Big Purchase Mistake - In need of serious help!

I'm 17. My 1991 Ford Explorer crapped out on me, and we went shopping
for another car. Somehow, my dad got convinced that getting a new car
was the right idea. His reasoning was that the payments would be about
the same because of the way the financing worked out. I got a 2004
Dodge Neon SXT, with a sunroof and cruise control as options. I am
paying $230/month for it on a (stupid) 72 month period. I am not sure
whether the rate is fixed (probably not).

I'm in big trouble. I can pay for the car, but the insurance people
changed their tune AFTER the car was bought. We got a quote ahead of
time, and it looked like it wouldn't be that bad. Now that I have the
car, everything is going haywire. The insurance is costing around
$250/MONTH. There is no way that I can afford this. $240 for the car
is already steep for me. I'm just a teenager. I'm not like the little
rich kids at school that have everything handed to them. I have enough
to pay for my car, but the insurance is outrageous and it looks like
there is no way out of it.

The loan is in my mom's name, who lives in a different state. I got
insurance with State Farm for the time being, which is pretty high. I
tried talking to Geico and Progressive, but they can't beat the rate
State Farm is giving me (even though I have TONS of discounts).

I think I'm stuck with selling the car. My parents are stupid and I
have to do everything myself. My friend's parents are helping me and
it looks like I am going to have to get rid of it before its value
depreciates any more.

My question is, how much money am I going to lose? How does this
process work? I've put just over 2000 miles on the car. The car is
still in absolute mint condition. Not one scratch anywhere. I haven't
even gotten the oil changed yet (I was told to at 3000 miles).

I am begging for someone's help on this. I HAVE to work this out. I
can't afford this insurance. Please let me know what I am going to
have to do to solve my problem. If I haven't put enough information
here to adequately describe the problem, please e-mail me at
and I'll try to give you a better idea.

Thanks,
Chris Putnam

 

Ouch, hard way to learn a lesson, but a lesson that needs to be learned.
Never buy a car based on the monthly payment, figure out the total cost
first, then the interest rate and monthly payment so you can compare.

Why is your insurance that remarkably high? It's not unusual for males
under 25 to have high rates, (except in Massachusetts, where it's all
drivers with less than 6 years driving record, but I know you're not
there) assuming you have a good driving record. That said, $3000 a year
sounds ridiculous for this car, even for a high priced state like New
Jersey. Do you have a lot of points on your license? Where do you
live? What are your coverages and deductibles? State Farm also has
discounts for students with a B grade average or better, but this may only
apply to college students.

 

As you now know, your father was sadly mistaken. The good thing is that
in the scheme of life, you've learned a very good lesson fairly
inexpensively. I know it seems expensive to you now, but in the context
of buying a house or making retirement investments, this is a fairly
inexpensive lesson.

It does sound like selling the car is your only way out. Unfortunately,
the rate of depreciation is highest at the start and you lose a LOT just
driving off the lot (can be as high as 20% of the value).

You'll have to look at a Blue Book or other valuation service. I'd
guess you will lose in the neighborhood of 20% give or take. Neons
don't hold their value all that well.

Sell the car to your dad for what you currently owe on it. Tell him it
is a great deal due to the financing ... much better than buying a used car!


Matt

 

ROTLSHIBATF!!

You're a cruel man, Matt! 8^)

Bill Putney
(to reply by e-mail, replace the last letter of the alphabet in my
address with "x")

 

Among your other plans for selling the car, include going back to your
dealer and explaining your situation and seeing what they will offer you
to buy it back. A long shot, but the worse that can happen is they say no
or low ball you (they may smell blood). You can always walk out too, but
nothing will be lost by asking.

Who knows - you may have a dealer with a heart. It could happen!

Obviously this should not be your only plan, but, seriously, it should be
one of them.

Bill Putney
(to reply by e-mail, replace the last letter of the alphabet in my address
with "x")

 

Among your other plans for selling the car, include going back to your

It's worth a shot, especially if you buy a cheaper used car from them. You'll
still need a car, and a used one will cost less, and I think the insurance
oughta be cheaper too.
I can emphathize with you: my stepson bought a new car when he was 19 (2 yrs
ago)and is saddled with a big car and insurance payment. Nearly all of his pay
goes to paying this back. His former step dad cosigned the loan, didn't advise
him about comparison shopping, just bought the car right off the lot with no
dickering. You can't expect a teenager with a cool new car in his heart to be
sensible, or to take all factors into account. Tough lesson to learn, but an
important one. Good luck

******************************
Got wood?
Check out my exotic hardwood pennywhistles at fair
prices...http://www.Busmanwhistles.com

 

bend over, grab your ankles....... and forget the vaseline

I hope you grow brains soon.... a 17 yr old with a new car..... is gonna pay
out the wazoo for insurance

only way to lower your insurance without selling the car is to get
married.... but thats another crazy mistake at your age




---
*************************************
CHECK YOUR MAIL FROM ME, if this is HERE, AVG certifies it safe.....
NEVER open ATTACHMENTS on e-mail that is not certified.
Checked by AVG anti-virus system (http://www.grisoft.com).
Version: 6.0.577 / Virus Database: 366 - Release Date: 2/3/04

 

I bet your mom is sorry now. Frankly, she's on the hook for this more
than you, since you're a minor. Why don't you let your mom and dad duke
this one out? They're both sharing the responsibility here - your dad
for stupidly encouraging you to make the purchase, your mom for stupidly
signing the loan papers. Both of them should've known better than you.

