Never Ending Car Payment...

[Ravenous Wolf]

Here is one thing that is constantly keeping me in debt...

I have paid off my truck years ago and right now it is at 131k miles and I am hoping that I can take it well past 200k.

When I got married, my wife was struggling to make her car payments. We had always intended to start a family right away so she got a new SUV. I was surprised at the whopping payments but she explained that the new SUV was also covering TWO negatives equities of two previous cars...

Fast forward a few years... I finally got the balance down to like around 8k but it was still in negative equity I still owed more than what it was worth. Now that we have a third baby on the way, my wife got a van which was something that we really needed...

But what bothers me is that this is a vicious loop because this could very well be a never ending car payment. My wife has never owned a car outright before and she has never traded in a car that didn't have negative equity. And in some ways, I don't think that that is ever going to change...

And it is easy to say what needs to be done in a marriage but every marriage is different with its own set of issues...

I just wanted to know how other people dealt with being in that situation of a never ending car payment...

[willingtocope]

We've been married for...ah, gee...a really long time...and the only cars we ever owned outright was a '63 Corvair that leaked oil into the cooling fan. Turn the heater on in the winter, and the car would fill up with blue smoke. That was actually our first "second" car. The other one was a 1983 VW golf that our son bought for us when our car got repoed early last year two days before I started a new job. It didn't leak oil, but it stalled whenever you took your foot off the gas.

Personally, I'm not sure car ownership is a required part of a happy marriage or single life for that matter. We now have a 2006 mini-van and we just include the payment in our monthly budget...housing, food, clothing, car payment.

[VeVe]

Why can't you keep a car until it's payed off in full?

Even before kids and marriage, she wasn't able to pay one off in full, so that's a bit strange. How did she have two negative equities? I mean, what kinds of cars was she driving that she wasn't paying them off before she had to get a new one?

I'm 31 years old, on my third car, but I've always paid them off in full before buying a new one. My last car was around $24k, I paid it off in July 2005, and I just replaced it in September 2007. I have 5 years of payments to make on this one. I drive a lot, so I figure at the end of the loan, it will have over 100k miles on it. I would probably drive it for another year or two before buying a new one, or trade it in for something new.

I'm just trying to figure out how someone could have two negative equities carrying over. Only reasons I can come up with are: totaling a car with bad insurance coverage so you're left negative and with no choice but to buy a replacement, buying cars you can't afford and having payments going more towards insurance than principle, just getting tired of the car and trading it in at a huge loss.

I've never heard of anything like this.

[willingtocope]

I've never heard of anything like this.

Well, like I said...you've now heard of at least two people in this boat.

When we were younger and raising our kids, we used to to 50,000 miles a year on a car. There just weren't many models that would stand up to that, particularly when you're working 6-7 days a week and don't have time to take to the dealer. Nowdays, cars do last a longer, but, its just too tough to generalize.

Me...I've always thought of my car as just transportation. As long as I fit in it, and it got me from here to there, I was happy. Hell, I even had a Pacer...it had 137,000 miles on it when I traded it in after on 27 months...and the welded gas tank had come loose from the underside of the trunk so it leaked gas whenever I turned right.

Nowdays...we don't drive so much. My office in only 3.8 miles up the road. We've only put about 12,000 miles on the van we've got now and we've had it 18 months. Nonetheless, come May, we'll probably be looking to trade it in. We put NO money down on it...but we have been making extra payments. Maybe when we hand it back, we will have a little equity...but, I'm not counting on it.

[Big Time]

You're already on your way to solving the problem, it just takes time and a gameplan.

Your truck is paid for and most modern vehicles are good for at least 200K before they need any major repairs.

The SUV needs to be "retired" to where you just park it and quit paying insurance on it or spending any other money on it other than paying it off. Drive it around the block every now and then, but the liability of it nees to be mimized as much as possible. Once you get it paid down a little more, you can either sell it to break even, or just keep until it's paid off as an extra vehicle.

Once that is done, then try to make extra payments towards the principal of the new minivan until it's paid off. Most vehicles these days end up with 70-80k on them by the time they are paid for, which is less than half it's expected life, but that's also when it could use a complete tune up.

Your truck will eventually seem like a money pit in itself once it hits about 160K. Even a well maintained vehicle ends up with suspension issues at that mileage, which is why I always like having an extra vehicle that is old, but paid for, as a backup and an option of not spending a lot of money on a new suspension right away. You can also drive relatively safely on a worn out suspension for a while, but have to go slower.

