Car troubles

So, I have quite the dilema here. I have a '92 Civic, 150k miles on it, and basicaly everything in it went to shit in the past couple months. It’s going to cost an incredible amount of money to fix everything, and i still owe $800 on it. I will be able to pay that off with my tax returns (I’m getting exactly $800) But then i have the problem that it does’nt work. I only make like $500 a month, i just turned 18. The insurance on this car right now is $200 a month. I’m wondering if anyone has any suggestions as to what the hell to do? I wont have the money to fix it for quite some time, i need it to get to and from school and work. I was going to forget about it, get a bank loan, get a newer car, and also pay for a years worth of insurance for that with part of the bank loan (it would be $4000 just for the year of insurance) But i just turned 18, i havent established any credit yet, and they wont give me a loan. I could have had my parents co-sighn, but they have horrible credit, so they can’t. I think basicaly, i’m fucked. :x

I would advise against ever getting a loan. You always pay more than you owe, even if what you owed was more than what you borrowed.

Assuming you are talking about American dollars or dollars with a similar value I’d suggest looking for a different insurance company. The amount you are paying for that is a bit much even with you being 18.

My first premium at 17 was £750 for the year = £65 p/month ($115). Find out what models of car are the cheapest to insure from your company or online. Then look for the cheapest car in that range locally. Then shop around different insurers for the best deal. Shopping around takes ages because you have to give all the insurers the same details.

No better time to learn how to fix stuff. “Doesn’t work” doesn’t mean it’s dead, it means it’s neglected. Every school has its share of gearheads, get to know them and you could probably trade your computer knowhow for their mechanical knowhow.

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One suggestion, next car get a “boring”, without V-tec or go faster stripes, one which will be cheap to insure.

To an insurance company cars like Honda Civic = Boy Racer Car. Combine that with your young age = high premiums.

Not that I am saying you are a boy racer, you could after all be the safest driver around, but sadly insurance companies go with stereotypes.

$200 a month out of $500 a month is a large proportion of your income simply for car insurance!

There is, dare I suggest public transport + Walking? unless of course you work at times where there are no busses running.

My advice:

  1. Take henrymop’s advice and don’t get a loan. I’ve bought cars both ways, and the no-loan approach is vastly superior and more gratifying.

  2. While you’re at it, don’t do the credit card thing. Ever. I did, and I regret it.

  3. Park your car, cancel your insurance until you can get the car fixed, and use the premium funds to work on it yourself (basically Fligh %'s advice).

  4. Get a bike and a raincoat to get to work/class. Or if you’re close enough, get a skateboard with ginormous wheels. Much more fun!

  5. Offer friends gas money and beer to bring you longer distances. Don’t let them drink the beer until after they let you out of the car, of course :wink:

Car insurance is riduculous for young male drivers. My brother recently passed his driving license. And for him to get a resonable car to be insured will cost him about £1500.

Update: So basically, i shopped around for insurance, lowest i could find for my civic is $270 a month :o . And then AT LEAST $800 to fix it up, and then the $800 I still owe. So, theres thatway…$1600 to pay off/fix it, and then $270 a month insurance. OR theres this: I found a 2000 Mitsubishi Eclipse GT in the classifieds, its $7,800, insurance for it is $100 a month. on a 60 month loans, thats $150 a month for the car, and $100 for insurance, $250 total…less than just insurance for my Civic. And on top of that, i have a friend offering me $1000 for the Civic as is, so thats an extra grand for me. Problem is, I’m 18, i have no credit history, thus cannot get a loan. So I’m still fucked. Ridiculous. :x

60 loan? that’s 5yrs… crazy, puts you back in the same situation. buy a granny car with low insurance and pay cash/or as quickly as possible. While your mates are bragging about their cool cars, you will have cash to actually do things, or save for important things like education, housing, investing in a business jumping on a plane and seeing the world whatever, having a debt hangin over you at 18 will limit your choices and place un-needed stress on you, it gives you confidence knowing you have a few grand sitting in the bank just incase you want to do something or a bargain comes up,

Hardly puts me in the same situation. Lets say i did have the money to get a “granny car”, it goes to shit in a few months, i have to pay to fix it…all the time. If i go with the Eclipse, i will have money, the grand from my car, 2 grand from it if i spend the $400 to put a new tranny/engine in it. Then the $1250 left over from paychecks, after i pay the $250 for loan/insurance, then i have a sweet car and money to spend. If only it were possible to get it. But untill i figure out what to do, i guess i dont have a car.

