had a little over 12,000 miles on it. The increase was nearly negligible, my interest rate dropped by 1%, and my monthly "required" payment went down (because they added a year to the length of my loan). I am still paying significantly more than the minimum each month and as soon as I sell my civic, I will be putting 100% of the proceeds into paying off student loan debt (sits at 6% interest as opposed to the 1.9% of the car). I am saying that the ~$600 increase wasn't an increase because I have assets that can be liquidated for more than that which weren't able to be liquidated before the trade.

It isn't MUCH better of a situation, but I freed up driveway space, significantly reduced the future cost of gas and maintenance, and became more flexible with my transportation options during the winter and the cost pretty much comes out to one month's payment. I'm feeling like this is about as good of a recovery as I could have made in my situation.
Title: Re: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on November 12, 2015, 09:04:28 AM
An update for anybody that still remotely cares

Everyone on this forum cares.

In fact, I would say a lot of us get excited when someone comes back and posts an update to their case study/problem/situation.

Everyone has problems. It's nice to see people resolve them as well.

You can only lead the horse to the water, right?

I just said that because it's been a very long time since the thread went dormant and almost as long since I've even visited the forum. It is nice to be part of such a helpful community though.
Title: Re: How do I save myself from a past financing mistake?
Post by: ooeei on November 12, 2015, 09:41:32 AM
With everything I wanted on the tC, the price came out to 21,117. They offered me 20k for the genesis, which I was able to negotiate to 20,500 because it only had a little over 12,000 miles on it. The increase was nearly negligible, my interest rate dropped by 1%, and my monthly "required" payment went down (because they added a year to the length of my loan). I am still paying significantly more than the minimum each month and as soon as I sell my civic, I will be putting 100% of the proceeds into paying off student loan debt (sits at 6% interest as opposed to the 1.9% of the car). I am saying that the ~$600 increase wasn't an increase because I have assets that can be liquidated for more than that which weren't able to be liquidated before the trade.

It isn't MUCH better of a situation, but I freed up driveway space, significantly reduced the future cost of gas and maintenance, and became more flexible with my transportation options during the winter and the cost pretty much comes out to one month's payment. I'm feeling like this is about as good of a recovery as I could have made in my situation.

I don't want to be a downer, but am going to be anyway.  How did all of this help you with your original problem of having a car worth 50% of your annual salary that was going to increase your working life by a year and a half?  What does switching to the Scion fix? I mean, I guess it's good that you got a slightly more practical car, but it doesn't seem to have fixed any of the problems you brought up in the OP.  I also don't understand why you bought the Civic just to turn around and sell it.

Is there something I'm missing?  Did your priorities change?

I even consider sucking up the debt and keeping it just for shits and giggles, but then I look at the numbers and realize that keeping this car will add 17 months to my working career and I begin to second-guess whether a car is worth almost a year and a half of my freedom, but then I take it for a drive and my feelings swing back towards keeping it. The whole idea is to seek out happiness, and driving this car makes me genuinely happy, but forking over 18% of my take-home every month doesn't.

Now for the story:
I made the mistake of financing a car worth about 50% of my annual salary after I graduated from college. The loan is for 60 months with payments just shy of $600/month.
9 of these months have passed already. I started reading MMM early last month and realized I may have made a grave mistake.

Seems you just changed the car but kept all the baggage.  Maybe your payment is down, but now the time commitment is even longer.

I also got lucky recently and came into about $3000 of unanticipated income that will be put towards buying a fuel efficient daily driver for me to take to and from work. My expensive sporty car will be well-kept with low miles as a weekend car until it is paid off, at which point it will likely be sold. I also have a suspended license due to an excessive number of speeding tickets, so it's not like I can drive anywhere other than to and from work for the next few months anyway. But hey, at least I finally have that motivation to ride my bike more.

You bought the fuel efficient daily driver, found a buyer for the expensive sporty car, and then spent all the money you got for the expensive sporty car on a new car. Why?

There are few new cars I would enjoy driving that would come out with less overall debt than my current balance, but it is a possibility. I would still like to get rid of it completely and buy something in the $4000 range.

You did it!  Then you undid it.
Title: Re: How do I save myself from a past financing mistake?
Post by: RWD on November 12, 2015, 09:47:45 AM
With everything I wanted on the tC, the price came out to 21,117. They offered me 20k for the genesis, which I was able to negotiate to 20,500 because it only had a little over 12,000 miles on it. The increase was nearly negligible, my interest rate dropped by 1%, and my monthly "required" payment went down (because they added a year to the length of my loan). I am still paying significantly more than the minimum each month and as soon as I sell my civic, I will be putting 100% of the proceeds into paying off student loan debt (sits at 6% interest as opposed to the 1.9% of the car). I am saying that the ~$600 increase wasn't an increase because I have assets that can be liquidated for more than that which weren't able to be liquidated before the trade.

It isn't MUCH better of a situation, but I freed up driveway space, significantly reduced the future cost of gas and maintenance, and became more flexible with my transportation options during the winter and the cost pretty much comes out to one month's payment. I'm feeling like this is about as good of a recovery as I could have made in my situation.

With only 1.9% on the car you'd be much better off putting your extra payments towards the student loans first.

As long as you don't keep buying a new car every two years I think you'll come out okay, even though your situation is not ideal. You're getting killed on depreciation, though. If you were aiming for a financially optimal solution you would keep the two Civics and sell the tC, freeing yourself of a car payment entirely.
Title: Re: How do I save myself from a past financing mistake?
Post by: HairyUpperLip on November 12, 2015, 09:48:40 AM
I don't want to be a downer, but am going to be anyway. 

