May have to sell the car....need suggestions
 

So here's the break down. I bought an 00 S with 30k last year after driving one and loved it. I am a 25 yr old school teacher and have been renting to own a house my mom owns for the past 7 years. I haven't had to pay rent in years as I have worked at my mom & stepdad's business on nights and weekends with no pay to cover rent. That's pretty much why I have been able to afford the car on a minimal salary.

Well my mom is now getting a divorce and is taking back my house so she has a place to go. I am not being kicked out but all my **************** has to go and I really don't want to have to live with my mom.

So here's where I am at right now.....

1.Sell the car to get rid of a $300 payment (3 more years till payoff) and consolidate my financial loans in order to get a place

2.Try to find a low budget foreclosure house that I can afford and fix up and see if I can roll the rest of my loan (roughly 10g's) of my car into the mortgage

3.???? Suggestions?

I don't want to get rid of the car but unless I win the lotto, I pretty much have no real options to get out on my own anytime real soon. Since the split and being back to school now, I have not been working at the business as an extra means of income.
I don't want to lose the car but I am also in fear now with my budget that if anything serious would go wrong with it I also would not be able to afford to buy the parts (I was a mechanic for 6 years all through college)

Thanks for the suggestions..

I cannot help you with your questions, but I was considering powdercoating my wheels black (black boxster) and you just convinced me to do it.

Could you tell me how much you paid to get that done?

Actually I scored those off of Craigslist already black for $400 with tires. I think generally its around $100 a wheel to have them powdercoated though plus the cost to have them stripped and treated.

Sorry to hear about your situation.

I suppose you only had a verbal agreement with your mom? If you've been upholding your part of the agreement, technically she shouldn't be able to break the deal.

However, if that's not possible, then I would look for a modest foreclosure that you can afford. Your $300 car payment isn't that bad, so unless you downgrade to a Hyundai I would keep it.

But, I wouldn't throw it onto the mortgage. That would mean you're paying for your ten yr old car for the next 15 or 30 yrs. Not a good idea. Here are some numbers to consider:

Don't know your current loan %, so I'll assume 7%. At that rate, the interest on $10K for 36 mo is $1115.

5% for 180 mo is $4234.
5% for 360 mo is $9326

You may need to get a real part time job to help get you through this rough patch, but it sounds like you're already doing that.

Good luck.

How bout asking mom to buyout the boxster loan, it's not like 10k is doing that great invested anywhere else at the moment, you pay her simple interest and you both make out instead of the bank.. Can you still get the side gig with your mom's ex or is that too touchy? As sickening as it must be in the pit of your stomach, the best move if you are going to get a foreclosure is to strap in at her house and stockpile cash to pay down debt or to enlarge the down payment, good luck..

PS Don't ever let the kids at school find out, god this reads like the old mike meyer's middle aged man, skit....I'm old...

Just keep in mind that if you are currently tight, what will you do when something will break or need maintenance?.. Do you currently have another car or you'll just sell this one to pay another one and get back in the same situation?

If it makes you feel better
 

You're very young and still at the beginning of this journey of life. You have lots of time to bounce back. Things have a way of working themselves out. When I was 28 (early 90s) I went through a nasty divorce and property dispute. I thought it was the end of the world and my life would never be the same. Now I look back on those years and wonder what it was exactly that I was so upset about. Can't remember now! Sounds like you had a sweet deal at your Mom's house. This may be a good thing as it will give you incentive to get your own place. Otherwise you wouldn't have bothered, just by human nature. It's very rare that you gain anything by trading down or selling your car with a loan on it to get something cheaper. I've been there when I was younger and it never really turned out to be a good idea. I'd try to hold on to the Boxster, within reason, as long as I could. Hang in there!

sean

as a thought.... your mom is also going through bit of a tough time, maybe you could stay on till some dust settles, she'll probably need a bit of support from her number 1 son.

$300/mo for a car payment seems to be rather conservative. You'll have a hard time beating that by much... at best you'll have a $190/month car payment for a used something rather. Depends on your priorities but maybe taking an odd shift or 2 on the weekend for the $110 might be worth it. For me, the real question here is can you afford the odds and ends that Porsche ownership requires as opposed to the maintenance free experience Toyota or Honda offers? IMS/RMS/AOS, more expensive tires/brakes, canvas repairs, top cables, 9qts of syntec +$18filter all come to mind.

