Reply
New Contributor
thirst305
Posts: 66
Registered: ‎03-03-2013
0

Re: Need advice...Please be nice

I think that one thing to keep in mind is that credit does not solve solvency issues.  It should merely be a tool for liquidity.  At the end of the day, your financial health is a function of money in and money out.  If that number is persistently negative, or barely positive that any unbudgeted events would put you in dire straits, the only solution that will fix your problem is by taking a look at all the money in and money out to figure out if it is sustainable.

 

Unfortunately, we are not like the federal government with unlimited spending power and money printing abilities.  Take a look at your income - can it be increased?  Can you take on a second job to help on the income side.  Is there anything you can cut on the budget side?  How much are you spending on food, going out, alcohol?  How much do you spend on the car now?  Would it potentially make more sense to live moderately under your means, save up for a year or two when you do have extra money, then buy the new vette? Perhaps with more financial flexibility, you will enjoy the car fully.

 

 

Ch7 BK discharged 3/2009
Bloomies (10/99): 4k Alliant (8/10): 4k
SCEFCU Visa (9/12): 6k SCEFCU auto (9/12): 22k
Barclays Apple (10/11): 5k iTunes: 3k SLM: 15k
Amazon (8/12): 15k Walmart store (9/12): 6K
Partners (9/12): 20k CapOnex2 (1/10): 10k Discover IT (3/13): 5k
SDFCU: 20k Amex BCE: 8k
Regular Contributor
Siopao
Posts: 125
Registered: ‎03-09-2013
0

Re: Need advice..Please be nice

I know how the OP feels.  I'm very passionate about cars too except I'm more of an import guy.  But I used to always over extend myself to try to get the dream car I wanted.  Then the BK happened (not all because of having a luxury car) and I had to sell my car.  I just recently started looking at Infiniti's again (actually got approved too), but found then this website popped up and I ended up thinking more about my own credit score and shifted my priorities this way!  It was some sort of awakening.  I figured I would work hard on my credit worthiness, save up, and then get the dream car (within my means) at a very good rate.

 

This website woke me up and saved me from getting stuck with a large car payment and high interest rate.

Starting Score: 660 (BK discharged 2/2012)
Current Score: 684 - EQ | 679 - EX (Lender pull)
Goal Score: 720+

Wallet: NFCU Flagship Signature 14k | NFCU cashRewards 1K | NavCheck 15k | Barclays US Air 2.1k | Merrick 1.4k | Credit One 550 | Cap One 750 | Last app 5.5.2013
Take the myFICO Fitness Challenge
Valued Contributor
thom02099
Posts: 1,350
Registered: ‎08-30-2011
0

Re: Need advice..Please be nice

For the OP,

 

OK, I think we get that you cannot/will not part with the Vette.

 

The only other suggestion, in light of all the other suggestions and one that I didn't see had been made, is to change your living situation to something more affordable.  You stated early on that you don't own a house or have kids.  Presumably then, you're renting something/somewhere.  Try for something less expensive to save money.  Take on a roommate(s) if that's an option.  There's always options to one's financial situation.  Since getting rid of the Vette is not an option for you, then you'll need to look elsewhere to make up the difference.  The Bottom Line is you don't want to go down that BK route again. 

Diners Club Premier MasterCard $50K / AMEX Gold NPSL / AMEX Zync NPSL / AMEX Blue Cash Preferred $14K / Bank of America Cash Rewards Signature Visa $15K / Merrill Lynch Plus Signature Visa $15K / Wells Fargo Propel 365 $15K / Chase Sapphire Preferred Signature Visa $10K / J P Morgan Select Signature Visa $10K / Chase Slate Visa $6K / CITI Diamond Preferred MasterCard $13.2K / Discover IT $10.5K / IberiaBank Select Visa $8K / 1st Command Bank Platinum Visa $7.5K // Home Depot $9.7K / Lowes $10K

EX = 799 EQ = 812 TU = 811 - 11/2014
Valued Contributor
MovingForward_2012
Posts: 3,406
Registered: ‎12-19-2012
0

Re: Need advice...Please be nice

What is your car payment? $1000 per month or is it more than that?

Kinda long, I know but when I was making $78K, it really wasn't that much money. Salaries can play tricks on you especially without considering taxes, medical, dental, and 401K to name a few of the deductions. Hell, I make $96K now and it still isn't really that much money. I leased a $35K Acura in Nov and that is the max I can stomach. I won't pay more than $600 on a car payment given my income. That is way too much for me.

I think my last question to OP is, why didn't you lease the vehicle? That way your negative equity wouldn't have been as much to pay back and at the end of the lease, not only do you get to lease the newest model of the Corvette, but your negative equity will be gone after the lease ends. Another plus is lowered maintenance costs. By the time the brake pads wear out, that will be someone else's responsibility...not yours as you would have swapped out your lease already for another brand new Corvette. There is a hidden secret to people who drive really expensive cars, and that secret is most of them are leased. The payments are lower, maintenance can usually be rolled into the lease so you pay nothing for your scheduled maintenance. My payment if I bought the Acura TL would have been $661 instead of $490...BIG DIFFERENCE. So I rose the lease payment to $536 per month for tinted windows, leather interior stain master treatment, mag chloride protectant, a maintenance plan that covers dings and scratches so I'm not responsible for them.

