In a pickle (financial advice)

Bakerchk

Funny I should be asking this, seeing as how I go to school for Accounting... Anyways!

So I am in a bit of a pickle and need to explain a little background so, sorry if this is lengthy.
I bought a 2000 VW Golf 1.8T about 2 years ago. The car was salvaged, but fixed (semi) properly. I only paid $2,800.00 for the car, which is a pretty good deal. Over the past two years I have put over $3000.00 into the car. No major issues but now it's starting to crap out on me. The heater core is bad and the A/C unit is bad. Both issues will cost around $500.00 a pop to get fixed at a shop. On top of that, some sensor is bad which makes my check engine light come on, and that will cost $350.00 to fix. The cars registration is due and I can't register it because it won't smog. Which almost means even if I wanted to, I couldn't sell it because of the check engine light. So I decided instead of fixing it, I would get a loan for a used car (nothing crazy, around $5,000-$6,000 or so). I would like to purchase a used Toyota Camry or something. Just something realiable that I could drive for awhile without worrying about it. If I could get the loan, I could fix my car over the next 6 months or so, sell it for around $3000 and the loan would be close to paid off. However, because my credit is bad (hospital bills from my surgery and a credit card from when I was 18) I can't get a loan. the one place I got approved for is Paul Blanco, which their variety isn't great and they mark everything up.
My worry about getting a loan is that I will be paying way more than what I want for a car because since my credit is crappy not many people will approve me.

What do I do? Do I shop around a bit, and be patient while I look for something? Should I get my car fixed and drive it until it dies, and then what? I am so confused because I am terrified my car will take a crap on me, and then I'm screwed and I also don't know if I want to get a loan for a car. I would love to wait a year, pay off my debt (which isn't much) work on my credit score and then purchase a used car, but I don't know that my car will make it a year.

I'm mostly looking for advice on what to do. I make decent money but can only afford around $150 per month for a car loan.

the_journeyman

The problem with getting a loan with your credit as you describe it is the interest rate. You'll have high interest, making you pay WAY more than your initial price for the car. Most credit "rebuilding" and "everyone approved" dealers have high markup and high interest rates.

My opinion is to fix what you have to get smogged, use a trustworthy shop and get to know your mechanic. Much better that way than a dealer. They'll have better rates and can fix a little at a time. They can also help you better predict if you're headed for a major failure.

JM

iam_thatdude

FInd a guy who has money and get him to fund your life.

Cindym82

Ford works with ppl with bad credit, use your current car as a trade in to lower the price for the "new" used car. Also, this car payment will improve your credit score so down the road when you're ready for a new new car you will be able to be approved for a loan with low interest.

jodyl70

FInd a guy who has money and get him to fund your life.

Bwahahahahahahaha! Why don't they teach advice like this in school????

Hook a sister up!

:laugh:

Bakerchk

FInd a guy who has money and get him to fund your life.

Oh jeez, thanks! haha

jpburcham

I'd suggest fixing the sensor (to be able to get it to pass the emissions test), get the heater core fixed (to stop it from leaking water), and sell this thing. I'd use whatever money you can get from it, and put as much with it as you have, and get yourself a good Toyota, or Honda.
Personally, I don't borrow money, so my opinion won't include a car loan.
Get yourself a decent Toyota, or Honda, pay yourself a car payment, and in about a year, sell the car, use the car payment you saved, and upgrade. Do this a couple of times, and soon, your driving a $10K ~ $15K pretty nice car.
I checked on www.kbb.com for what they think the car is worth, and I'm guessing that your estimate on $3,000 is pretty close.

Best of luck ~ and remember ~ your mileage may vary!

bm99

Save as much money as you possibly can for the next year or two. Fix whatever you need to fix on your crap car to make it legal. Heat and AC aren't necessities.

Once you've saved enough to buy a new used car, do it. OR, spend that money on fixing your credit so you can get a loan. I would just save for the car though and use what you would have spent on a car note on your credit.

dovesgate

First of all, shop around for better labor rates; some shops will price match or better. You can even find your own used parts through salvage yards for less than regular stores and simply pay someone to put them on. Lots of shops wont do it but smaller ones usually will and there is usually a mechanic here or there who works on cars after hours for cheap; ask around.

All three things you listed are things that will make your check engine light come on. Try having a mechanic clear your codes and see how long it takes for the light to come back on - you may be able to squeak under the radar by having this done if the code stays gone long enough to get to the smog shop and through the procedure.

You simply don't sound like you have the cash to get a new car and interest rates from the loan are going to suck you dry. Bad credit means you'll pay much more than $150 per month for a loan unless it's through a place where you end up paying all the interest before any principal is touched even if you pay extra. So not worth it.

Once you've sold your vehicle, keep an eye in the newspaper for auctions of lien sale cars in your county paper. Most tow companies won't advertise them in their home cities but will in the major newspaper for the county - you can get seriously cheap and well running cars this way and you don't need a special license.

Or, just go visit your local tow companies to see what you can get. You aren't going to be able to finance at most of them (cash only, as-is sales) but you can get really good deals and a decent car. Just make sure you take a mechanic with you to check them out. Beware any company that does oil changes and stuff on the cars before putting them out for sale - there could be a major issue they are covering up. Also keep in mind you're going to get what you pay for - if you buy a beater for $500 you're getting just that; a beater. Any decent company will also be willing to look at their paperwork to tell when a vehicle was last registered. Here in California, a car registered out of state with no record here will not have back fees no matter when it was last registered. This may vary according to your state regulations.

