Okay folks, here’s the situation: My mom is retired and on a fixed income. We went over her finances recently so she could get a new car, and figured she should be able to afford a new Hyundai Elantra, and could afford $280 for a monthly loan. We then went out and got her a new Elantra for what worked out to $282 p/m on a 6 yr loan. Two wks later she said, “Oops. I made a mistake and overcalculated my income. There’s no way I can afford $282 p/m.”
The car is now 2wks old and 95 miles young. Taking it back to the dealer is a tough pill to swall b/c it means suffering the consequences of having “driven it off the lot” and decreased the value.
Any suggestions on how she can get out of this?
If this was my mother or mother-in-law, I would convey a family meeting and decide what she COULD afford per month and then have the family chip in the rest to make up the $282.
Looking back, a single senior does not need a NEW car and not one that size (Elantra qualifies as an intermediate). A smaller Hyundai Accent would have been large enough.
My mother in law has a 1994 Pontac Sunbird with only 45,000 miles on it. That works out to 3000 miles per year of driving. A clean 3 year old used car with low mileage is the best buy for a senior.
Lesson learned. My thinking was that a new car would allow her to escape the inevitable cost of mechanical repairs that come along with a car when they reach that 40-45k range, e.g., new brakes, muffler, etc.
We had a family meeting already. No one can really chip in much - and no one wants to commit to doing so for the next 6 yrs.
What about selling it on craig’s list or some other auto classified. Think anyone would pay at or near the loan amt?
That depends on the downpayment she made. With luck, she will break even. My mother-in law first leased her Sunbird, and then bought out the lease when it was up.
Repairs will come eventually with any car. Most seniors I know spend more money at the bingo parlor over a one year period than on car maintenance. The insurance on a 3 year old used car is also considerably les than on a new car.
I’d be surprised if you could get your loan amount back selling this on Craigslist, unless you got a great deal (did you?) or a big % was paid as a down payment.
As a desparation move, you could see if the dealer would work out anything with a trade for a cheaper car. Doubtful, but would be worth a try.
Another option - any chance of refinancing it at a credit union at a lower interest rate?
One more - any chance of converting it to a lease?
Doesn’t Hyundai have that promotion where if you lose your job, you can take it back?
You might not be able to qualify, but it’s something to look into.
You refer to “we” when going out and getting this car so does this mean you’re on the hook for it or your mother? One of you is will likely take a financial hit on this.
How much of a hit depends on what kind of final price was worked out on the car. Dwelling too much on a monthly payment figure causes one to lose sight of the big picture; which includes interest rates, MSRP, rebate game playing, and whatnot.
Stressing monthly payments is all part of the sales game because dealers know that the vast majority of car buyers are concerned with that number more than any of the others.
Talk to the dealer and explain the situation. Don’t discount the possibility without trying. You may be correct but ask anyhow.
How much is she short? Can’t you all cough up 10 bucks a month each for your mother?
72 payments of $282.00 $20,000 for a Hyundai…There will be pain…
And the pain may be made even worse if this new Hyundai is not a 2010 model, but is instead a new '09 model that has been consuming space on the lot all year long.
You have to (you don’t really) tell us her age and sources of income (don’t). Your mom has retired at a young age and won’t be collecting a Social Security retirement for a while yet. Your family members are still too young to contribute or can’t get spousal approval; or something completely different but financially equal. I just wrote that to prove that I never know what’s going on. All is not lost. You might find a buyer who will pay enough for the car or the dealer might be reasonable because he won’t be selling it at a highly depreciated price. I don’t expect spouses to approve any contributions but it will surely put a damper on Thanksgiving, Christmas and Mothers’ Day. Please, in-laws; approve the contributions and your treasure in Heaven will increase. Or not.
The only thing to do at this point is go back to the dealership and say you want out of the deal. It will cost your mother in law an arm and a leg in depreciation and fees, but at least she will be able to pay those fees and that loss off and then start from scratch again.
First, I am not surprised this happened. When you factor the cost of a car payment into your finances, you need to include some wiggle room. Even if she hadn’t made a mistake in calculating her finances, it was a bad idea to take her to the limit of her income to make a payment on a new car. Any budget should have some wiggle room for unexpected expenses. If she can only afford a $280/month car payment, but nothing additional, she can’t really afford a $280/month car payment. At best, she should have looked for a $180/month car payment. If you two had done that by getting something used, she would be able to keep the car now.