best financial course of action?
Hello all,
Just wanted to get some opinions regarding my situation and the best course of action I can take to get out of it.
Long story short, I'm a middle class student who made the DUMB choice to purchase a brand new car while simultaneously trying to finance myself through school.
Right now, as it stands, I have approximately $19,000 left on the car and I'm in approximately $9,000 of student loans, and I will incur another $6,000 before all is said and done. While I'm doing this, I work as well which works itself out to about $2200 a month. Car payments are about 530 a month plus insurance and gas. Obviously this was a dumbass move on my part and easily the worst mistake I've ever made.
What I wanted to know is, financially, what would you do in my situation? Put all excess money towards paying the car off fully? Pay it down more and then sell it privately? Put 50/50 into the car and paying down my student loans? Any suggestions appreciated.
a car is a depreciating asset my friend....the longer you hold it the less sense it makes to sell. Start paying off your car payments first. Im sure the interest from your student loans is 0 or close to it.
It sounds to me like you make enough money to cover your expenses so I do not understand the urgency to pay-down the debt. You should always pay off the higher interest loan, which in this case would likely be the car loan (but not necessarily). I would pay more than the minimum payment on each loan but also begin to build an emergency fund so that you can weather any unforeseen storm.
Don't they give you like 100 years to pay off student loans? Use you're new car what it's made for and crush box, kid.
If you are still in school why are you worrying about student loans?
Based off of this post it sounds like this is only the first of many dumbs things you're going to do in life. Ya, buying a brand new car as a student wasn't smart, but panicking about your student loans before you graduate is even dumber. One would assume your income is going to increase from $2,200/month post-graduation, which makes a $530 car payment more reasonable. Still, you have a couple of options to get out of this, depending on how much cash you have on hand (which I'm guessing isn't much).
Depending on what similar cars are being listed for online, you may be able to sell it privately with very little out of pocket. If you're only a few thousand dollars upside down, list it online for $30 and craigslist and see if you get any bites in the next 60 days. Get yourself something more realistic and be done with it. If you don't have the money on hand to sell it privately, you can go trade it in somewhere for something cheaper. Obviously, the downside here is that your negative equity will be financed with your new vehicle, meaning you have to settle for an even cheaper car.
Honestly, I'm guessing you don't have the cash, so I would suggest trading it in for an LX Accord and be done with it.
What Rupert said is pretty much word for word what I thought was the best path available.
Appreciate all the responses.
Stage a collision and make the car loan somebody else's problem. Peer-to-peer rental is also an option but it wont stop the bleeding like good old fashioned fraud. Ave Satanas
Et doloribus vel aspernatur quibusdam nemo nihil. Aut totam voluptatem voluptatem voluptatum beatae ullam voluptatibus. Ea quis explicabo veritatis quidem aperiam et recusandae rerum.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...