After the lease, there is usually an option to buy and most luxury car leases are close ended, which means the buyout price is locked in at signing, which protects you from it going up due to inflation. And when you buyout a luxury lease, your financing typically half the MSRP with no negative equity at a great interest rate. The other nice thing about leases is you don't need to put a lot down. I was only required to put $490 down, which was my first lease payment. I put $1000 additional down to get the payment lower.

When I leased in Nov, I traded in a Altima that had $2000 in negative equity...that did not affect my lease payment. Like I said, completion of the lease eliminates the negative equity.

You would have been in such better shape if you leased. You wouldn't have $6500 on credit cards for the downpayment, the payments would have been much lower, you would have been covered by the warranty through the entire lease, and you would have been given the opportunity to lease a brand new Corvette every 3 years and you could enjoy the manufacturer's improvements in later models with the option to finance the buyout once you are set on buying a particular model and your income supports it.

The mileage restrictions are overrated. I got 15,000 a year on my lease, had the car since Nov, only drove 3700 miles so far and it is March and I have driven naturally with no pressure to cut back. With Acura, unused miles are rolled into the next lease and 50% of the miles you go over are forgiven for up to 7500 miles. Luxury leases have a lot more perks than economical leases.

I am just not sure why you didn't consider leasing. Did the sales rep not mention it to you as a option? Leasing allowed me to be able to afford a flashy Acura to show off my hard work (just as you are doing), but there was money left over to buy a $347,900 home to compliment the Acura. All without breaking the budget.

I'm worried about the repair costs you will have when that car falls out of warranty. The repair costs on my Altima were eating up a good chunk of my disposable income once the miles got above 60,000 and at 106,000 miles, I got hit with a $2500 surprise repair bill and I said, enough!!! So now with leasing, I have minimal maintenance to worry about.

If you REALLY want your Corvette without credit damage or ending up paying for it in a Chapter 13 BK, you should consider selling it and then use part of that money to lease a brand new Corvette with a reasonable payment and the rest to pay down your credit cards. Those interest payments on your cards are going to start eating away at your available credit until there is no more and you may have to begin charging food and bills on cards that exceeds what you bring in and that will just lead to a dead end.

I don't know what else to say but first you really need to sit down and do a budget and start cutting things out so the money coming in is greater than the money going out, not equal to. And then go from there. Part of having good credit stems from making on time payments and having a good mix of credit but another part of good credit stems from making good financial decisions so that you can continue to successfully garden your credit.

Realistically, your car payment shouldn't be more than $400-$500 a month on your income. There are a lot of luxury leases out there under $500 a month. Jaguar is running a $499 per month lease special that requires less down than what you put down on the Corvette.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! :smileyhappy: Last App: 4/5/13 Gardening until July 2014
Valued Contributor
bs6054
Posts: 1,673
Registered: ‎11-11-2012
0

Re: Need advice..Please be nice


stealthc63 wrote:

Nope....I went for the all American muscle. Corvette ZR1. Just to clarify I never said I make 90k....I said approx 80k. To be exact I make 77.5k which if you divide into 26 paychecks per year comes out to $2,980.76. After good ol' Uncle Sam does his magic trick I clear roughly 2k per check. Subtract rent, utilities, cc bills, food etc I'm not left with much at the end of every month. I think I'm just gonna ride it out the rest of the year, use my tax return which is usual 4k to pay down my cards then apply for a consolidation loan to pay off the cc's after my bk clears. I just can't part ways with the car at this point in time.


So this means that you usually get a $4K tax refund?  Well, first thing to do (providing you will apply the savings to your debt rather than unneeded expenses!) is to reduce your witholding, so you get this money every two weeks rather than providing an interest free loan to the Federal government.   Unless they arise from special circumstances, or you need the financial discipline of getting a lump sum, tax refunds are things to avoid, a sign of poor financial planning.

Frequent Contributor
kimmiller112
Posts: 472
Registered: ‎04-09-2012
0

Re: Need advice..Please be nice

You are living beyond your means and are digging yourself a big hole that you may not be able to get out of.  Being able to pay your bills and be debt free is worth way more than having a $90k car.   You have already had a bankruptcy, so you know what it is like to go through that and to recover from that.  Why chance it again?  What happens if you lose your job or get sick or you are in an accident and your insurance jumps up?  You are already struggling with paying the minimum requirements each month.  I think your best option is to sell the car while you have positive equity in it, pay off your credit cards and buy a cheaper car.  I just don't think it is a good idea to be planning on waiting a year until you receive your next refund when you never know what can happen in that year.

 

 

 

Barclays USAir World MC $8300 - DCU $7500 - USAA World MC $7000 - PayPal Extras MC (GE) $5500 - Chase Saphire Preferred $5000 - Discover It $6000 - Barclays Sallie May $2700 - Chase Freedom $1000 - Capital One $8500 (business) - store cards ranging from $500-$9500

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+
}