Fix it or walk away?

My boyfriend’s 2003 Volkswagon Jetta is close to death. It needs a new transmission, among other things (total cost: $5000). The Blue Book price is a bit over $3000, and he owes $8700 on his car loan. And, he doesn’t really need a car - we’re getting along fine with one. In this situation, what would you do?

That’s quite a predicament you’re in.

  1. You owe money on the car so you can’t sell it unless you pay off the loan
  2. You have a hefty repair bill that you would have to take on unless you were simply selling it for scrap. The car isn’t worth $3000 unless the transmission is repaired.

If you sell it for scrap, you might get $500, meaning you’d have to come up with about $8200 to give to the bank. If you’re credit is good, you might be able to get an unsecured personal loan at about 8% from a credit union. Over 36 months, that means you’ll have to pay them $257 per month… that’s the cost of getting rid of the car now.

Another option would be to repair it, at the cost of $5000, but now you’re $13,700 down on a car worth $3000. If you sell it at that point, you’d have to come up with $10,700. That’s worse than the first option, but you would have a car at that price(which you said you don’t need).

The other option is just to keep it, and keep paying on it, but don’t repair it. Call your insurance company, let them know the car isn’t in driving condition, and see if you can get just comprehensive coverage to protect what $$$ you have in the car. You might save a chunk on insurance that way. Once the loan is paid off, you’ll have the car, but it still won’t be fixed.

The best option really isn’t easy to find. It probably depends on how much you have left on the loan and what its terms are. If you fix the car, you’re dropping $5000 to get an increased value of $2500… so if the interest costs of the personal loan are at least $2500 higher than the interest costs of the existing loan + the interest costs on any loan/credit card you use to pay the repair bill, then you’re likely better off fixing it.

My gut says that unless you have the cash to pay the repair bill, which is unlikely if you’re that far underwater, you’re best off getting a personal loan to pay off the car loan, and simply get rid of the car.

Now if you can get a better repair price for this car, then maybe its worth fixing.

I see a collision in the near future

Find another transmission shop to give you a better price quote, or join a VW forum, and see if your bf can get help from forum members in fixing up his car, for cheap. Its time your bf learn how to turn a wrench if he’s going to own a VW.

Salvage yard would be a better source for a lower cost transmission.
People wreck their Jetta’s and Golf’s all the time.
Another one with low miles should be easy to locate.


Could be worse – he could have bought a $1M home in Vegas in 2007 that’s now worth $200,000. It’s called being under water. I’d first talk to the auto loan company and see if he could negotiate a settlement. Never finance a car for a term longer than the warranty.

I’d probably contact a local community college that has an sutomotive technology program and ask them if they’d install a boneyard tranny in during one of their lab progarms…assuming I find the tranny. If they were willing, I’d seek out a boneyard replacement and go for it. Community colleges often do this type of thing, and this would give the students an opportunity to learn a big job on a car that can be left with them. Their lab time is limited, so you’d probably have to leave the car for a month or so.

That Must Be A Typo. How Can Anybody Owe $8700 On An 8 Year-Old Jetta ? If That Is Correct Then This Was Just A Train Wreck Looking For A Place To Happen.

He owes almost 9 grand, neglected 2 grand worth of maintenance / repairs (other things), and blew up the transmission (3 grand). That’s almost $14,000 worth of 8 year-old Jetta.
He’s apparently now sharing your car ! (“And, he doesn’t really need a car - we’re getting along fine with one.”)

“In this situation, what would you do?”

Here’s the common sense answer:
Look for a new boyfriend, one with better judgment.

On second thought, if you haven’t realized that yet and have to ask us then maybe the two of you would be a perfect match.


Get a second opinion on the transmission.

He owes $8700 on the car. Leave it that way. Junk the car for what ever you can. Live with one car. Pay off and save before you even consider putting anymore money into a car. Do you really have a choice ? By running one, you should be able to pay off the car much fast w/o the insurance, operating and maintenance of two. Use your saved money that way…boy friend should get out of debt.

Give this situation a couple of months and this happy couple will be looking for Judge Judy, not Click and Clack!

Better check the terms of the car loan as to driveability of the vehicle (it is collateral for the loan). It’s much less expensive to keep the finance company happy than it is to try to fix a bad credit rating.

Updated Comment:

Get another boyfriend who is more responsible; the real “trainwreck” is your boyfriend, not the car!