Seriously, your mom might be willing to have you drive the car to her
home and just switch vehicles. She can take over the car and the
payments, and you can drive whatever she's got now, or she can trade it
in for a rolling wreck you can afford. She'd probably prefer that to
wrecking her credit rating. And she'd be even more of a fool to let you
try to dig yourself out of this mess without her help, since it's her
credit rating on the line.

HellT

 

Well you have a bigger problem than just selling the neon. As I am
sure you are aware any car that you finance will have to have full
coverage insurance. There really isn't much difference in insurance
rates for a 5k car and a 15k car so lets assume you sell the Neon and
loose 3k (this is probably low) then buy another car that the
insurance is 50 month cheaper. It will take you 60 months to break
even.

Here are some suggestions for you..
#1. Sit down with the phone book and call every insurance company in
it. Some agencies specialize in hard to insure people and can get you
a decent rate.

#2 Have your dad or mom add this car to their policy and add you as a
driver. Strangely enough this should cut those payments in half.

As you are now aware you would have been much better off getting a car
that you could pay cash for and going from there. Your Mom and/or Dad
should have been aware of this and should step up to the plate and
help you out since they helpde get you in to this mess.

Best of luck to you

Steve B.

 

I know. I'm so ashamed....


Matt

 

| I'm 17. My 1991 Ford Explorer crapped out on me, and we went shopping
| for another car. Somehow, my dad got convinced that getting a new car
| was the right idea. His reasoning was that the payments would be about
| the same because of the way the financing worked out. I got a 2004
| Dodge Neon SXT, with a sunroof and cruise control as options. I am
| paying $230/month for it on a (stupid) 72 month period. I am not sure
| whether the rate is fixed (probably not).
|
| I'm in big trouble. I can pay for the car, but the insurance people
| changed their tune AFTER the car was bought. We got a quote ahead of
| time, and it looked like it wouldn't be that bad. Now that I have the
| car, everything is going haywire. The insurance is costing around
| $250/MONTH. There is no way that I can afford this. $240 for the car
| is already steep for me. I'm just a teenager. I'm not like the little
| rich kids at school that have everything handed to them. I have enough
| to pay for my car, but the insurance is outrageous and it looks like
| there is no way out of it.
|
| The loan is in my mom's name, who lives in a different state. I got
| insurance with State Farm for the time being, which is pretty high. I
| tried talking to Geico and Progressive, but they can't beat the rate
| State Farm is giving me (even though I have TONS of discounts).
|
| I think I'm stuck with selling the car. My parents are stupid and I
| have to do everything myself. My friend's parents are helping me and
| it looks like I am going to have to get rid of it before its value
| depreciates any more.
|
| My question is, how much money am I going to lose? How does this
| process work? I've put just over 2000 miles on the car. The car is
| still in absolute mint condition. Not one scratch anywhere. I haven't
| even gotten the oil changed yet (I was told to at 3000 miles).
|
| I am begging for someone's help on this. I HAVE to work this out. I
| can't afford this insurance. Please let me know what I am going to
| have to do to solve my problem. If I haven't put enough information
| here to adequately describe the problem, please e-mail me at
| and I'll try to give you a better idea.
|
| Thanks,
| Chris Putnam

You can expect to loose about 30% of the cost you will get for the car vs. what
you paid. Plus add in the licensing, tax and other fees you will loose. Sad
as it is, once a car is titled, it's considered used even with 10 miles on the
clock. :-(

Sometimes the dealer will buy it back at used wholesale price plus 10% to try
to keep you as a future customer. But not all will. Maybe you can get a
friend to buy it from you for more. Good luck...

 

I have never received a ticket, gotten in a wreck, any of that. In
fact, I have good student discount, American Mensa discount, Driver's
Ed course... etc.

 

Yeah, thanks. Why do people like you even bother posting?

 

What about just figuring out a new way of doing insurance? I may have
to sell the car, sure. But what about my insurance options?

