Is it just to hard to go from a 08 car to a junker

[debtmonster]

I have a pretty narrow view of credit at this point. I think it's misused more often that it's used correctly and it can be ruinous.

Question: What will you do for a vehicle/with your auto payment when you experience the unemployment you are attempting to protect against?

You need to get a residual income to fight that off some how. Be in business for yourself and don't rely on employers to pay you. It took me nearly 20 years of work to figure that out.

Remember the pyramid scheme. Do one of those like the corporations and MLM's do. Start something and have a bunch of people under you working making you money. Look at all of the CEO's who started companies. They can take as much time off as they want and still have money coming in. Same with all of your basic MLM's. Join Amway, Herbalife or whatever MLM you like and make it work. Have hundreds of thousands of people under you making you money.

When you work a day job, you earn 100% of yourself. I'd rather earn 1% of 100 people.

The other option for residual income is to invest in the stock market or some other thing. That requires too much capital up front to do. Starting a company or joining an MLM would be easier on the wallet in the beginning.

[BkinTX]

I have a pretty narrow view of credit at this point. I think it's misused more often that it's used correctly and it can be ruinous.

Question: What will you do for a vehicle/with your auto payment when you experience the unemployment you are attempting to protect against?

[Logan]

Not one-dimensional. Truthful.

You have 12k in the bank at 2.25% and a 12k auto loan at 7.99%. The auto loan interest cancels out the interest yield from the savings.

No one is saying you can't finance and keep the 12k. If that's what's best for you, then why worry what we think?

But let's be realistic. You can't boast about your savings interest rate to argue FOR financing a vehicle at a much higher rate. Doesn't work.

One dimensional because you're only looking at one part of a many part equation.

I don't worry about what you think---I just have fun arguing with you guys and it does help others reading this with there decisions.

I happen to think credit is a good thing when used properly but 2 years ago when I was going through my BK I said I'd never finance anything again.

Logan
Posing from Fort Worth TX---at least today.

[BkinTX]

Not one-dimensional. Truthful.

You have 12k in the bank at 2.25% and a 12k auto loan at 7.99%. The auto loan interest cancels out the interest yield from the savings.

No one is saying you can't finance and keep the 12k. If that's what's best for you, then why worry what we think?

But let's be realistic. You can't boast about your savings interest rate to argue FOR financing a vehicle at a much higher rate. Doesn't work.

[Logan]

It doesn't matter how much interest your savings yields if your auto loan is financed at a higher rate.

LOL---one dimensional answer once again!

[BkinTX]

It doesn't matter how much interest your savings yields if your auto loan is financed at a higher rate.

[Logan]

At the same time, the problem with too many people is how they REFUSE to see themselves or their situation or their decisions differently no matter how much reasonable advice they get. Bankruptcy should be a big huge warning sign that you're doing something wrong and it's time to let go of the same flawed logic that got you here.

You're right, everyone's situation is different. But when the advice you're getting directly disagrees with your assessment of the situation, it's time to stop and think and ask yourself why you cling so tightly to the broken ideas that brought you to the brink of bankruptcy.

For example, the idea that a vehicle is a tax write-off is a foolish one. The fact is that you need to SPEND a Dollar to get any tax benefit and the tax benefit is ALWAYS less than the Dollar. Why then is it a good idea to WASTE a Dollar so you can save 25-Cents on your taxes? (Or, 50-Cents or even 75-Cents?) True, if you don't SPEND the Dollar you get NO tax benefit... but you get to KEEP the whole Dollar! Spending $12,000 on ANYHTING where you could have managed just fine with something else for LESS is WASTING DOLLARS and no amount of tax write-off will help you as much as leaving those dollars un-spent.

Look around, there's no shortage of people who live their lives and run their businesses on vehicles that are worth far less than $12,000. The question is: What's wrong with you that you can't imagine doing the same?

Please understand that I don't mean to attack you personally. I feel like you have a solution stuck in your head that no amount of reason will change. (And that's a problem that I've had to face myself!) To be successful after bankruptcy you need to see things differently so you can avoid landing right back here again.