I firmly believe that having an old beater that runs and drives is a key to keeping from having car payments at all for a few years.

[brokeinok]

I'm upside down on my car now too. I was desperate for money to keep from losing my house so I refinanced at a stupidly, ridiculous, kick me in the head interest rate. It's okay though. Learned my lesson, once I finish my refi on my house I intend to start making two payments per month and I'll probably keep it for a few years after it is paid off.

[Amerikaner83]

If your life lets you - keep the car. I'm driving a 97 grand Am with 150K miles, and I haven't had a payment since June. Sure, it isn't a "nice" car...and I'm fortunate that my DF has an Outback so we can haul stuff if we need to...but still.

[Hedwig]

You and your wife have to agree that this minivan is it. No more until it's paid off.

Drive all of your vehicles until the wheels fall off. The car I paid off last year had over $100K miles on it. We'll probably keep it at least another 100K miles, if not more. My husband doesn't drive so far anymore, and that helps.

But there is no reason to get another vehicle. I can't believe you couldn't fit three kids in an SUV. I've seen families with more than that in an SUV.

Anyway, just put your foot down. This is her vehicle for life.

[Big Time]

had over $100K miles on it.

Over a hundred thousand dollar miles on it?

[Magdalen77]

Why can't you keep a car until it's payed off in full?

Even before kids and marriage, she wasn't able to pay one off in full, so that's a bit strange. How did she have two negative equities? I mean, what kinds of cars was she driving that she wasn't paying them off before she had to get a new one?

I'm 31 years old, on my third car, but I've always paid them off in full before buying a new one. My last car was around $24k, I paid it off in July 2005, and I just replaced it in September 2007. I have 5 years of payments to make on this one. I drive a lot, so I figure at the end of the loan, it will have over 100k miles on it. I would probably drive it for another year or two before buying a new one, or trade it in for something new.

I'm just trying to figure out how someone could have two negative equities carrying over. Only reasons I can come up with are: totaling a car with bad insurance coverage so you're left negative and with no choice but to buy a replacement, buying cars you can't afford and having payments going more towards insurance than principle, just getting tired of the car and trading it in at a huge loss.

I've never heard of anything like this.

I'm not getting it either. I've been driving 32 years and sad to say in those years I've had at least ten cars. Only two of them I financed and the last one was the biggest mistake in my life. I'm currently driving a '91 Chrysler that I bought 3 years ago for $1153 including tax. It now has 184K miles.

Right now I'm focused on getting a house, I'm going to drive this car until it's a pile of rust. There's no way I'm gonna let the idea of having a nice shiny new car (and it's nice shiny high cost insurance) stop me.

[Ravenous Wolf]

How did she have two negative equities? I mean, what kinds of cars was she driving that she wasn't paying them off before she had to get a new one?

It's called irresponsibility...

However, I have known a lot (I mean quite a few) of people who have done the exact same thing... After a few years of payments, they want another car and the car lot is more than happy to roll over the negative equity into the new car note...

And then the cycle gets vicious because what was bad in the first place becomes worse with a BIGGER negative equity when the time comes to buy another car that you don't need... At that point, you can still be paying the note for five years and still have negative equity...

I have personally known people who have burned through their twenties and thirties and still have never owned a car outright but just ended up with a huge negative equity... They would have been better off leasing a car... At least the payments would have been a heck of a lot lower...

[stefdr]

I'm buying actually one of the few new cars I've ever owned, I wouldn't even have it if it weren't for a screwed up co sign deal that the dealer totally screwed up. I make double or triple payments each month, which doesn't particularly make the finance company happy. Each payment is tied to a particular month so righ now I actually don't have a payment due until I think September. Anything I pay over one payment goes to principal, so each payment knocks down the intrerest a little more.

My other vehicle is a 1973 Chevy C10 Pickup with over half a million miles on it. Engine rebuilt a couple of times. Out of all the cars new this year, how many will be on the road 35 years from now?

[willingtocope]

There was a study done back in the 90's by the AAA (I think) that showed that the acutal "cost of ownership" for a car in two car family did not vary much between families with one new car with no equity and monthly payments and one old beater. The new car cost more in payments, but, if you avoided taking it back to the dealer for service, cost significantly less to run. In the end, the COO of each car was about the same.

The study factored in things like lost work time taking it for repairs or being stranded in the middle of traffic when the drive shaft falls out or a fan belt breaks...and the subsequent cost of towing.