Honda Civic… Mistubishi Eclipse GT…

What is it with young males going for fast powerful car…

IMHO young drivers should be limited to a certain size of car engine.

e.g. new driver just passed his test buys a 2.4L monster, then looses it on a bend while trying to impress his passengers. Cars are not things to be showing off in.

How long have you been driving for? couple of years? My advice is to leave the powerful cars until you get a lot more driving experience under your belt.
(Plus insurace will then be cheaper as you get older!

Lots to be said for getting yourself a “granny” car. OK, so it’s not a Mitsubishi EVO or whatever, but it will be cheap to insure. Small engine will mean nice low running costs with a reasonable miles per gallon. Plus it shouldn’t have had it’s engine ragged from a lead footed driver.

Thing about loans are that you end up paying over the odds by the time the loan finishes. You will end up paying $9000 over the period of the loan. And what if you miss a payment?

Something for you to think about.

You’d probably find the “granny” car will be looked after, won’t have had it’s engine ragged to death, and will be mechanically sound.

Honda Civic, i bought it, my first car because it was from my cousin, and it was a good deal, fairly reliable, good gas milage, only cost me $2600, he payed $3000 for it less than a year earlier, and put lots of money into it. A civic is by no means a fast car by the way, unless its heavily modded, and its not. It has nothing to do with it being a powerfull car, the point is its a great deal, really reliable car, great gas milage, i like the way it looks, only has 57k miles on it, full carfax history that the owner just sent me and i read through. I am not going to spend the money on a “granny car”, because i will not like it. It’s that simple, and in order for it to be a fairly cheap “granny car” it will have to be older, and the fact that its cheap, means it probably has I’ts share of problems already. So ill probably have my grandma help me on getting the loan, it just seems like the most logical way to go to me.

About paying about $9000 for it through the loan, thats true, but its also a $12,000 car, and thats without the extras it has. Seems like a great idea to me.

About paying about $9000 for it through the loan, thats true, but its also a $12,000 car, and thats without the extras it has. Seems like a great idea to me.

ummm… the market sets the price, an item is only worth what the customer is willing to pay

I found a 2000 Mitsubishi Eclipse GT in the classifieds, its $7,800,

if you can buy it for $7,800 and turn around and sell it for $12,000 do so, you just made $4,200… congratulations.

Thank you.

Hardly puts me in the same situation. Lets say i did have the money to get a “granny car”, it goes to shit in a few months, i have to pay to fix it…all the time. If i go with the Eclipse, i will have money, the grand from my car, 2 grand from it if i spend the $400 to put a new tranny/engine in it. Then the $1250 left over from paychecks, after i pay the $250 for loan/insurance, then i have a sweet car and money to spend. If only it were possible to get it. But untill i figure out what to do, i guess i dont have a car.[/quote]

Two words: Dave Ramsey

Seconded. Total Money Makeovere was one of the best books I’ve ever bought.

As far as the car insurance, you’re going to get raped on that until you’re 25. However, if you or your parents are (or were) in the US military, you may qualify for insurance (and bank accounts) with USAA. Also, look into just getting collision insurance instead of full coverage. My 10 year-old car and 8 year-old truck are worth about $900 and $1500 KBB, so it would cost more yearly for full coverage than the vehicles are worth. I dropped from ~$200/month to $70 (including renter’s insurance) just by getting rid of full coverage. If I get hit or hit someone, everything’s taken care of, but they won’t replace my vehicle. Just don’t drive like a jackass, look both ways at a green light, and you should be fine.