I deleted what I wrote several times because I did not want to come off as a being a dick, but I'm honestly confused about this thread and the OP's real goals/intentions.

Title: Re: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on November 12, 2015, 10:11:23 AM


I don't want to be a downer, but am going to be anyway.  How did all of this help you with your original problem of having a car worth 50% of your annual salary that was going to increase your working life by a year and a half?  What does switching to the Scion fix? I mean, I guess it's good that you got a slightly more practical car, but it doesn't seem to have fixed any of the problems you brought up in the OP.  I also don't understand why you bought the Civic just to turn around and sell it.

Is there something I'm missing?  Did your priorities change?


Seems you just changed the car but kept all the baggage.  Maybe your payment is down, but now the time commitment is even longer.


You bought the fuel efficient daily driver, found a buyer for the expensive sporty car, and then spent all the money you got for the expensive sporty car on a new car. Why?


You did it!  Then you undid it.

I'll try to tackle these one at a time.
Without ruining my credit score, I had very few options for getting rid of the genesis. A dealer trade in for with minimal increase to my debt was the decision I was most comfortable with. The tC is more fuel efficient, more reliable, and more practical than the genesis. I still have the weight of the same debt, but now I at least have a car that will last me 200,000+ miles if treated properly, as opposed to a car with a back seat a 14 year old couldn't fit in that was in the shop constantly. The debt didn't go away, but I moved into a more responsible vehicle.

I bought the civic a long time ago (this post is pretty old) as a temporary car to get me through the winter because the genesis is absolutely useless in snow. My previous intention was to hold onto the genesis until depreciation started to level out and I owed less than what it was worth, which would have been at least three years from now. Instead, I opted to trade it for a car (the scion) that holds more value over time and is more reliable. The scion also happens to be usable in the winter, eliminating my need for a "winter car." In addition to the lack of need for a winter car, the civic also has 193,xxx miles on it and has begun to have transmission problems in the last couple months. I am hoping to get rid of it on craigslist while it still drives. The body is in decent enough shape to sell to some kid looking for a project.

I did change the car and keep all of the baggage, yes. But because I added almost nothing to the baggage, I am still able to pay off the loan on the same schedule and now I have a vehicle that will be worth more and have more life left in it when the loan is paid off. Not to mention the significant future savings on fuel and maintenance, especially with Toyota/lexus/scion offering all regular scheduled maintenance for free for the first 2 years/25,000 miles. So no, I didn't get rid of any debt, but at the same time I improved my automotive situation without adding to the debt.

The "buyer" for the expensive sporty car was a dealership. The only way for me to sell the car for less than what I owed without pulling $7000 out of thin air was to trade it to a dealership for another car, I didn't sell the car and then suddenly have 20 grand in my pocket and think "you know what? I should blow all of this money on another car."

I didn't do it and then undo it. I did it. Period. I found a new car that I enjoy driving without increasing my debt while simultaneously improving my situation.
Title: Re: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on November 12, 2015, 10:17:04 AM
With everything I wanted on the tC, the price came out to 21,117. They offered me 20k for the genesis, which I was able to negotiate to 20,500 because it only had a little over 12,000 miles on it. The increase was nearly negligible, my interest rate dropped by 1%, and my monthly "required" payment went down (because they added a year to the length of my loan). I am still paying significantly more than the minimum each month and as soon as I sell my civic, I will be putting 100% of the proceeds into paying off student loan debt (sits at 6% interest as opposed to the 1.9% of the car). I am saying that the ~$600 increase wasn't an increase because I have assets that can be liquidated for more than that which weren't able to be liquidated before the trade.

It isn't MUCH better of a situation, but I freed up driveway space, significantly reduced the future cost of gas and maintenance, and became more flexible with my transportation options during the winter and the cost pretty much comes out to one month's payment. I'm feeling like this is about as good of a recovery as I could have made in my situation.

With only 1.9% on the car you'd be much better off putting your extra payments towards the student loans first.

As long as you don't keep buying a new car every two years I think you'll come out okay, even though your situation is not ideal. You're getting killed on depreciation, though. If you were aiming for a financially optimal solution you would keep the two Civics and sell the tC, freeing yourself of a car payment entirely.
The problem with the two civics is that one of them is pushing 200,000 miles and has transmission problems and the other is my wife's. Hers happens to have something screwy going on with the steering system that has lead to an alignment issue, as well as what appears to be a head gasket going bad. Both of these are problems we are capable of fixing (I'm an engineer that loves working on cars and she is a mechanic), but still not an ideal situation for a reliable daily driver. The tC is reliable, under warranty, and has about 20 years left in it if I treat it right. I'll never buy another new car, but this one is definitely better than the genesis.
Regarding where to put my extra payments, in order to keep with my plan of being debt free within 5 years of graduating from college, I have to keep making the same payment on the car that I was making on the genesis. If I re-directed those payments to the student loans, I wouldn't be out of debt until the 6.5-7 year mark. That being said, I have already chipped off more than 20% of my student loan debt in the first year out of school by making payments double and sometimes triple what the minimum required is, so I'm right on track.
Title: Re: How do I save myself from a past financing mistake?
Post by: ooeei on November 12, 2015, 10:19:27 AM


I don't want to be a downer, but am going to be anyway.  How did all of this help you with your original problem of having a car worth 50% of your annual salary that was going to increase your working life by a year and a half?  What does switching to the Scion fix? I mean, I guess it's good that you got a slightly more practical car, but it doesn't seem to have fixed any of the problems you brought up in the OP.  I also don't understand why you bought the Civic just to turn around and sell it.

