Dealing with a high-interest car payment

Re: Dealing with a high-interest car payment

• jessica490 member

  

  January 2014

  H and I just went through the same thing. His payments were $490/month but the interest was really low. This past month we were able to trade it in a get a leased car for now. We only lost $1500 for the trade in but it was well worth it as we are now saving $210 a month.

  I'm not sure if your FI would be willing to trade it in, but you may want to look into that.

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• Xstatic3333 member

  

  January 2014

  Do you know what the difference is between the KBB value and what you owe?  All I can think of right now is to snowball the heck out of it.  Sorry you're dealing with that.  

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• hoffse member

  

  January 2014

  Well I think the best thing to do would be to trade it in.  If he's not willing to do that, then I think you should really look hard at what this might mean for your relationship.

  
  

  In general, I prefer not to combine finances until after marriage.  H and I had dated for 8 years and were engaged for 18 months.  I still didn't put him on my accounts until the wedding had happened.  I did not cover his expenses until after we were married.  I think it's fine to treat a significant other like a roommate if you guys are living together - and by that I mean splitting things like rent and grocery costs down the middle - but I would not cover the lion's share of his expenses.  I also wouldn't let this car affect your credit. 

  
  

  The real problem here isn't the car, so much as his unwillingness to acknowledge that this is a financial issue.  Married couples will likely face a whole score of financial issues together, and it's important to share at least similar philosophies on how to address them.  Things like children, houses, medical bills, etc. cost waaaaay more than a car.  So does your typical wedding for that matter (unless you elope - which I highly recommend, by the way).

  
  

  I would sit your FI down and have a very candid conversation about this.  Make him understand that you're not just talking about the car - you're talking about fundamental differences in how you approach spending vs. saving.  And not to be a Debbie Downer, but I wouldn't set a date for the wedding until you have gotten this one resolved.  In the grand scheme of things, a car is pretty cheap compared to other things you're likely to encounter in the future.

  

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• hoffse member

  

  January 2014

  One other thing - Smart Couples Finish Rich by David Bach is often recommended on these boards to help couples work through fundamental differences in spending vs. saving.  I'm not saying that people who share differences of opinion can't have a successful marriage - but those folks might need to work a little harder to understand where their partner is coming from and be more willing to accommodate a difference of opinion.  That can be a challenge.   Many people think the Bach book is a very good tool to get you starting in bridging that gap.  There's a quiz and everything to help you both evaluate where you fall on the spend vs. save scale.

  

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• cmiles89 member

  

  January 2014

  @Hoffse Thank you so much for the book suggestion, I'll have to check that one out. We don't have mixed finances- seperate bank accounts, only mixed money is in a joint account for groceries and stuff. I basically let him take care of his stuff, and I take care of mine. If he spends all his money to start with after getting paid, that's on him and I don't get involved. The problem is that it still affects me, because I end up paying for stuff for both of us that we both should be in on.

  I also appreciate the honesty- I think I've needed some honest words, because money has always been a stresser for me, and I don't think it HAS to be if I could just talk about it instead of tamping it down.

  I'm soooo frustrated because I told him this would happen, but he didn't listen. And here we are, right where I said we'd be...

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• Sisugal member

  

  January 2014

  Smart Couples Finish Rich by David Bach and Total Money Makeover by Dave Ramsey - read them both - together and TALK>
  
  Is he willing to take on a second PT job to pay for his half of shared household expenses?
  
  

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• cmiles89 member

  

  January 2014

  @Sisugal He actually started his own contracting business late last year. It's very touch and go but I have full faith in him getting it off the ground once spring rolls around. He already works way too much, I don't think I could ask him to do more on that front.

  I will definately check out those books, I think those could be really helpful.

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• duckie1905 member

  

  January 2014

  My husband had a car with a low interest rate but a crazy high monthly payment when we started talking about moving in together.  He purchased it right before we met and he still had 2 years on a 3 year loan and the payment was more than $500 a month.  When he lived at home this was fine but once we talked about moving in together it became clear it was going to be an issue.  He would need help with combined expenses.
  
  We sat down and decided that if we wanted to move in the loan had to be refinanced or he had to get rid of the car.  He decided to get rid of the car.  He went to a dealer and got a pretty good deal on a showroom floor car, got good value on his trade, and only ended up losing about $1000 in the end.  And, his payments were almost $300 less a month which was well worth it a few months in.
  
  If he had been unwilling to do anything about it, that might have been the end of the relationship.
  

  
  

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• Sisugal member

  

  January 2014

  Congratulations on being able to talk about money together and come to an agreement on this situation.  That bodes well for your future together.
  

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