Also, see about taking defensive driving courses. $25 usually gets you a good meal, some comedy, and ~10% taken off your insurance every month.

On the other hand, you are willing to pay $8000 How about getting a newer small car, like a small 2dr Fiat / Nissan / Peugot / Ford / (insert brand of small american car)

I’d reckon you could get a pretty new small car for the price you are going to pay for a Mitsubishi Eclipse GT. Newer = more reliable.

At the end of the day it is your choice, but If I were in your shoes I would go for a nice small hatchback, (Nissan micra or something similarly sized), with cheap insurance + cheap to run.

But of course, I’m not what I’d say interested in cars as such, as I seem them only as tools to get from A to B (hence my choice of MPV, whereas most guys my age go for sporty cars)

Bear in mind that assuming a 5% interest rate, your total payments on 9k will be $1587.29, putting the total price at ~ $10.5k. Still shy of your evaluation of $12k, but not a lot.

A couple of things:

  1. If the car is really a $12k car, ask yourself, why isn’t the seller asking $12k? People are not stupid - street values for cars are available online. I would suggest to you that the reason they are asking 9 instead of 12 is that it isn’t actually worth 12 for some reason. READ: BROKEN.

  2. If you can survive without a car (read: BIKE, SKATEBOARD, ETC), you can put $250/month into a savings account. Inside of 4 months you’d have 2 grand (since you already sold your current junker for $1k and you’ve saved $2k), plenty enough to buy a granny mobile cash. Or wait another few months and buy a better granny mobile. Or discover that you don’t really need a car after all, and still have a couple of grand.

A car is not an asset. It is not an investment. It is a convenience. Do not get sucked down the path to debt. It’s easy to avoid, but it’s very difficult to work your way out of it once you’ve started. You end up in a vicious cycle commonly referred to as the rat race. Basically, you’re always trying to find new income simply to pay for shit you don’t even care about any more. Trust me. You do not want a big fat liability hanging over your head. Be patient and pay cash for your conveniences.

[quote=“earlye”]

Bear in mind that assuming a 5% interest rate, your total payments on 9k will be $1587.29, putting the total price at ~ $10.5k. Still shy of your evaluation of $12k, but not a lot.

A couple of things:

  1. If the car is really a $12k car, ask yourself, why isn’t the seller asking $12k? People are not stupid - street values for cars are available online. I would suggest to you that the reason they are asking 9 instead of 12 is that it isn’t actually worth 12 for some reason. READ: BROKEN.

  2. If you can survive without a car (read: BIKE, SKATEBOARD, ETC), you can put $250/month into a savings account. Inside of 4 months you’d have 2 grand (since you already sold your current junker for $1k and you’ve saved $2k), plenty enough to buy a granny mobile cash. Or wait another few months and buy a better granny mobile. Or discover that you don’t really need a car after all, and still have a couple of grand.

A car is not an asset. It is not an investment. It is a convenience. Do not get sucked down the path to debt. It’s easy to avoid, but it’s very difficult to work your way out of it once you’ve started. You end up in a vicious cycle commonly referred to as the rat race. Basically, you’re always trying to find new income simply to pay for shit you don’t even care about any more. Trust me. You do not want a big fat liability hanging over your head. Be patient and pay cash for your conveniences.[/quote]

The actual price of the car is $7900. I know the guy, nothing is wrong with the car, i have a full carfax history report, hes only asking what he still owes on it because he needs to get rid of the payments, hes getting married in a month, he has a kid on the way, and his soon to be wife wants him to get a 4 door automatic so that she can drive it also, and they dont have trouble getting thier kid in and out of the car. It’s actually a 7.59% intrest rate, that equals $9,518.27 to be exact. But thats only if i pay it over the entire 60 monts. I could easily pay it off over 6 if need be, i only use $100 in food and about $60 in gas every month. Round that up to $200 a month, that leaves me with ~$1200 that i could use to overpay. I realize i am asking your guy’s advice here, and thats all you are doing, but so far i havent seen anything that makes me think it’s not a good idea. Thanks for all the info anyway, I would appreciate any more.