Is there something I'm missing?  Did your priorities change?


Seems you just changed the car but kept all the baggage.  Maybe your payment is down, but now the time commitment is even longer.


You bought the fuel efficient daily driver, found a buyer for the expensive sporty car, and then spent all the money you got for the expensive sporty car on a new car. Why?


You did it!  Then you undid it.

I'll try to tackle these one at a time.
Without ruining my credit score, I had very few options for getting rid of the genesis. A dealer trade in for with minimal increase to my debt was the decision I was most comfortable with. The tC is more fuel efficient, more reliable, and more practical than the genesis. I still have the weight of the same debt, but now I at least have a car that will last me 200,000+ miles if treated properly, as opposed to a car with a back seat a 14 year old couldn't fit in that was in the shop constantly. The debt didn't go away, but I moved into a more responsible vehicle.

I bought the civic a long time ago (this post is pretty old) as a temporary car to get me through the winter because the genesis is absolutely useless in snow. My previous intention was to hold onto the genesis until depreciation started to level out and I owed less than what it was worth, which would have been at least three years from now. Instead, I opted to trade it for a car (the scion) that holds more value over time and is more reliable. The scion also happens to be usable in the winter, eliminating my need for a "winter car." In addition to the lack of need for a winter car, the civic also has 193,xxx miles on it and has begun to have transmission problems in the last couple months. I am hoping to get rid of it on craigslist while it still drives. The body is in decent enough shape to sell to some kid looking for a project.

I did change the car and keep all of the baggage, yes. But because I added almost nothing to the baggage, I am still able to pay off the loan on the same schedule and now I have a vehicle that will be worth more and have more life left in it when the loan is paid off. Not to mention the significant future savings on fuel and maintenance, especially with Toyota/lexus/scion offering all regular scheduled maintenance for free for the first 2 years/25,000 miles. So no, I didn't get rid of any debt, but at the same time I improved my automotive situation without adding to the debt.

The "buyer" for the expensive sporty car was a dealership. The only way for me to sell the car for less than what I owed without pulling $7000 out of thin air was to trade it to a dealership for another car, I didn't sell the car and then suddenly have 20 grand in my pocket and think "you know what? I should blow all of this money on another car."

I didn't do it and then undo it. I did it. Period. I found a new car that I enjoy driving without increasing my debt while simultaneously improving my situation.

Okay, that explains it better.  For some reason I thought you were not underwater on the original car anymore when you traded it in.  Sounds like a logical decision for the situation you were in.  Obviously your original choice limited your options significantly, but you seem to be moving in the right direction.
Title: Re: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on November 12, 2015, 10:24:09 AM
So you finally managed to get rid of the expensive wasteful new car, bought an old reliable model, and then turned around and bought a brand new 2016 car because winter?  So basically you did nothing about the debt and now have 2 cars instead of one.  What happened?

I am confused too.

So now you have a

1998 Honda Civic
1987 Honda Rebel
2016 Scion tC
1994 Honda Civic

What was your goal again?

I want to start out with the disclaimer that cars are my vice. I love driving them. I love working on them.
Some people spend money on drugs and alcohol. Some people spend money on improvements around the house house. I enjoy cars. (I am not making this comparison to suggest that these things provide equal virtue in one's life, of course.)

As a car enthusiast I'm confused even more after re-reading your first post.

What exact automotive thrills do you get out of a Scion tC?

I would suggest selling the Scion.
Keep the Rebel and 2 Civic's.
Use the '94 Civic as the winter car.


good luck!

I have a 98 civic and a 16 tC. My wife has an 87 rebel and a 94 civic.
I'm not sure you guys have ever had a car loan, but you can't just sell a car that you don't have the title to. It is not that simple.
The tC is surprisingly fun to drive on the optional TRD lowering springs. I like a car that I can push to its limits, not one that pushes me to mine. If I push a car and it fails, I have a broken car. If my car pushes me and I fail, I die.
The scion is significantly slower and somewhat sluggish compared to the genesis, but it's still got a decent amount of pep and handles really well once it's on stiffer springs.

-Edit to justify being a car enthusiast AND liking the tC-
The tC is also a lot more comfortable to drive than the genesis. About 30 minutes in the genesis was my limit before my back started hurting from a combination of the crappy seats and harsh suspension. The tC has a more comfortable seat and a more comfortable suspension, even when lowered on the TRD springs. The level of technology in the '16 tC is way above and beyond what I would expect for a car in its price range too. All-around I feel like it is a much better car than the GenCoupe, even if it significantly lacks in the performance department.
It's not as quick as cars in the 25-26k range (mazdaspeed3, civic si, Miata, etc.) but it's got more power than other cars in the 21k range with the same trim options.
I can also sit in the back seat comfortably, and I'm 6'2". Not that I would ever need to sit in the back seat of my own car, but it is a definite advantage over, say, the fiesta ST (same price) that I couldn't even fit comfortable in the front of.
And the facelifted 2nd generation ones (also known as the tC2.5) look funky and unique and my wife and I are all about that.


