Posted on 03/23/2024 6:49:10 PM PDT by nickcarraway
With a $650 payment for 72 months, this is going to be one expensive Toyota Camry
Your twenties are the perfect time to screw up and try to get your xxxx figured out. Sometimes it takes getting to the rock bottom before you can dig yourself out of it. For the sake of everyone involved here, I hope this young woman on Caleb Hammer’s Financial Audit show has reached her bottom and will find a way to get her life turned around. Right now, it seems like the best first step would be to sell her car and find her way into something less expensive. At 23-years-old, there’s no reason to owe $31,000 on a Toyota Camry. Especially when you can’t afford it.
This young woman’s financial situation is a real mess, and she’s going through some rough stuff with a pending divorce from an abusive military man. Her short-lived marriage stuck her living with her parents, driving a car she can’t afford, and working part time. Unfortunately, this downward spiral came with a bunch of self-destructive coping mechanisms, including hundreds of dollars of in-app purchases, lots of fast food, vaping, and over-drafting her bank account.
It seems like she’ll be headed back to college, so she will definitely need some good solid reliable wheels. Living in Texas means public transit isn’t really an option, but spending 30 percent of your income on a car payment isn’t really an option either. This 2021 Camry came with a 72-month note at nearly 12 percent interest.
At the end of the day (er, month?) the payment runs her $646.33, despite only working 33 hours a week at $15 an hour. She has to work more than 43 hours at her retail job just to afford the car payment. No wonder she’s drawing too much on her accounts and racking up credit card debt!
To make matters worse, it doesn’t seem like she and her former paramour spent much money on the car’s down payment, as she still owes $30,656 (the equivalent of 2,044 hours at her current job) on the note.
Saving up for a couple of months, or borrowing from her parents, and buying a cheap-but-reliable beater would give her a lot of opportunities that this Camry just isn’t delivering. I hope she gets it turned around. This was a rough one to watch.
First car I bought post-1979 divorce was a used Plymouth Duster for $1,000. I bought it from a co-worker. It was white, with blue interior, had three on the column. I don't even remember if it had a radio in it. I bought an 8-track player with speakers for it. Had my mechanic install it all. I don't remember how long I kept it, but I do remember taking my two sons to Disneyworld in it. Sometime during the time I owned it, I took my youngest son to see the Harlem Globetrotters in Syracuse, NY. When we got back to the car, the 8-track player and the speakers were gone.
My 2005 came with a Bose 6-disc CD player. When I traded it in, in 2020, the new car had no player, so I took all the CD's I had, reformatted them to MP3 and put them on a USB stick so I could listen to them in the car. Same thing with my most recent 2022 Nissan Altima lease.
LOL!! It might look that way to you. My youngest son in his early 50's doesn't understand why I am that way. Maybe if he grew up in the 50's, he would.
Thanks for the comment, and I wish you the best too!!
“I lease my new car for 380/month for three years with option to buy at the end of that time when I will be 73.”
Given the complexity of today’s vehicles, good plan.
At 73, give it back to them and find a new one to lease.
I haven’t been there or driven it, but I know it’s a display unit.
[Kool though....]
I grew up in the 50's. We lived in Rochester, NY, and never had a car until I bought my first one, long after I had left home. My second oldest sister was the first one to buy a car in the family. She always liked Chevy's. The last car she had in her life was a Toyota, which she leased, and she didn't get to drive it for long, because she was diagnosed with lung cancer. I was the one who had to return the car to the dealer after she had passed. My only brother, a Vietnam veteran, bought his first car, once he was discharged from the Army in 1968. It was a red Chevy Camaro. And he drove Chevy's until he passed too.
But you must impress the girls with that hauler? Gas mileage might be tough though.
When I was a 20 year old sailor, I purchased my first car, a 1976 MG Midget for $3200. It cost me $1200 a year to insure.
I made $5500 a year. But I did have my housing paid for!
She chose poorly. Should have bought an older used car. My sympathy meter is still on zero especially after reading all the other dumb stuff she did.
My first car was a ‘53 Dodge with a rust hole in the floor big enough to drop a baseball through. It cost at the time, 1960, $350.
She could get a used Honda CRV. They go forever. My 2006 has never had a major repair.
Instacart, Uber, Lyft etc really use up your car and you don’t make enough to cover the wear and tear on your vehicle. It really is awful for people who spend the money they make, forget to pay taxes on it, forget to maintain the vehicle, and forget to sock away the money for the next car downpayment .
These companies prey on people who don’t understand any of that.
I was taught many moons
ago that one should ever
spend more than 25% of
their income on a house
payment (much less a
car).
Would you please elaborate?
New vehicles don’t always sell right away. Sometimes they sit, but they can’t sell a 2022 vehicle in 2024 as if it’s a new vehicle. Who would buy it as a new vehicle?
When you want to buy a new vehicle, you’re not going to buy a new vehicles that’s two years old without a bit of a discount. The dealer can either sell it or not.
So, they might take a few thousand off to move it.
I needed a repair for an old Ford truck and my mechanic said that his shop does not now accept any car not a 2000 year model or newer. Can’t find quality parts. Most OEM secondary manufacturers went out of business because of the covid shutdown. Most pre-2000 models only have cheap Chinese knockoffs that will probably fail within 6 months. Most of the original oem parts stock has now been used up. YMMV. It’s going to get tough to keep the pre 2000’s going.
How do you get into it? A ladder?
But all of that would require intelligence and discipline. My guess is she has neither.
Based on the other characteristics of her life revealed in the piece, her credit score is very low. She pays a large risk premium to the lender because her risk of defaulting on the loan is high.
The only question is - how much cross-subsidization is there between responsible, realistic borrowers with low risk of default and certain groups who are precisely the opposite. The attitude of this article is to suggest that this is some type of random punishment that was imposed on this person, rather than the logical consequence of bad choice and bad behaviors.
How is she going back to college? She obviously failed 4th grade math.
The time for young adults to prepare for financial life as an adult starts before they become teenagers. We must NEVER again give any government funded student loans to anyone who hasn’t at least W2’ed 25% of what they are borrowing. And same goes for
... banks and others who make loans rto such irresponsible getting fed bailouts ..
I agree with you.
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