Ok, so I may need to get rid of my 2002 Lancer OZ soon because 1) I can't find a job and not sure I will find one in time for payments to start (I just got a degree in IT, and the job market is ), and 2) at $400 a month, I could pay half that on something more affordable to meet my needs (and finances) right now. So, I need your advice.

I took advantage of 's 0-0-0 sales event this past July. My car payments will be starting this coming August. I bought the car because 1) I wasn't able to get approved for a lesser loan due to ID theft issues, and 2) the car I was driving was being taken back by my family - I had no choice, and 3) because I figured I would have a career by the time the payments rolled around. Well now it's June and August is only 2 months away. At my current minimum wage job, a $400 car payment would be financial suicide - half my pay a month. So, I'm looking for alternatives - such as trading in.

I have made no payments on the car thus far. I know when/if I trade it in I will get taken up the hoohaa since I have no equity in the car. What I need to know from you guys is this (and if you have car financing experience and/or have done with with your Lancer, please pipe in):

Say I was looking at getting an $8000 used car and trading in my Lancer on it...

1) How would the financing deal work?
2) Is this a good idea?
3) Do I have any other options? (considering my current and forecasted finances with no true career job - repo'ing is not an option)
4) What would you do in my situation?

I really, really appreciate your advice. I'm going to be in a tight position and I need all the accurate information I can get before I make a move. Thank you.

 

how many miles etc are needed 2nd your car sadly isnt worth much more then prob 12 at best ....id start looking for a job and or just live as best you can on the half months check left .....cuse you will get screwed for the prob $4-8k u need for equaling out the value/what u owe i would keep it till your even as 2 get the most you can out of the car....

 

Thanks for your response...

I know the car has depreciated badly - yet another good reason to let it go before it gets worse.

I'm actively looking for a job, don't get me wrong. I do, however, need to plan for the possiblity that a higher paying job does not come along. With two months remaining, this is a very realistic possibility. Entry-level IT/Computer jobs are incredibly hard to find right now for new grads. It's just the state of the economy.

The reason I would *have* to trade in is because my minimum wage pay will not suffice given that large car payment, student loans, sharing rent, utilities, food, etc. It just won't work. I need to find a viable solution.

I know I will take a huge hit if I trade in - without a doubt. But if that means getting a cheaper car and $200/month payments, I'm all for it. I'll deal with the financing headaches since I really have no other choice. Buying time is the name of the game right now.

Please keep all your advice/suggestions coming in. Answering those questions I posed would be extremely valuable as well, if you can. Thanks a lot.

 

well the problem is, you have made no payments. Depending on how many miles are on the car and what condition it is in, it may be worth anywhere from $7,500 to $9,000.

For example, I bought my 2002 OZ for $17,746.55 and took "advantage" of the 0-0-0 event. My car now has 34,500 miles on it and is worth roughly $8,000. I have made 5 payments putting roughly $1,100 twards the princaple of the car making me owe something along the lines of $16,855.00 If I were to trade in my OZ I would be left holding the remainding $8,855 in hand. If I was buying another car, this would "roll-over" to the new one. IE: buy a $10,000 used car, the $8,855 would be added in, leaving you to finance a $10K used car for $18K bringing the payments to $400 a month. Not good.

I hate to say, but you are going to be screwed any way you go, whether you buy a new used car, or you try to sell your OZ. You may be able to privatly sell your OZ for $10-12K take out a small loan at a bank to pay off the rest, then make lower monthly payments on the remanding balance. I say, take any work you can and make the payments, and never take the 0-0-0 offer ever again.

 

Tough place to be.
I think your best option is to keep the car, and work 2 jobs or whatever you need to do to make those payments. If you tried to buy a $8k car, you'd then be financing 8 + 17 minus the value of the oz which seems to be around 9 , so you'd be financing $16k ($400/month ish) and driving around in a $8k car. doesnt make much sense.

Unfortunatly financing stuff often appears to be the best option as the payments look nice and easy when your earning. But as soon as you 1. lose your job 2. have any sort of financial crisis (death in the family etc) the **** hits the fan. My father once told me "if you cant pay cash, you cant afford it" I think he was right.

I guess the other option is to declare bankrupt, and hand back the car. Not sure about US law, but over here if you did that you would not be able to become a director of a company, and would have issues getting loans in the future. but perhaps this is a lesson that needs to be learnt.

 

or you could just put an ad in the paper saying you looking for someone to take over the payment and just get out of it completly you can tranfere the loan you just have to call the mitsu loan number and you can get your buy out info and the papers to transfere a loan

 

that would be in the best case....not too many people wanna pick up a loan on a used car, for full car cost. You might also have to compensate and drive around a beater for a while till you land a solid job.

 

No one's going to take over the payments unless they're really stupid. Let's pretend he paid off all the tax, title, destination and other charges they add on to the price of the car. That leaves it at ~16,000 dollar balance. That means someone would be paying up to 16,000 for an at best 12,500 dollar car (blue book is somewhere in there as I'm currently looking to refinance). I made payments on my car during the 0-0-0 time and still would take a hit still. I think it's best to try to refinance, wait a couple years, and then try to sell when you won't take that big of a hit.

I personally am refinancing just to lower my interest rate. I'm planning on having the car for atleast 5 years. I only took the 0-0-0 because my old car died and I needed a car RIGHT AWAY. It worked out well for me as I was planning on getting a new car this year after saving up for a downpayment. Instead I got the car and made payments as a "downpayment." Oh and I am in the same boat as you in the way. I graduated last May (02) with a degree in CIS (bought the car in early March '02). I have been working in the field for two years but am now looking for a better position. Not easy to find at all right now, especially if you're not willing to relocate, which I am.

Good luck.