Regarding my wife's 94 civic, it was a bad idea that I told her not to buy and she did anyway. It has an engine swap out of a 95 integra gsr, lowered on tien coilovers in the front and tien lowering springs in the back, and has a handful of aesthetic aftermarket bits. No power steering, no ABS, no traction control. It's almost impossible to drive in the rain. It's not a winter car. Also, the mechanical issues that I mentioned in a previous reply.
Title: Re: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on November 12, 2015, 10:28:36 AM
Just as a reply-all to everybody saying I should keep the civic:

The car is a pile of junk. It has maybe 5000 miles left on it before the cost of the repairs will be more than the value of the car. It was a bad purchase. It was a short-sighted decision intended to get me through the snowy winter while I figured out what to do about the situation with the genesis. Now that I have figured out the genesis situation, I have no more need for a car that is about to fall apart under me. The 98 lx is going to be sold. Period. The tC is a better long-term investment than trying to keep that pile of crap on the road.
Title: Re: How do I save myself from a past financing mistake?
Post by: humbleMouse on November 12, 2015, 10:37:35 AM
Kudos to all of your good explanation of the situation.  Seems like you made a pretty good decision trading the genesis in.  My only question now is why was the dealer wiling to take the trade-in way above market value?  Seems a little odd to me but I suppose thats how it worked in your case.  Seems like you got to have your cake and eat it too on that one.
Title: Re: How do I save myself from a past financing mistake?
Post by: irishbear99 on November 12, 2015, 10:37:55 AM
It's not a winter car.

I'm not trying to be a jerk; I'm just genuinely confused. This is the second or third time I've seen you reference a "winter car." What in the world is a winter car? Are you suggesting that you need a separate car just for winter? If that's the case, I respectfully disagree. I drove a Civic for years in a city that didn't have the capacity to keep the roads clear in the winter. All I needed was a set of chains. Snow tires was always another option.

It sounds like, based on the condition of the cars, etc., getting rid of the Civic was a good idea. I'm just challenging the notion that one needs a "winter" car...at least, based on the details provided in this thread.
Title: Re: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on November 12, 2015, 10:44:58 AM
Kudos to all of your good explanation of the situation.  Seems like you made a pretty good decision trading the genesis in.  My only question now is why was the dealer wiling to take the trade-in way above market value?  Seems a little odd to me but I suppose thats how it worked in your case.  Seems like you got to have your cake and eat it too on that one.

The kbb expected trade-in was between 19 and 21k. It was in nearly perfect condition and had about 13,000 miles LESS than average for the same model of the same year. They make a profit off of the car still AND Toyota got my loan from the bank, meaning they make money off of that to. It was a no-lose situation for them to accept the trade-in.
Title: Re: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on November 12, 2015, 10:50:30 AM
It's not a winter car.

I'm not trying to be a jerk; I'm just genuinely confused. This is the second or third time I've seen you reference a "winter car." What in the world is a winter car? Are you suggesting that you need a separate car just for winter? If that's the case, I respectfully disagree. I drove a Civic for years in a city that didn't have the capacity to keep the roads clear in the winter. All I needed was a set of chains. Snow tires was always another option.

It sounds like, based on the condition of the cars, etc., getting rid of the Civic was a good idea. I'm just challenging the notion that one needs a "winter" car...at least, based on the details provided in this thread.
You are 100% correct. Any car can be good in the snow with the right tires and enough patience.

Unfortunately, the genesis came with summer tires from the factory, which were only slightly better than racing slicks in the snow. A cheap set of snow tires for the genesis would have run about $2000 and the risk of damaging the car in inclement weather added to that upfront cost made me not want to drive it in the winter. Because of this, I bought a crappy beater  for less than the price of a set of snow tires on the genesis to drive during the winter months.

Now that I have a car (the scion) that has a more common (and as a result, cheaper) tire size and comes with all-season tires from the factory, I can afford to drive my primary vehicle year-round and the idea of owning a car specifically for use during the winter months is no longer practical. It would make more sense for me to liquidate that particular asset and use the income to help reduce my debt situation.
Title: Re: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on November 12, 2015, 10:54:39 AM
It's not a winter car.

I'm not trying to be a jerk; I'm just genuinely confused. This is the second or third time I've seen you reference a "winter car." What in the world is a winter car? Are you suggesting that you need a separate car just for winter? If that's the case, I respectfully disagree. I drove a Civic for years in a city that didn't have the capacity to keep the roads clear in the winter. All I needed was a set of chains. Snow tires was always another option.

It sounds like, based on the condition of the cars, etc., getting rid of the Civic was a good idea. I'm just challenging the notion that one needs a "winter" car...at least, based on the details provided in this thread.
You are 100% correct. Any car can be good in the snow with the right tires and enough patience.

Unfortunately, the genesis came with summer tires from the factory, which were only slightly better than racing slicks in the snow. A cheap set of snow tires for the genesis would have run about $2000 and the risk of damaging the car in inclement weather added to that upfront cost made me not want to drive it in the winter. Because of this, I bought a crappy beater  for less than the price of a set of snow tires on the genesis to drive during the winter months.

Now that I have a car (the scion) that has a more common (and as a result, cheaper) tire size and comes with all-season tires from the factory, I can afford to drive my primary vehicle year-round and the idea of owning a car specifically for use during the winter months is no longer practical. It would make more sense for me to liquidate that particular asset and use the income to help reduce my debt situation.