The study also pointed out that most "scheduled" maintainence was determined based on out dated service liife variables. For example, changing oil every 3000 miles was completely bogus. Suppose a stationary gasoline engine calls for having their oil changed every 1000 hours. If that engine were travelling instead at an average speed of 35 miles an hour, that puts it at 35.000 miles before an oil change is required.

The study concluded that leasing two cars...one a "family" car, the other a "work" car...and ignoring the recommended scheduled maintaince had a generally overall lower cost of ownership than the "keep it till the wheels fall off" scenario. The study determined that given the super highway nature of the american family, americans were always going to have a car payment...the only difference is in whether its on a loan (or lease) for a new unmaintained car, or on an older paid off beater with high maintainance cost.

Of course, if you don't drive it...a paid off car costs you nothing. If you do your own repairs, it costs you less. So...

Your mileage may vary....

[Magdalen77]

I think that my old car is and had been significantly cheaper than a new car over the past three years. I've probably spent around $3000 in total maintenance and repair costs and that includes things that even new cars need like brakes and tires. I've found through years of owning old cars that preventative maintenance and having AAA and a cell phone really cuts down on or ameliorates the whole unexpected breakdown scenario. I realize a lot of people don't want to think that much abot their cars so I guess it's a trade-off. Either you spend time thinking about and dealing with what needs to be done to keep an older car on the road or you pay the higher insurance rates and car payments of a new car.

Of course this all might be just my extreme dislike of ahving to make car payments and having to pay beaucoup car insutance.

[Ravenous Wolf]

The study concluded that leasing two cars...one a "family" car, the other a "work" car...and ignoring the recommended scheduled maintaince had a generally overall lower cost of ownership than the "keep it till the wheels fall off" scenario.

There probably are a lot of factors that are hard to take into account. Some scheduled maintenance is bogus (like oil change every 3k miles) but other stuff is just routine and necessary. The real problem is always getting ripped off by mechanics. Simple stuff ends up costing hundreds, if not thousands of dollars. There are a lot of people I know who are willing to bend over and get the big chorizo with a new car note and more negative equity just for the sole reason that they are tired of getting the runaround from mechanics.

And it also depends on the car itself. Some makes and models can do exceedingly well with routine maintenance while there are others that are a money pit because it sucks big green donkey [EXPLETIVE DELETED]. And often times it is difficult to tell how a car is going work out past 100k and 200k miles until you actually do it. Some do great and others don't.

Now I also know people who screw themselves because they are fixated on fixing a car even when the wheels do come off and they are willing to spending more money than what the car is actually worth. And then there are some things that may not be worth fixing but I know people who still fix it anyways.

Certain cars can last a very long time with routine maintenance with minimal cost and then there are others that are worthless.

But the real issue is trading in a car with negative equity way BEFORE it is necessary and then getting stuck in that vicious cycle of a never ending car payment which turns into bigger payments because of the carrying cost of the previous note.

[Magdalen77]

I try mot to get so into the idea of keeping a car that I keep it past it's time. The limit for me is usually 1500-2000/year and also depending on what's breaking down. Some things you just expect to break down at ocer 150K miles. Like the timing belt or the CV joints. Though I don't have a timing belt on this car (thank God). Sometimes you just need to know when to give up, like my one girlfriend who had to have her water pump replaced three times.

[merkurfan]

As a mechanic, it might suprise you that I have a 04 with 60K on it, and a 06 with 30K on it in my drive way. I have owned several cars in excess of 100K a few over 200K 2 with 400K and one I personally put 500K on after the original owner put 90K on it. (that car was a Merkur Scoripo. Not known to be a reliable car)..

So why the newer low miles cars? well for one, after fixing everyone elses cars all day, mine are the last ones I want to work on.

Two, I watched what I personally was spending on the older cars per year and the cost of insurance. For us the 2 old high mile cars cost us 150 a month to insure. Now, the two newer cars with their 8 air bags, ABS, traction control and what not cost us 195 dollars with our renters policy. To keep both on the road some months I was spending 250-300 in parts! (to be fair, I was diriving a VW Rabbit diesel with 300K on it, it was tired.. really tired)

To boot we have kids, and it gets darn hot and darn cold here. Neither do I want the wife and kids out in waiting for AAA or someone to rescue them.

We will drive both of these cars until paid off or god forbid totalled. I know my Bu will go at least 200K with out troubles. The Mazda should go that far as well.

