Decision on a car

[deepinit]

We fianlly made a decision today to buy my wifes car out of her lease ( up the end of the month) for $17,980 - after tax its about $19,000 - The financing is the beat down - we are at 60 months and 17.9%!! for a total of $483.00 per month.
My attorney told me he couldnt encourage me to incur debt prior to filing buit that we would be ok if we did.
Our logic was this - my wives car is an 07 has 46000 miles on it its a honda and will last a very long time - hopefully another 8 -10 years.
We could have purchased a used car under the allowance ($4000) and been fine with that - our struggle was what to do when things started breaking - we have a large young family and are out doing things all the time. I was worried that buying a used vehicle for our family size would have cost us about $4-5000 and had about 100000 miles on it - what if it wouldnt last through our chap 13. and we had to repair and replace things often - weve been thorugh that and its awful. What if it did last and we had to go right back into car debt after the bk at a high interest rate and fewer choices.
I am curious how the bk will affect the loan - I am assuming we will go down to till rate about 5.5% instead of the 17.9% after we file in a month - does anyone know how this happens?
Hopefully its the right decision - we struggled with this for the last month - we almost feel that no matter what we did we would be not making the right choice.
We have made the decision that this will be the last car that we ever borrow on - from now on it will be cash up front.
We have been paying cash for everything since November and will be filing the end of this month - cant wait to get this behind us and get rid of this guilt and embarrassment.
any thoughts on how the loan process works when we start our bk - as far as the interest rate changing? I am assuming that we will pay the interest due on the principal alone about $19000 not the entire $29000 we will be paying if we paid all the way through.

[sheilaE]

Question: Regarding we could have purchased a used car under the allowance ($4000) and been fine with that. Just wondering what you mean by allowance because we just purchased a used car to get us through our up and coming chapter 13. It was $13959.00 with a whopping 23.99% rate. It was torture getting the loan approved, but we feel pretty good that they actually approved it being our credit scores had already dropped into the 500's! I was just confused by what you meant. Thanks!

[deepinit]

our attorney told us that we could have a paid off car with a value up to $4000 - maybe $5000 max before the court would want to take the car and use its equity. I hope I am explaining that correctly.
I took it as them not wanting us to have a ton of debt but a paid off car thats worth more that $5000

[sheilaE]

Oh ok, I get it. I hope it's ok that we bought a used car. Still worried about it even though we got the same speech from our Lawyer---his words....I can't encourage you to take on new debt, but with that being said-it's a good idea.

We had to pay out over $1400.00 in car repair bills last year, which is why we needed something reliable.

[momofthree]

I don't think you necessarily only have 2 options (buy out the current car vs. buy a beater w/100,000 miles). You could always buy a newer used car or minivan for less than $18k. That seems really high for an '07, even with the low mileage. Have you compared it to the private party kelley blue book value?

Have you looked at your auto sales classifieds/craigs list ads for your area to compare pricing?

Just an idea. Lease buyouts seem to be way overpriced a lot of the time.

[deepinit]

our lease buyout was for $17390 - the kbb value of the car and local dealers pricing is around $23000 - craiglist is also about the same pricing for that vehicle.

When we leased the car 3 years ago we negotiated a good lease buyout. I could sell the car for more than I currently owe - but couldnt get the same quality car for the price. The other problem we had was qualifying for a loan - we were turned down by several people - capitol One and others -
Honda is financing only because we never missed a payment.

I know we could have gone to a buy here pay here type place or continued to try to go to dealers and get humiliated by not being able to qualify for cedit, but this seemed to be the lesser of the evils.

We'll find out in a few years if this was the right decision.

[momofthree]

our lease buyout was for $17390 - the kbb value of the car and local dealers pricing is around $23000 - craiglist is also about the same pricing for that vehicle.

When we leased the car 3 years ago we negotiated a good lease buyout. I could sell the car for more than I currently owe - but couldnt get the same quality car for the price. The other problem we had was qualifying for a loan - we were turned down by several people - capitol One and others -
Honda is financing only because we never missed a payment.

I know we could have gone to a buy here pay here type place or continued to try to go to dealers and get humiliated by not being able to qualify for cedit, but this seemed to be the lesser of the evils.

We'll find out in a few years if this was the right decision.

In that case, it sounds like a wise decision to buy it out.