To answer your question that I seem to have overlooked:
I say my wife's civic is not a "winter car" because the lack of safety features would make it more hazardous to drive in the snowy months than the average vehicle. That added to the recent reliability issues means the chance of getting stuck in the snow due to an accident or mechanical failure is uncomfortably high. I would not trust it to be a car reliable and safe enough to drive in a snowy winter, and thus I do not consider it to be a "winter car." To be honest, it's more of a project than anything. She gets parts for cheap through work, never has to pay for labor, and has a nearly unlimited supply of tools at her shop, so it's not a very costly hobby. It does take up driveway space though...
Title: Re: How do I save myself from a past financing mistake?
Post by: RWD on November 12, 2015, 10:54:46 AM
Regarding where to put my extra payments, in order to keep with my plan of being debt free within 5 years of graduating from college, I have to keep making the same payment on the car that I was making on the genesis. If I re-directed those payments to the student loans, I wouldn't be out of debt until the 6.5-7 year mark. That being said, I have already chipped off more than 20% of my student loan debt in the first year out of school by making payments double and sometimes triple what the minimum required is, so I'm right on track.

Mathematically you should be able to be debt free faster by putting extra payments towards the higher interest loan first. Once that is paid off you put the extra amount plus the amount freed up by the loan you just paid off towards the next highest interest. Try entering your numbers into this calculator: http://unbury.us/
Title: Re: How do I save myself from a past financing mistake?
Post by: Imonaboat on November 12, 2015, 10:56:28 AM
If I push a car and it fails, I have a broken car. If my car pushes me and I fail, I die.
I made the mistake of financing a car worth about 50% of my annual salary after I graduated from college.
all the goodies I wanted
I also have a suspended license due to an excessive number of speeding tickets

It seems like you have an expensive and dangerous hobby that you cannot actually afford. It was easy to justify a new car with extras this time because a bad decision made in the past, but what will you do when the new car starts to get a little tarnished or boring? Will you dig yourself out or just dig a new hole?
Title: Re: How do I save myself from a past financing mistake?
Post by: use2betrix on November 12, 2015, 10:56:40 AM
It's not a winter car.

I'm not trying to be a jerk; I'm just genuinely confused. This is the second or third time I've seen you reference a "winter car." What in the world is a winter car? Are you suggesting that you need a separate car just for winter? If that's the case, I respectfully disagree. I drove a Civic for years in a city that didn't have the capacity to keep the roads clear in the winter. All I needed was a set of chains. Snow tires was always another option.

It sounds like, based on the condition of the cars, etc., getting rid of the Civic was a good idea. I'm just challenging the notion that one needs a "winter" car...at least, based on the details provided in this thread.
You are 100% correct. Any car can be good in the snow with the right tires and enough patience.

Unfortunately, the genesis came with summer tires from the factory, which were only slightly better than racing slicks in the snow. A cheap set of snow tires for the genesis would have run about $2000 and the risk of damaging the car in inclement weather added to that upfront cost made me not want to drive it in the winter. Because of this, I bought a crappy beater  for less than the price of a set of snow tires on the genesis to drive during the winter months.

Now that I have a car (the scion) that has a more common (and as a result, cheaper) tire size and comes with all-season tires from the factory, I can afford to drive my primary vehicle year-round and the idea of owning a car specifically for use during the winter months is no longer practical. It would make more sense for me to liquidate that particular asset and use the income to help reduce my debt situation.

$2000 for "cheap snow tires?"

Title: Re: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on November 12, 2015, 11:00:46 AM
Regarding where to put my extra payments, in order to keep with my plan of being debt free within 5 years of graduating from college, I have to keep making the same payment on the car that I was making on the genesis. If I re-directed those payments to the student loans, I wouldn't be out of debt until the 6.5-7 year mark. That being said, I have already chipped off more than 20% of my student loan debt in the first year out of school by making payments double and sometimes triple what the minimum required is, so I'm right on track.

Mathematically you should be able to be debt free faster by putting extra payments towards the higher interest loan first. Once that is paid off you put the extra amount plus the amount freed up by the loan you just paid off towards the next highest interest. Try entering your numbers into this calculator: http://unbury.us/

I will definitely look into that. My initial plan was set up around my minimum car payment being 592/month, so I just rounded it up to 600 and handled the rest of my loans prioritizing highest interest first. Now that that minimum payment has dropped by over $100 (because the duration of the loan was extended by a year), I need to re-do the calculations to determine whether putting that extra hundred towards higher interest loans at first would still allow me to meet my 5 year plan. Currently, maintaining the payments I have has me still being debt-free 5 years from graduation.
Title: Re: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on November 12, 2015, 11:04:01 AM
If I push a car and it fails, I have a broken car. If my car pushes me and I fail, I die.
I made the mistake of financing a car worth about 50% of my annual salary after I graduated from college.
all the goodies I wanted
I also have a suspended license due to an excessive number of speeding tickets

It seems like you have an expensive and dangerous hobby that you cannot actually afford. It was easy to justify a new car with extras this time because a bad decision made in the past, but what will you do when the new car starts to get a little tarnished or boring? Will you dig yourself out or just dig a new hole?
I have a crx sitting in my garage that I payed $600 for that I have put a grand total of $24 into since I bought it. That should keep my "[debatably] expensive and dangerous" hobby under control for the time being.

fun fact: there is a higher rate of injury and more money spent per person anually playing golf than participating in autocross events.
Title: Re: How do I save myself from a past financing mistake?
Post by: RWD on November 12, 2015, 11:04:48 AM
It's not a winter car.

I'm not trying to be a jerk; I'm just genuinely confused. This is the second or third time I've seen you reference a "winter car." What in the world is a winter car? Are you suggesting that you need a separate car just for winter? If that's the case, I respectfully disagree. I drove a Civic for years in a city that didn't have the capacity to keep the roads clear in the winter. All I needed was a set of chains. Snow tires was always another option.

