stupid mistake!

[investingnoob]

So I made a terrible decision last month. My beater car was having tranny issues and wasn't worth replacing. So I traded it in for a new car. 2011 Subaru impreza 2.5i. So now I have a $16k loan and I'm mad I went into debt when before I just had my house.

On top of that I want to propose to my girl friend by July. I'm going to save up for the $1800 ring she loves but she said if I can't afford it there's a $500 one she liked. She just wants to be engaged.

She has a car loan of $9000 at a 21.99% rate because she has bad credit. Were working on getting her credit back up. We want to be debt free asap.

I just wish I never bought this new car! What can I do?

[dczech09]

I recommend selling the car. I am assuming you could probably sell it for enough to pay off the loan at least? Or is the car worth less than the loan? If possible, sell it then either by a reliable, used, and inexpensive car for less than $8,000. If you can buy the car with cash great; if you have to take a loan, it will be better than having this larger loan.

As for your gf's car; why on earth would she keep that loan? Sell the thing and get something cheaper. 21.99% on a car loan is robbery; I don't care how bad her credit is.

Bottom line is stop buying cars that are over $10,000 unless you have the cash for it. The best thing to do is to sell and get something at lower cost. If you don't, you will be paying these two off for a while.

[KennySoward]

That's a tough one. A new car loses value pretty quick, so if you do sell it you probably be at a loss at first, but at least you won't have the massive payments.

As for her car, that interest rate is indeed robbery, as DCZECH said. She could probably try to sell it as well, or possibly get a bank loan at a cheaper rate. Chances are her bank will give her a better deal than if she financed it at the car "joint." They tend to get kick backs off the high interest rates they charge you.

It wouldn't hurt to go into her bank and ask. If she has a decent history with the bank, you never know.

[maat55]

I would sell the car and replace it with a car 5k or less. The loss of buying the new car is already a reality. Keeping it longer will only exasperate the current situation.

[prosperity1]

If it has only been a month you may be able to get out of the new loan. Sometimes you may be able to take it back in 60 or 30 days. Then get a cheaper car. Also see if you can pay off the 9k loan.

[Eric80]

What you might have to do is accept what has happened and move forward from this- its no the end but it will take time to resolve. Have you considered going to a debt advisor where they are able to give you sound advice as they are experienced on this? They may suggest consolidating your debt or maybe an IVA?

[naomibatac]

Yes, the best you can do is to sell the car and get a cheaper car. Even if you will lose some, at least you can settle your debts. It is truly better for both of you (you and your girlfriend) to be debt free before you get married. Reliable debt counselors can help you decide how to go about settling your debts.

[Shewillbemine]

So great for you two to give advice 7 months after the fact.

[snafu]

How many months left on GF's car loan? your car loan at what interest rate?

Off topic...Are you sure she has the same financial mind set as you? Once engaged will there be be pressure to marry? At that point her debts become joint as do yours. I suggest as incentive you both clear consumer debts before moving your relationship forward.

[mmtprofile]

Dump the car and get a cheaper one.

or

Make more money.

[mmtprofile]

I know my advice is uncomfortable but being controlled by debts just destroys life.

[ecoadapt]

I would sell the car and replace it with a car 5k or less. The loss of buying the new car is already a reality. Keeping it longer will only exasperate the current situation.

This is a good advice! You've already done it,the best thing to do really is to sell it and get a cheaper new car!

[flipyourdebt]

You should focus on getting out of that 21% interest rate. Get a debt consolidation loan or something and get the rate back down to a manageable level.