I live in Georgia. The current insurance plan is in Georgia, with
State Farm. Here are the coverages (6 Months):

Bodily Injury/Property Damage Liability ($360.23)
Each Person - $50,000 Each Accident - $100,000
Property Damage, each accident - $50,000
Medical Payments ($87.48)
Each Person $5,000
$500 Deductible Comprehensive ($265.02)
$500 Deductible Collision ($538.28)
Emergency Road Service ($1.81)
Car Rental/Travel Expenses ($15.40)
Each Day 80% Each Occurence $500
Uninsured Motor Vehicle ($17.58)
Each Person - $25,000 Each Accident - $50,000
Property Damage, each accident - $25,000

Total: $1,285.80 ($215/month)

Sorry, it was 215/month, not 250. Still too high. That plus my car
payment = $445/month.

What other options do I have?

 

What is your deductible. You could raise it high to decrease the
premium. You would have to see if the loan contract has limits on the
deductible.

 

The fact that you have a clean record and good grades is a benefit. Who is
the primary carrier for the insurance and what is their record like? From
my kid's experience, it is usually cheaper to be carried on a parent's
policy, but if that parent does not have a perfect record, you may not be
getting the best rate.

Some ideas:

Ask the current carrier if they offer other discounts (most usually do for
home insurance policy, garaged vehicle, driving course instruction, employer
longevity, vehicle safety devices, payroll deduction monthly payments, etc.)
You may not be getting everything you are entitled to.

See if the issue is with ownership of the vehicle and if so, put the title
in co-ownership with the primary insured on the policy.

If its feasible, look into what it would cost to be added instead on your
mother's policy.

Look into other carriers both on your own and with your father. I've
experienced a difference of 300% in quotes that I have received over the
years. It pays to shop and I'm not talking about the one-stop web sites
that supposedly compare 100's of carriers. They have never, ever been the
lowest for me personally..

Look at increasing your deductible ($500?) or lowering insurance limits to
minimum required in your local area, but understand the consequences.

My 17-year old son bought an 8 year old 112K miles Saturn S series earlier
this year with his own money. His liability only insurance runs about half
of what the vehicle cost him, but this is about 1/2 of what you pay per
year.

Bob

 

(Chris Putnam) wrote in message

Okay, first things first. You can increase your collision/comprehensive
deductibles from $500 to $1000. You're 'less insured' at those levels and
insurance costs correspondingly less. Make sure the bank's okay with that
(they should be) and find out the difference in the premium. Downside is
that a wreck will cost you more out-of-pocket to fix. You may have to live
with that downside risk.

Second, different State Farm agents will quote different rates for the same
insurance. Your rates are high because the agent you went through put you
into a high risk category. I just went through helping somebody (from
India--new to the country, treated like a new driver) find insurance through
State Farm. One State Farm rate I got was nearly *double* the one we ended
up with, because I knew enough to call around. I suggest you do the same.
I was able to use the good working relationship I have with my own agent (he
knows my voice on the phone) to get him a better deal. Maybe someone you
know can do the same for you.

Somebody made the suggestion that you ask one of your parents to add you to
their policy. That's an excellent idea, and it would probably solve the
whole thing for you. If your dad was willing to help you get into this
mess, he should be willing to help get you out. I'd push really hard for
that and see where it got me--make sure you offer to pay them the additional
cost on their bill. Also follow somebody else's suggestion and check out
all the insurance companies that cater to high-risk drivers (drunks, etc.)
and see what you can find out.

Finally, find out for how long you're going to be subjected to
higher-than-normal rates. Maybe it will only last to your 18th birthday, in
which case, biting the bullet and giving up on some of your discretionary
purchases might get you by. Maybe you need to find a second job, or find
some creative way to earn the extra money. Turning this car in or
defaulting on the loan at this point is going to hurt you financially, and
you need a car, right? So you're better off trying to find some way to make
this work, IMHO. I know it sucks to not have cash for CDs and other
goodies, but at least you're not trying to support a family and finding
yourself in this mess.

Good luck,
--Geoff

 

Thanks everyone for the help so far.

The deductible is $500. An increase to $1000 only brings the premium
down about $11 per month (which is a start, I guess). It seems like I
didn't make myself clear about whose name the policy is in. I AM on my
parents' policy. Since my mom owns the car, it has to be in her name,
doesn't it? We got a new policy with state farm in her name with me as
the primary driver. Is it possible to add myself AND my car (which is
owned by my mom, and I am not old enough to co-own) to my
dad/stepmom's insurance?

 

You do not have a lot of options - being a financed new car, but:

Go to 1000 deductible - save roughly half - or $130.

Go to 1000 deductible, or higher. Save roughly 1/2, or $210

Do without loss of use - save $15.50 - yee-haw!!!

Save roughly $360 a year, or $60 / month

 

Not old enough to co-own?
I owned my own car outright at age 16. Car was in my name. So was the
insurance. Insurance for a year cost almost as much as the car, with
minimum required coverage.
This was in 1968, a 1961 Morris Mini 850, cost of vehicle, a whole
$60. Plus hours of work making a silk purse out of a sow's ear. About
another $60 in parts to get it on the road.