It sounds like, based on the condition of the cars, etc., getting rid of the Civic was a good idea. I'm just challenging the notion that one needs a "winter" car...at least, based on the details provided in this thread.
You are 100% correct. Any car can be good in the snow with the right tires and enough patience.

Unfortunately, the genesis came with summer tires from the factory, which were only slightly better than racing slicks in the snow. A cheap set of snow tires for the genesis would have run about $2000 and the risk of damaging the car in inclement weather added to that upfront cost made me not want to drive it in the winter. Because of this, I bought a crappy beater  for less than the price of a set of snow tires on the genesis to drive during the winter months.

Now that I have a car (the scion) that has a more common (and as a result, cheaper) tire size and comes with all-season tires from the factory, I can afford to drive my primary vehicle year-round and the idea of owning a car specifically for use during the winter months is no longer practical. It would make more sense for me to liquidate that particular asset and use the income to help reduce my debt situation.

$2000 for "cheap snow tires?"

Seems high. A quick check on tirerack.com shows the prices for four snow tires on the 2014 Genesis 3.8 R-Spec ranges from $700 to $1040, plus shipping and installation. Still not real cheap but less than half of $2000 for the cheapest option.
Title: Re: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on November 12, 2015, 11:07:19 AM
It's not a winter car.

I'm not trying to be a jerk; I'm just genuinely confused. This is the second or third time I've seen you reference a "winter car." What in the world is a winter car? Are you suggesting that you need a separate car just for winter? If that's the case, I respectfully disagree. I drove a Civic for years in a city that didn't have the capacity to keep the roads clear in the winter. All I needed was a set of chains. Snow tires was always another option.

It sounds like, based on the condition of the cars, etc., getting rid of the Civic was a good idea. I'm just challenging the notion that one needs a "winter" car...at least, based on the details provided in this thread.
You are 100% correct. Any car can be good in the snow with the right tires and enough patience.

Unfortunately, the genesis came with summer tires from the factory, which were only slightly better than racing slicks in the snow. A cheap set of snow tires for the genesis would have run about $2000 and the risk of damaging the car in inclement weather added to that upfront cost made me not want to drive it in the winter. Because of this, I bought a crappy beater  for less than the price of a set of snow tires on the genesis to drive during the winter months.

Now that I have a car (the scion) that has a more common (and as a result, cheaper) tire size and comes with all-season tires from the factory, I can afford to drive my primary vehicle year-round and the idea of owning a car specifically for use during the winter months is no longer practical. It would make more sense for me to liquidate that particular asset and use the income to help reduce my debt situation.

$2000 for "cheap snow tires?"

19" wheel diameter with staggered widths in the front and rear.
The sidewalls of the tires on 19" wheels are also narrow enough that it is advisable to get smaller diameter wheels for snow tires so that you can have more flex in the tire and get more grip in cold conditions. The smallest wheel that would fit around the oversized brakes was 18" and would have been another $1200 on top of the price of the tires.

It's not a common size, and the staggered widths means zero discounts or "buy 3 get one free" deals from buying a set.
Title: Re: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on November 12, 2015, 11:10:10 AM
It's not a winter car.

I'm not trying to be a jerk; I'm just genuinely confused. This is the second or third time I've seen you reference a "winter car." What in the world is a winter car? Are you suggesting that you need a separate car just for winter? If that's the case, I respectfully disagree. I drove a Civic for years in a city that didn't have the capacity to keep the roads clear in the winter. All I needed was a set of chains. Snow tires was always another option.

It sounds like, based on the condition of the cars, etc., getting rid of the Civic was a good idea. I'm just challenging the notion that one needs a "winter" car...at least, based on the details provided in this thread.
You are 100% correct. Any car can be good in the snow with the right tires and enough patience.

Unfortunately, the genesis came with summer tires from the factory, which were only slightly better than racing slicks in the snow. A cheap set of snow tires for the genesis would have run about $2000 and the risk of damaging the car in inclement weather added to that upfront cost made me not want to drive it in the winter. Because of this, I bought a crappy beater  for less than the price of a set of snow tires on the genesis to drive during the winter months.

Now that I have a car (the scion) that has a more common (and as a result, cheaper) tire size and comes with all-season tires from the factory, I can afford to drive my primary vehicle year-round and the idea of owning a car specifically for use during the winter months is no longer practical. It would make more sense for me to liquidate that particular asset and use the income to help reduce my debt situation.

$2000 for "cheap snow tires?"

Seems high. A quick check on tirerack.com shows the prices for four snow tires on the 2014 Genesis 3.8 R-Spec ranges from $700 to $1040, plus shipping and installation. Still not real cheap but less than half of $2000 for the cheapest option.
I haven't priced the tires since last july, so it is very likely they could have gone down. The 14 was also the first year with a 19" wheel standard. The 2015 and 2016 models are out now, meaning there is a higher demand for manufacturers to make the tires, making them less of a specialty item and driving the price down.
I also checked the price of snow tires during the summer. With winter right around the corner, tirerack currently has a lot of sales on snow tires.
Title: Re: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on November 12, 2015, 11:11:07 AM
It's not a winter car.

I'm not trying to be a jerk; I'm just genuinely confused. This is the second or third time I've seen you reference a "winter car." What in the world is a winter car? Are you suggesting that you need a separate car just for winter? If that's the case, I respectfully disagree. I drove a Civic for years in a city that didn't have the capacity to keep the roads clear in the winter. All I needed was a set of chains. Snow tires was always another option.

