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Jan 12, 2008 - Ask Dub Schwartz!

Dear Dub,
I need your help... not really your help... more like a little friendly advice. I had bought a nice new car that was nothing special... well it was really a nice color that I liked a lot... but then a year or so later I found my dream car and I just had to have it! So I traded for the Volvo wagon and carried over the first car loan onto the wagon loan. I loved the car but two years down the road the payments are killing me...  not to mention the cost of any repairs!  So I finally decided to give up my dream car...  not actually my dream car, but it was SO cool... and get something a bit more practical. I have my eye on a nice new small hatchback... or is it a wagon? Unfortunately I find that my loan payoff is over $10,000 and the trade in is only $5700. What in the world should I do?
Hank Kimball

Just a wild guess Mr. Kimball, you have about seven credit cards maxed out, right?  You're about to learn a hard lesson, but if you trade for another new car now, that new car is going to cost you about $5000 more than whatever it says on the window sticker.

You owe the money on the loan and that's not going to go away, but you seem to think there's some trick that's going to get you out of it.

Doesn't matter if you get a cheaper car, try to finagle some kind of lease deal to come up with a lower payment, or just keep your car and don't trade. You wanted to dance, you have to pay the piper.

Of course, if you want to add another ball to your juggling act, by all means go right ahead. But to stop, at some point you have to catch the balls or they'll crash to the ground.

Personal responsibility's a pain, ain't it?

Dub

5:21 am | Categories: ask dub schwartz, auto financing, humor, upside-down Comments (0) | Permalink | Alert Administrator

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Aug 25, 2007 - Topsy-Turvy

I'm on the road this weekend, and since it's construction season here in Pennsylvania, I found myself with some time to kill during one of those special times when traffic stops as folks try to figure out how to funnel through the one lane construction zone.

After counting the number of orange-vested shovel leaners and marking it down in the sightings section of my copy of the North American Field Guide to Construction Workers, I turned on the radio and flipped around the dial until a personal finance show caught my ear.

The discussion was about the recent surge in homeowners defaulting on mortgages and the bad decisions they made to get themselves in a mess, and the host mentioned how a lot of folks like this also find themselves upside down with their car financing as well.

How do people do this to themselves? Maybe it's just the way I was raised, but if it's not going to fit in my budget, I don't buy it, no matter how much I might feel like I "have to have it". If it's something I really want, I try radical ideas like cutting back on something else or (brace yourselves) saving up for it until I can afford it.

I suppose we can't protect people from themselves and their own stupidity, but it's time for a wake up call folks. Put down the credit card and the car brochure and back away. Your financial over-indulgence reaches out and affects far more than just you in the end. 

Gotta have it now
Think about that tomorrow
Guess what? The bill's due

3:33 am | Categories: auto financing, upside-down Comments (4) | Permalink | Alert Administrator

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