Dude--the tax write off really has nothing to do with the financing of the vehicle. I would finance either way but it is a benefit so why wouldn't I throw it out there for consideration.

Also, your last sentence is without merit. How Am I not seeing things different than before my BK? I have the cash to pay for my car but I've decided that I'm better off financing it so that I have that cash in a 2.25% interest bearing account in case of an emergency. If I didn't have any money and I was financing the car then I would agree with your last statement.

Also, in regards to the type of vehicle--I need a car that can fit my girlfriend and myself with a child in the rear seat and the dogs in the back. It also has to be a car that my girl friend wants to drive and she wants a Nissan Xterra so that is most likely what we're getting.

I will most likely finance it in my name and pay it off quickly but if I can't get an acceptable interest rate (I applied a year ago and had an offer at 7.99%) I'll just have my GF finance it with her 790+ FICO score.

Logan

[BkinTX]

I do agree with DebtMonster that we need more information (than what you shared initially).

It appears you have your mind made up already as to what you should do.

[debtmonster]

I agree with the above post wholeheartedly. But remember, I just showed you those trucks for as low as $5,000. $12,000 is more than DOUBLE what I found that you could have worked with.

[Keebler]

The problem I have with this forum is I find alot of the advice to be one dimensional. It is the main reason I post here. It is easy to criticize someone for getting a car loan at 19.99% interest but until you know all the facts you really can't give sound advice...

At the same time, the problem with too many people is how they REFUSE to see themselves or their situation or their decisions differently no matter how much reasonable advice they get. Bankruptcy should be a big huge warning sign that you're doing something wrong and it's time to let go of the same flawed logic that got you here.

You're right, everyone's situation is different. But when the advice you're getting directly disagrees with your assessment of the situation, it's time to stop and think and ask yourself why you cling so tightly to the broken ideas that brought you to the brink of bankruptcy.

For example, the idea that a vehicle is a tax write-off is a foolish one. The fact is that you need to SPEND a Dollar to get any tax benefit and the tax benefit is ALWAYS less than the Dollar. Why then is it a good idea to WASTE a Dollar so you can save 25-Cents on your taxes? (Or, 50-Cents or even 75-Cents?) True, if you don't SPEND the Dollar you get NO tax benefit... but you get to KEEP the whole Dollar! Spending $12,000 on ANYHTING where you could have managed just fine with something else for LESS is WASTING DOLLARS and no amount of tax write-off will help you as much as leaving those dollars un-spent.

Look around, there's no shortage of people who live their lives and run their businesses on vehicles that are worth far less than $12,000. The question is: What's wrong with you that you can't imagine doing the same?

Please understand that I don't mean to attack you personally. I feel like you have a solution stuck in your head that no amount of reason will change. (And that's a problem that I've had to face myself!) To be successful after bankruptcy you need to see things differently so you can avoid landing right back here again.

[debtmonster]

It is easy to criticize someone for getting a car loan at 19.99% interest but until you know all the facts you really can't give sound advice.

Then people need to sit there and type more like the way you just did in the above post. Give all of the facts. You'd be surprised at the number of lurkers in the same position as you that will benefit from your questions and answers.

Now that you explained the situation, it makes more sense.

The facts I needed for the search:

-Truck
-AWD

Needed for: winter & hauling stuff for rental properties.

Everything makes perfect sense now that you laid out the facts.

Cheap trucks with AWD do exist without having 125,000 to 150,000 miles on them.

2005 Dodge RAM 1500 w/ 60k miles for $10k That truck looks tight!!

2002 Dodge for $6250

2002 F-150 for $4895

So you dont need to spend $12k-14k on a truck when nice trucks like these exist. You just have to look.

Stop spending a lot of money for stuff. USE AUTO TRADER! You will save THOUSANDS from using this invaluable resource.

It must be 4 wheel drive and it must be reliable so a 7K car is NOT an option.

I just proved that wrong with the above examples by showing that cheap 4WD's can be found if you'd only spend the time to look at not waste time driving around from Buy Here Pay Here lot to Buy Here Pay Here lots.

[Logan]

Also Re: Logan

If you really want to finance something, there's always the option of making a large down payment so you're not financing SO MUCH.