I rolled 4K of neg in to the bu, that was indeed a mistake! But it was a rock and a hard place deal. Try to get a pregnant wife, a 2 year old and me in a regular cab pickup.

[Magdalen77]

I'm with you Merkur and maybe if I had kids I'd be singing a different tune. But, it's just me and the man. I'm 48, he's 52, so no more kids ever!! If he or I break down, well, we're both grown a@@, people we can handle it. Actually we both have been lucky in that respect, usually the breakdowns have happened when we were still comfortably at home or one or the other of us could come & get.

The man has 6 grandkids (4 who live nearby), so I am considering, once we get the house and see how the bills are falling for a while, getting a late model used mini-van. I still won't buy new, I really hate that first year drop in value.

[Magdalen77]

Oh and my old car only costs $587/year to insure (an incredibly low price in the Philly 'burbs). I have very good insurance too (low deductible and high limits). I'm hoping this year the insurance goes down a little more.

[willingtocope]

Well, here's my economics. My 2005 Chrysler Town & Country costs me $369 per month for the payment (nothing down), $39.06 per month for insurance, and gas. I've had it since May 2006. I've done NO maintainence. Period.

In the time I've had it, we put about 24,000 miles on it.

[gypsie]

irresponsible, stupid or whatever...it's easy to fall into what seems like a never ending car payment.

DH for years wanted an Audi A4. In 2005 he purchased a used 2002 Audi A4. His credit is perfect, so he got a good interest rate.

Now, 2008, we still owe 18,000k and it's worth about 11,000k. EVERYTHING about that car is expensive! An oil change is $75. To replace a headlight is $200!! DH is learning to do a few things himself, but we've wasted so much $$$ on that car. It requires premium gas!!

Everyday he talks of trading it, but I'm just determined we are going to pay it off and sell it and stay away from the never ending payment resulting from negative equity- been there done that before.

[Magdalen77]

Well, here's my economics. My 2005 Chrysler Town & Country costs me $369 per month for the payment (nothing down), $39.06 per month for insurance, and gas. I've had it since May 2006. I've done NO maintainence. Period.

In the time I've had it, we put about 24,000 miles on it.

Hmm, my car costs about $60/month in gas, $50 on insurance and, maybe on average, $100 in repairs/maintenance. I'm interested in getting a late model van, but I'll wait on the whole house thing. Then we can start looking at vans. Hopefully by then my credit will be even better, so I'll get an even better rate on a car note.

[merkurfan]

Well, here's my economics. My 2005 Chrysler Town & Country costs me $369 per month for the payment (nothing down), $39.06 per month for insurance, and gas. I've had it since May 2006. I've done NO maintainence. Period.

In the time I've had it, we put about 24,000 miles on it.

Please tell me in that 24,000 miles you have changed the oil at least 3 times..

ya every 3K is a bit much, but you don't want to go more than 6K on a oil change.

[merkurfan]

irresponsible, stupid or whatever...it's easy to fall into what seems like a never ending car payment.

DH for years wanted an Audi A4. In 2005 he purchased a used 2002 Audi A4. His credit is perfect, so he got a good interest rate.

Now, 2008, we still owe 18,000k and it's worth about 11,000k. EVERYTHING about that car is expensive! An oil change is $75. To replace a headlight is $200!! DH is learning to do a few things himself, but we've wasted so much $$$ on that car. It requires premium gas!!

Everyday he talks of trading it, but I'm just determined we are going to pay it off and sell it and stay away from the never ending payment resulting from negative equity- been there done that before.

75 bucks for a oil change??? What is it, a bi-turbo?? The 1.8T and 2.8's do just fine on regular oil. It does not need something special. The headlights are HID's, you just stuck with um. The bulbs cost roughly 120 bucks each. The idiots that own my shop (ya.. I am gonna call them that) put a lifetime warranty on light bulbs and a long list of other things. Find a place that offers that

Unless you drive it hard, put the cheap gas in it. I know it says PREMIUM on the gauge.. I ignored that on my Merkur and still went 590K with it.

[AboveAverage]

Unless you drive it hard, put the cheap gas in it. I know it says PREMIUM on the gauge.. I ignored that on my Merkur and still went 590K with it.

Now this I do know about cars...my friend leases a '07 Audi A4. Reason you need "premium" is because the engine "knocks" if you put anything lower than 93 octane. Audi is one of those few car-makers that makes their engines require high octane fuel. Even when it the knocking occurs though, it's not life-threatening to the car or you.

87 Octane will be fine....especially for an '02.....