My Toyota has required 1) gas and 2) oil in order to run down the road. Yes brakes and tires to keep it on the road safely, but that is all. All of which are cheaper than the Boxster. (89octane for 32mpg, $5 oil filter, tires cheaper and last longer) Honestly it may be worth considering getting a cheap Toyota, running it for 5 years while you sock away money for a Porsche and don't have to worry about the ownership costs so much. OR decide you only are young once and definitely want the experience of Porsche ownership, at the cost of logging pt job hours. I drove the Toyota as long as I could before deciding I need my convertible before I'm too old to really have fun with it. (Admittedly I feel like I stole my uncle's car sometimes)

GL!

I fail to see how selling the car will help you. What are you realistically going to get for an '00 S with 30K+ miles on it??? $15K? I highly doubt you'd actually get much more.


So then what? Pay off your $10K loan and end up with $5K? What kind of car areyou going to get that is more reliable than the car you have now (the devil you know). I just don't see how that helps.


I suspect you already realize that this is a car you shouldn't have bought in the first place.


I'd suggest you wait until you find a COMPELLING deal on a property. They are out there if your patient. In the meantime -- live with mom for a while.


Have you considered wrenching part-time? Folks will pay for a mechanic.





/

Which is worse?
 

a) Picking up a girl in your Boxster and then going home with mom in the house?
Or b) trying to pick up a girl in a beater beige camry?

Seriously, I would try to make it till spring with mom, save all you can and then pick up a foreclosure. Good time to buy esp if you are handy.

There are a ton of foreclosure in the pipeline - so be choosy.

+ 1 timing is everything in life, later you'll know that you did the right thing..

dude...

RENT a place. If you can't afford your $300 car you definitely can't afford a much bigger liability like a house (insurance, maintenance, utilities, taxes, etc.)

I like the idea of a foreclosure I'm actually doing the same in Florida. I started out helping out a relative who got in over their head on investment properties but only because the house will rent for the mortgage payment and they put down a pretty big down pament so the balance is manageable. Still an equity loser for the next 10 years (at least) but for now there's no mileage in screwing the bank if the renter can pay the montly nut. All that got me looking at listings and I've been to central and south florida and it is not unheard to see cash buyers walking away with homes at 10% of their 2006-2007 selling prices. BUT you have to be a cash buyer and I really don't recommend buying into a falling real estate market with borrowed money. Warren Buffet made a similar statement about taking risks with other peoples money, the surest way to go broke. This real estate market still has 12 to 18 months of down side and it could be the steepest yet. Banks are sitting on homes that are even listed yet for fear of flooding the market with more inventory. And that doesn't include the millions of homes that are inevitable foreclosures where the buyer can pay but the underwater math will never work for them. The house would have to double in value just to break even over the next 20-30 years. Jingle mail. People will just take out another loan for a bigger cheaper house with a different bank and screw over bank #1.

To be quite honest with you unless you are buying homes to rent them out (income property) I don't see the advantages of owning your own place right now. You have your whole life to buy property but your cash has this thing called "time value".
it's a special advantage that most 25 year olds piss away and has a limited time frame. The global economy is taking off with raw material production in Brazil, Chile and China surging. Think oil, steel, copper, iron ore you name it. Small (that's all it takes) EARLY investments now could pay huge rewards down the line.
Like buying Microsoft in the 80's.

1-Pay off your car while putting some away to invest.
2-take a second job bartending
3-pay your mom rent (find a girlfriend who has her own place, it's called a recession).
4-make a goal to stash away 8K a year while making payments on your car (good for your credit).
5-rethink your situation in 18 months. The govt is out of the mortgage backed securities racket for now and the home buyer's tax credit is history. There are more layoffs and bank closings coming in 2010 and 2011. Housing is only going to get cheaper while your bank account swells. Houses can't go up in value or even hold their current prices if people's incomes are not rising. Nobody and I mean nobody is betting on people earning more any time soon.

+1 on keeping the car.
I work at the car dealership and see people "downsize" all the time. They sell us their originally expensive cars that were half-way paid off and buy chevy aveos for similar money just to get the payment down. But guess what, now you have to pay this lower payments for another 4-6 years.
better option for them would be to just refinance their existing cars, raising their payment period back to 4 years granted you did not get a crap-load of student loans that have killed your credit.
That way - your payments are more affordable and if you have some left-over money - you can make an extra payment every now and then.
Yes, the parts for your boxster are more expensive than parts for a Yaris, but at least you have had your car for awhile and already know whats wrong/goes wrong where you can get a new car that will crap out on you too.
Also, it may seem wrong to install a set of Cheap tires, Autozone brake pads or have a tape covering the crack on the plastic window but those are the things you can live with untill your financial situation improves.