If you are comfortable financing a 12k vehicle (with a bad interest rate and 2 year term, something like $600 a month), that's your business and there's nothing wrong with it.

But there are lots of options, including paying cash for something cheaper.

The problem I have with this forum is I find alot of the advice to be one dimensional. It is the main reason I post here. It is easy to criticize someone for getting a car loan at 19.99% interest but until you know all the facts you really can't give sound advice.

For instance---my situation.

I have been unfortunate when it comes to employment and have lost my job 7 times over the last 18 years. I've also changed jobs for the better and have had 12 jobs in the same time period. When I make a decision to buy something I set a goal to how long I can afford to live if I lose my job today.

I can currently live about 12 months before I run out of savings if I lost my job today and that's where I want to keep my savings.

Next part of the equation---Why do I need a 12K to 14K vehicle.

Answer--I travel about 8 days a month and I need a vehicle for my pregnant girl friend in the winter time in the North East. It must be 4 wheel drive and it must be reliable so a 7K car is NOT an option.

What if I pay cash? That means I can now live about 8-9 months without dipping into savings and it will most likely take me a year to save the 12K I just spent since I have a baby on the way.

What if I finance? I keep the 12K, continue to save a smaller amount of money and I have the piece of mind that if I lose my job I can still go a year without dipping into savings. My car purchase won't be until Nov. so I will have more in savings to compensate for the increase in living expense due to the new vehicle.

Also, this vehicle will be used for work on a rental property I am about to purchase so there will be some tax benefit to offset the cost of the vehicle.

Is there a wright or wrong answer here? Of course it will save me money if I pay cash but it is a minor amount of money is the scheme of things and the safety of my GF and future child and the piece of mind that I can live a year without a job is certainly worth the extra money I pay in interest.

Also, I predict that I pay under 7% interest a 5 year term so the reality is it won't cost me much at all and I will pay it off quicker than 5 years.

Logan

[debtmonster]

Just curious - we're looking at older cars that we'll pay cash for. How would you rate the jeep and kia as far as cost to mainain? I've heard some not so good things about both, but there's a surplus of them out there cheap, so I'm tempted....

The 6-cylinder Kia's are super expensive to maintain once they get miles on them. The dealer wants about $1000-1200 to change the timing belts on the dual over head cams for them.

I would always look under the hood and see how easy it is to get to the spark plugs and everything. I would try to avoid vehicles that have timing belts. When they break, it will leave you stranded. Some engines are interference engines so when the timing belt goes, it takes the valves with it.

Some Dodge vehicles may have a chain instead of a belt, such as many of the Dodge Carvans.

Something like a 2004 or new Kia 4-cylinder would be great, reliable transportation. Okay, not great... but reliable. My wife hates those cars.

But if you want a cash car to get around in, the Kia's should be a good option. Just stay away from the 6-cylinder Kia Sedona's and Kia Sorento's. They are nice vehicle but are very expensive when you hit high miles. The cost of maintaining them can actually cost as much as the vehicle is worth!

[Strapped4Csh]

We own 3 late model cars, '99 Kia Sportage, '95 Jeep Wrangler, '93 Chevy pickup, bought and paid for, high miles on 2, but we OWN our cars. All our exempt and we can keep them, we came in under the exemptions for Indiana. We do not intend to buy a car, we will drive these until the wheels fall off. We learned that living within our means, means newer cars aren't important. Driving a new car or newer car just doesn't fit us financially. I know a new car would be nice, don't get me wrong, but the payment that goes along with it, would make me sick each month.

Maybe someday, but since my dh has a good friend who's an awesome mechanic, we won't probably be changing cars for a very long time. And if we ever do, it won't be a new car, it will be a nice used cheap car.

Just curious - we're looking at older cars that we'll pay cash for. How would you rate the jeep and kia as far as cost to mainain? I've heard some not so good things about both, but there's a surplus of them out there cheap, so I'm tempted....

[debtmonster]

Suze Orman says, "If you can't afford a car with at most 36 payments, then you can't afford the car."

I tend to agree with that. I've been doing the 60 and 72 month deals all my life and look what a wreck it has made of my life.