It sounds like, based on the condition of the cars, etc., getting rid of the Civic was a good idea. I'm just challenging the notion that one needs a "winter" car...at least, based on the details provided in this thread.
You are 100% correct. Any car can be good in the snow with the right tires and enough patience.

Unfortunately, the genesis came with summer tires from the factory, which were only slightly better than racing slicks in the snow. A cheap set of snow tires for the genesis would have run about $2000 and the risk of damaging the car in inclement weather added to that upfront cost made me not want to drive it in the winter. Because of this, I bought a crappy beater  for less than the price of a set of snow tires on the genesis to drive during the winter months.

Now that I have a car (the scion) that has a more common (and as a result, cheaper) tire size and comes with all-season tires from the factory, I can afford to drive my primary vehicle year-round and the idea of owning a car specifically for use during the winter months is no longer practical. It would make more sense for me to liquidate that particular asset and use the income to help reduce my debt situation.

$2000 for "cheap snow tires?"

Seems high. A quick check on tirerack.com shows the prices for four snow tires on the 2014 Genesis 3.8 R-Spec ranges from $700 to $1040, plus shipping and installation. Still not real cheap but less than half of $2000 for the cheapest option.
I haven't priced the tires since last july, so it is very likely they could have gone down. The 14 was also the first year with a 19" wheel standard. The 2015 and 2016 models are out now, meaning there is a higher demand for manufacturers to make the tires, making them less of a specialty item and driving the price down.
I also checked the price of snow tires during the summer. With winter right around the corner, tirerack currently has a lot of sales on snow tires.
AT THE TIME THAT I BOUGHT THE CIVIC, those were the prices.
Do we really have nothing better to do than nit-pick right now?
Title: Re: How do I save myself from a past financing mistake?
Post by: Imonaboat on November 12, 2015, 11:19:12 AM
It's not our finances. We are simply pointing out that a large portion of your income is bleeding away due to vehicle related costs at every corner. If you want to get out of debt and stay that way, you should figure out a way to moderate that.
Title: Re: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on November 12, 2015, 11:35:39 AM
It's not our finances. We are simply pointing out that a large portion of your income is bleeding away due to vehicle related costs at every corner. If you want to get out of debt and stay that way, you should figure out a way to moderate that.
I'm working on it. My Mint account indicates about 65% of my take-home goes to paying off debt (including my car payment), with another ~5% per month going toward parts and repairs, although a lot of the time I categorize tool purchases as auto parts/repairs to help prevent myself from binge buying new tools. The rest is rent, food, and savings. I put 5% into my 401k and 5% into my IRA. My plan is to re-balance these numbers once I'm debt-free and distribute that 65% as 50% into savings/investments, maxing out my IRA, and putting the leftovers into my 401k. I have managed to constrain my non-debt related expenses to 35% of my take-home pay (keeping with MMM's 10-year math), meaning that even if I continue to spend the money i'm spending on car parts, I will still be only 10 years away from FI after I'm debt-free. This means I will be able to "retire" within 15 years of leaving school. It's not amazing and I've made some bad decisions in the last couple years, but my auto spending is definitely under control.
Title: Re: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on November 12, 2015, 11:40:47 AM
It's not our finances. We are simply pointing out that a large portion of your income is bleeding away due to vehicle related costs at every corner. If you want to get out of debt and stay that way, you should figure out a way to moderate that.
Besides, I was pointing out that I recognized how expensive it would be to safely drive the genesis in the winter and instead made the decision to use less money to buy a cheap car. Insurance went down too because I put the genesis "in storage" and didn't drive it. The civic saved me money upfront and monthly when the genesis was my primary vehicle, but now that I've traded it in for the tC, it is more expensive to own the civic than to get rid of it.
Title: Re: How do I save myself from a past financing mistake?
Post by: Imonaboat on November 12, 2015, 11:52:32 AM
It's good that you are all lined up! The only thing left is to maintain that trend, which is often the most difficult part, especially once you are debt free and deserve it.

There is a trick that some people have to show what they really gained for all they have worked for. You add up all the costs, (gas, maintenance, purchase price, tires, current loan totals, interest, parts, time, everything) write down that number and then go look in the driveway. Would you buy what you have if you had to pay that price? Chances are the answer would be a hell no. You might try this if you ever feel yourself succumbing to a new purchase that you are unsure of.

Anyways, keep up the good work!
Title: Re: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on November 12, 2015, 11:57:19 AM
It's good that you are all lined up! The only thing left is to maintain that trend, which is often the most difficult part, especially once you are debt free and deserve it.

There is a trick that some people have to show what they really gained for all they have worked for. You add up all the costs, (gas, maintenance, purchase price, tires, current loan totals, interest, parts, time, everything) write down that number and then go look in the driveway. Would you buy what you have if you had to pay that price? Chances are the answer would be a hell no. You might try this if you ever feel yourself succumbing to a new purchase that you are unsure of.

Anyways, keep up the good work!
Thank you. I appreciate it. :]
Title: Re: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on November 12, 2015, 12:12:13 PM
Regarding where to put my extra payments, in order to keep with my plan of being debt free within 5 years of graduating from college, I have to keep making the same payment on the car that I was making on the genesis. If I re-directed those payments to the student loans, I wouldn't be out of debt until the 6.5-7 year mark. That being said, I have already chipped off more than 20% of my student loan debt in the first year out of school by making payments double and sometimes triple what the minimum required is, so I'm right on track.

