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Question on advice for an issue: I own a 2004 Hyundai Sonata, purchased in 2006 used for $9,500 @ 6%. Last year it died. The cost to repair it is around $3,000. The payoff amount as of today is just over $2,700. I don't have that cash available as my wife and I are in school. We do have access to student loans, but we'd essentially be taking out a loan on a loan so as to just pay it off in the future. Right now we make around $1600/month. Our budget is $1600/month including the car payment. But it would be really nice to have that $166/month car payment for other things and it really stinks paying on a car that I can't drive. Here are the options as I see them: 1. Continue paying on the car. Pros: It is $166/month and it would be about 16 more months to pay it off. This is okay as I have budgeted for it and can handle this. Cons: It's bad since it's money going to something I don't even use and if we got rid of it that increases our net income by about 10%. 2. Use student loans to fix it. Pros:This is good in that I have a car that works. Cons: This is bad in that I'm spending more than the car is worth to fix it, and I still owe on it so I'd continue to make monthly payments. Also, since it'd be a used engine who knows when it would die again. 3. Use student loans to pay it off and then sell the car for parts and forget it ever happened. Pros: This is good in that it gets rid of the car and increases our current meager income by about 10% ($166/month). This is betting on the future in that we will both make substantially more than we do now. Cons:This would be $2,700 in student loans that we wouldn't start paying for another four years. We already have a substantial amount of debt from undergrad student loans. This stinks as it piles on more debt for student loans and adds more interest. Thanks in advance for any advice or tips. an adult beverage fucked around with this message at 21:57 on Jul 29, 2010 |
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Jul 29, 2010 21:53
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Don Lapre posted:Yea, you might be able to shop around and get it repaired for half that or less. Leperflesh posted:How many miles are on that car, and what exactly is wrong with it? Aside from whatever is wrong, is its condition generally good? 82,000 miles (I used to have a 60 mile/day commute). Besides the problems below, the car is in perfect condition aesthetically. I'm not a car guy at all but my father-in-law is. Basically I was driving on the interstate and the car died. After he looked at it it appeared that the oil pump "froze" and ripped the teeth off the timing belt while I was going 80 miles per hour which apparently damaged some valves on the engine and as such I would need a new engine. I took it to a mechanic who agreed. I talked to several recycled parts dealers and the cheapest engine I could get was about $1,100 plus tax. My father-in-law can't do the engine installation and after shopping around I found a mechanic willing to do it for $400 for labor. Is $400 good for labor for an engine replacement? However, the car has now been sitting for a year as we could not afford to fix it at that time. We were in the process of moving and had our money tied up in that. I now have a ~4 mile commute which I cycle to everyday. I enjoy cycling and don't mind not having a car but do mind these dang payments I'm making on something that doesn't work. We have a second car that is a beater that we own outright that is okay for transportation for groceries and whatnot. It has been stored in a cool, dry place but my father-in-law said due to how long it's been sitting it would probably need a bunch of other work at this point- new tires, battery, fluids, timing belt. It also would need a CV joint within a month of the repair as that was already going bad before it went. Another issue: I now live 1,000 miles away from the car. So part of the $3k figure would be me flying down to the car once it is repaired and driving it back home. So after taxes, parts, labor, my time, etc $2.5k-3k is what my father-in-law and mechanic estimated. Does that seem right? Again, I'm not a car guy at all so I appreciate the outside input. Thanks.
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Jul 30, 2010 03:47
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Thanks for all the help so far guys. Yeah my wife and I called Hyundai and the dealer multiple times to bitch them out, since the mechanic and my father-in-law said the same thing about the oil pump. But we found out as some of you guys mentioned the warranty is non-transferable and I bought the car used. The salesman (yeah, I know) told me it was transferable, I was stupid and didn't bother to actually confirm this. Big mistake. I didn't even consider Leperfish's idea of "fix it, then sell it." That makes a lot of sense. I had just assumed in the era of carfax reports that an "engine replacement" might look bad on its history? Does that not matter as much as I think? The engines that the recycled parts dealer sells have anywhere from 30k to 60k miles on them. I'm going to present that idea to my wife that we use a partial amount from student loan to fix the car, sell the car, use the proceeds to pay it off and then whatever is leftover to pay towards that portion of the student loan. Thanks again guys. I'll keep you posted on what we decide.
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Jul 30, 2010 16:44
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The guy who would do the work is a small hole-in-the-wall type place, so perhaps he doesn't report to CarFax?hobbesmaster posted:(I hate salespeople) this.
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Aug 2, 2010 03:30
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