There is nothing wrong with having to stay at your moms till the rough patch is over. Times are tough and everybody has to deal with it one way or another.
Just my $.02

Thanks for the replys everyone.. I also agree with most of your comments on my payment isnt very much and I haven't had any problems paying it and I probably wouldn't be much more ahead if I were to sell it and buy a beater. So far the car hasn't caused me any problems other than a few tires and a CEL that comes on occasionally.

I guess until things change I should just start trying to save and pay down some debt and hopefully make a move by spring/summer whether that be to buy a place or sell the car/other things.

I knew when I was buying the car it wasn't the most practical or cost effective, but I'm young and dumb and had/have that you're only young once mentality.

Hopefully everything will start looking up here in the near future.

^practical car no. But if your monthly payment is $300 and your insurance is low in that state I don't think its much of savings if for instance you'd bought an econo car that only had $150 monthly payment. This is MUCH MORE than twice the car.
You should concentrate on paying that car off soon if you are not penalized for paying off early. Car loans are bad news, many if not most get you for a fixed amount no matter how early you pay it off. When you look a that amount and what the car ends up being worth its truely insane. I can think of nothing worse in life than to be paying interest on a rapidly depreciating asset. And here in NJ the car insurance companies could care less if your car is worth half what you paid for it but the montly rate goes up! Between interest and insurance that is just eating away the return on all your other investments and costing huge amounts in future investments you lost out on. I'd encourage you to contact a financial planner. Those guys need the work right so they're not charging what they were two years ago. They'll lay out a great strategy for you to stick to. At least that way you have some direction. Being that you're a teacher and young I don't think it will be to complicated a plan.

Here is some really good advise for you:



Buy a good book (or two) and get serious about money. It will change your life.


Start here (by Dave Ramsey): The Total Money Makeover: A Proven Plan for Financial Fitness



Let us know how your situation turns out.

Jake everything will be fine, it sounds like you have a solid career path, relax, enjoy being young otherwise the adage of doing it once is moot. You'll get a house, in the meantime enjoy your parent, having a loving one isn't something to take lightly, even if that does mean an occasional C block...

As a seasoned residential & commercial RE developer/owner/manager and enthusiastic student of the RE market, I'd like to add my $0.02:

Keep your car, rent a cheap place, stockpile cash and invest a chunk in mutual funds - for the long term, and buy a house when you can really afford it.

Why NOT to buy now:

- Dayton area prices ($/sf) are very low, have gone nowhere for the last 10 yrs (see zillow.com), and there's nothing happening in the regional economy to suggest a meaningful positive change any time soon.

- Foreclosures in that area are at a high level - and rising. Not good for prices. (zillow.com) It's going to take YEARS for the market to absorb all the foreclosures and get back to "normal."

- Rents are low. Almost without question you can rent for far less than buying and be in a more comfortable place in terms of financial security.

- A cheap house is going to need lots of TLC, your time & $$$. If your furnace takes a crap, do you want to (1) come up with $1500 to replace it - or (2) call your landlord and let him/her deal with it? Answer: #2.

- As another poster said, you really can't afford to buy if you have to trade down from a $300 car payment. Trade down to what, a bicycle, a Corolla? I'd rather have bamboo stuck under my fingernails. What ARE you thinking?

- Almost all of your monthly payment on a 30 yr mortgage is interest for the first 5-7 years. You are effectively renting your own home (no gain in equity from paying loan down) - with all the costs of ownership to go along with it. If prices are flat, where's the upside?

- The tax "benefit" from the mortgage interest deduction that realtors love to tout is insignificant on a teacher's salary (actually on most people's salary). This should never be THE reason to buy.

- A house is a place to live and for some people a vehicle for forced savings over the VERY long term through paying off the mortgage. It's not an "investment." There many other places for far better returns.

Bottom line: Buying in your situation offers no near term upside and possibly a lot of downside if the house turns out to be a POS. In 5+ years when you're really ready to buy, houses in the Dayton area will still be just as cheap as they are now, maybe cheaper. Enjoy your Boxster and have fun with your life.

I agree with fatmike. My wife and I took the Dave Ramsey course, made a difference in our life. Look into it or another financial course. I was able to buy my boxster two years after taking the course because I was able to pay off loans/credit cards and using the tricks for buying anything the course taught me.