Mathematically you should be able to be debt free faster by putting extra payments towards the higher interest loan first. Once that is paid off you put the extra amount plus the amount freed up by the loan you just paid off towards the next highest interest. Try entering your numbers into this calculator: http://unbury.us/

After messing with the numbers on the site you linked, It comes out that I will be debt free in May of 18, no matter which account I focus on first, as long as I keep throwing the same chunk of cash at my debts as I currently am. I ill save a little over $300 in interest. payments by focusing on my student loans first though.
Title: Re: How do I save myself from a past financing mistake?
Post by: irishbear99 on November 12, 2015, 12:27:53 PM
It's not a winter car.

I'm not trying to be a jerk; I'm just genuinely confused. This is the second or third time I've seen you reference a "winter car." What in the world is a winter car? Are you suggesting that you need a separate car just for winter? If that's the case, I respectfully disagree. I drove a Civic for years in a city that didn't have the capacity to keep the roads clear in the winter. All I needed was a set of chains. Snow tires was always another option.

It sounds like, based on the condition of the cars, etc., getting rid of the Civic was a good idea. I'm just challenging the notion that one needs a "winter" car...at least, based on the details provided in this thread.
You are 100% correct. Any car can be good in the snow with the right tires and enough patience.

Unfortunately, the genesis came with summer tires from the factory, which were only slightly better than racing slicks in the snow. A cheap set of snow tires for the genesis would have run about $2000 and the risk of damaging the car in inclement weather added to that upfront cost made me not want to drive it in the winter. Because of this, I bought a crappy beater  for less than the price of a set of snow tires on the genesis to drive during the winter months.

Now that I have a car (the scion) that has a more common (and as a result, cheaper) tire size and comes with all-season tires from the factory, I can afford to drive my primary vehicle year-round and the idea of owning a car specifically for use during the winter months is no longer practical. It would make more sense for me to liquidate that particular asset and use the income to help reduce my debt situation.

Thank you for answering my question. I assume that, even when you factor in the cost of maintaining, insuring, registering and storing the new vehicle, that it came out to be less than what you were quoted for snow tires. (If you didn't take the rest of the cost of ownership into account, make sure you do so in the future.)



After messing with the numbers on the site you linked, It comes out that I will be debt free in May of 18, no matter which account I focus on first, as long as I keep throwing the same chunk of cash at my debts as I currently am. I ill save a little over $300 in interest. payments by focusing on my student loans first though.

Sounds like you're making good progress on your debt. Congrats!
Title: Re: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on November 12, 2015, 12:32:17 PM
It's not a winter car.

I'm not trying to be a jerk; I'm just genuinely confused. This is the second or third time I've seen you reference a "winter car." What in the world is a winter car? Are you suggesting that you need a separate car just for winter? If that's the case, I respectfully disagree. I drove a Civic for years in a city that didn't have the capacity to keep the roads clear in the winter. All I needed was a set of chains. Snow tires was always another option.

It sounds like, based on the condition of the cars, etc., getting rid of the Civic was a good idea. I'm just challenging the notion that one needs a "winter" car...at least, based on the details provided in this thread.
You are 100% correct. Any car can be good in the snow with the right tires and enough patience.

Unfortunately, the genesis came with summer tires from the factory, which were only slightly better than racing slicks in the snow. A cheap set of snow tires for the genesis would have run about $2000 and the risk of damaging the car in inclement weather added to that upfront cost made me not want to drive it in the winter. Because of this, I bought a crappy beater  for less than the price of a set of snow tires on the genesis to drive during the winter months.

Now that I have a car (the scion) that has a more common (and as a result, cheaper) tire size and comes with all-season tires from the factory, I can afford to drive my primary vehicle year-round and the idea of owning a car specifically for use during the winter months is no longer practical. It would make more sense for me to liquidate that particular asset and use the income to help reduce my debt situation.

Thank you for answering my question. I assume that, even when you factor in the cost of maintaining, insuring, registering and storing the new vehicle, that it came out to be less than what you were quoted for snow tires. (If you didn't take the rest of the cost of ownership into account, make sure you do so in the future.)



After messing with the numbers on the site you linked, It comes out that I will be debt free in May of 18, no matter which account I focus on first, as long as I keep throwing the same chunk of cash at my debts as I currently am. I ill save a little over $300 in interest. payments by focusing on my student loans first though.

Sounds like you're making good progress on your debt. Congrats!

I got the car for $1200 and it had almost new tires on it. It had better fuel economy, my total insurance payments went down (because I locked the genesis in my garage for a few months), and parts for Hondas are cheap and abundant so maintenance costs were [supposed to be] almost nothing. Now that it is having drivetrain problems and the genesis is out of the picture, everything has changed.

TL;DR version - yes, I took those things into account when making my decision.
Title: Re: How do I save myself from a past financing mistake?
Post by: JordanOfGilead on February 05, 2016, 01:59:55 PM
Another update.
Wife sold her civic for what she paid for it, only cost out of pocket was an oil change and some gas money.
She now drives my civic that I bought as a "winter beater" on a daily basis with no issues.
The $600 CRX I mentioned earlier has had about another $200 total put into it (including registration and fuel) since I bought it and will be put up for sale next month. I'll be asking $1350 for it and hoping to get at least $1000. It's a crappy car, but they are really rare in my area and there is a strong base of Honda loyalists so I shouldn't have a problem unloading it.
The car problem has been resolved to the best of our ability and I'll be staying away from that money pit of a habit for a little while.
Title: Re: How do I save myself from a past financing mistake?
Post by: Carless on February 05, 2016, 08:27:58 PM
As you previously said you're contributing more than half your income to debt repayment, once that's gone you should be able to really save for FI quickly!