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 snipped-for-privacy@putnamplanet.com and I'll try to give you a better idea.

Thanks, Chris Putnam

Reply to
Chris Putnam
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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.

Reply to
Taylor

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

Reply to
Matthew S. Whiting

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")

Reply to
Bill Putney

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")

Reply to
Bill Putney

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...
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Reply to
BREWERPAUL

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

Reply to
mark hoffman

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

Reply to
Hell Toupee

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.

Reply to
Steve B.

I know. I'm so ashamed.... :-)

Matt

Reply to
Matthew S. Whiting

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...

Reply to
James C. Reeves

This advice will get you in deeper than you already are. This type of antic will follow you everywhere and for many years hence!

Reply to
James C. Reeves

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.

Reply to
Chris Putnam

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

Reply to
Chris Putnam

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?

Reply to
Chris Putnam

Nomen Nescio wrote in news: snipped-for-privacy@dizum.com:

Hmm... yeah, I'll put a REPO on my mom's 100% perfect credit record. I'm sure she'll LOVE that. Are you crazy?

I'm not kidding. My mom is like extremely paranoid about anything insurance related and thinks my dad (her ex-husband) is plotting to put her in jail or something. My dad on the other hand just doesn't know enough about finance and I sure as hell don't.

I have been doing everything myself for maybe 2 years. You'd be surprised.

-C

Reply to
putnam

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.

Reply to
Arthur Begun

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

Reply to
Bob Shuman

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

Reply to
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?

Reply to
Chris Putnam

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