Another thing to keep in mind is that if your vehicle has a salvage title it is NOT worth whatever it says on kbb.com; it is worth about half.

juliecat1

Fix the car just enough to pass inspection. You dont want to overinvest in its repairs because its not worth it for what youve already put in. Add a car payment into your budget that will get you where you need to be before you need to inspect again. pay outright for the car. You might also want to consider, if you havent already, a car emergency fund just incase.

AR73

Ford works with ppl with bad credit, use your current car as a trade in to lower the price for the "new" used car. Also, this car payment will improve your credit score so down the road when you're ready for a new new car you will be able to be approved for a loan with low interest.

Great advice! Never mind the car issue now, think of your credit and your chance to show the banks that you learned from your mistakes.

Becky_Boodle

FInd a guy who has money and get him to fund your life.

Bwahahahahahahaha! Why don't they teach advice like this in school????

Hook a sister up!

:laugh:

Well...he is "that dude"

iam_thatdude

FInd a guy who has money and get him to fund your life.

Bwahahahahahahaha! Why don't they teach advice like this in school????

Hook a sister up!

:laugh:

Well...he is "that dude"

That's d@mn skippy

Im That Dude...and you can fill in the rest of the sentance!

Bakerchk

Thank you everyone for the advice. I really do appreciate it and I am going to take it. I do not want to put myself deeper into the whole. I will fix the car to pass smog, try to drive it for as long as possible and work on fixing my credit. Hopefully in a year or so, my credit score will be better and I can have whatever I sell the car for plus some money saved up (or money from my tax return) to buy a used car (or pay most of the price upfront and buy a used car and only finance a thousand or so).

ninerbuff

Get a "racer" for a boyfriend. He'll get him and his friends to fix the car up for you for free. Dudes like that just want to fix cars for the experience. Heck maybe even if there's a high school class that wants to take it on. All you have to fund is the parts.

Get it fixed. Don't pay more because of higher interest rates.


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Captain_Tightpants

If you do go in for a newer car on a loan, bear in mind that Toyotas and Hondas are gonna cost you. You can get nearly the same reliability in a Kia or Hyundai for a smaller monthly loan.

bytemeeeeee

Ford works with ppl with bad credit, use your current car as a trade in to lower the price for the "new" used car. Also, this car payment will improve your credit score so down the road when you're ready for a new new car you will be able to be approved for a loan with low interest.

Great advice!

LovingLisa2012

do yall have any small car places that does in house financing ?

you pay them every 2 weeks till you pay the car off ( 1- 2 years depending on amount of car and down payment )
the 1 my mom went to also reports to credit companies, so it builds her credit back up

my mom did this with 2 cars so far and is about to upgrade again and get another this weekend (when she upgrades, i get her old car)

Ocarina

Funny I should be asking this, seeing as how I go to school for Accounting... Anyways!

So I am in a bit of a pickle and need to explain a little background so, sorry if this is lengthy.
I bought a 2000 VW Golf 1.8T about 2 years ago. The car was salvaged, but fixed (semi) properly. I only paid $2,800.00 for the car, which is a pretty good deal. Over the past two years I have put over $3000.00 into the car. No major issues but now it's starting to crap out on me. The heater core is bad and the A/C unit is bad. Both issues will cost around $500.00 a pop to get fixed at a shop. On top of that, some sensor is bad which makes my check engine light come on, and that will cost $350.00 to fix. The cars registration is due and I can't register it because it won't smog. Which almost means even if I wanted to, I couldn't sell it because of the check engine light. So I decided instead of fixing it, I would get a loan for a used car (nothing crazy, around $5,000-$6,000 or so). I would like to purchase a used Toyota Camry or something. Just something realiable that I could drive for awhile without worrying about it. If I could get the loan, I could fix my car over the next 6 months or so, sell it for around $3000 and the loan would be close to paid off. However, because my credit is bad (hospital bills from my surgery and a credit card from when I was 18) I can't get a loan. the one place I got approved for is Paul Blanco, which their variety isn't great and they mark everything up.
My worry about getting a loan is that I will be paying way more than what I want for a car because since my credit is crappy not many people will approve me.

What do I do? Do I shop around a bit, and be patient while I look for something? Should I get my car fixed and drive it until it dies, and then what? I am so confused because I am terrified my car will take a crap on me, and then I'm screwed and I also don't know if I want to get a loan for a car. I would love to wait a year, pay off my debt (which isn't much) work on my credit score and then purchase a used car, but I don't know that my car will make it a year.

I'm mostly looking for advice on what to do. I make decent money but can only afford around $150 per month for a car loan.

Speaking as another accounting major.

Loans = teh suck!
150 a month isn't much. For someone making decent money... but even in that case you should be financially aware enough from school/experience that it's much better to SAVE and buy the car outright.


A $6000 loan is not something to scoff at. Think about the interest... Especially when your car repairs are cheaper then that. You have quoted three prices for repairs which are $1350 total. You also say the car won't last more then a year you think. Did you get this directly quoted by a mechanic? Have you thought about getting more then one quote done?

You don't need A/C. Sorry but we didn't need it a hundred years ago. It's a luxury. If you are in a cold state you will need heat to see out of the windows. But 500 for that? Way cheaper then 6000 + interest.

You say you only have a year on the car? Says who? The mechanic? A year is enough time to save 6000 or whatever for a new car if you make decent money anyways. You should ride it out and deal with what you have now as it will save you from having a ball and chain to a lender.

Also loaning or buying another car does NOT guarantee worry free. You could potentially have MORE mechanical issues with the NEW car. (Used) And ... well... the worst place to be is loaning money out and not having a running car because it ends up breaking down.

Make a fund for car repairs and save up for a new car. You'll be fine.

Don't go into debt. It's never a good thing, especially with cars and at such an affordable price.