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Need help deciding direction after a lemon law buyback

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leostars
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Need help deciding direction after a lemon law buyback  Reply with quote  

So ford bought back our 14 ford F-150 under the lemon law. We are getting back 11,800 + another 2,500 after the gap and extended warranty is canceled.

I have two main option the first is the route I want to go the second is my husband's

We have some dept I want to payoff. Credit card for 12,000. Hospital bill 1,300, one more auto loan of 20,000. We have no savings. My husband has been missing work often do to an old neck injury.

My plan is to put 2,000 into savings for emergency money. Buy a used truck for around 6,000 (I only drive 18 miles a day to work and back + weekend run around). Drop the remaining 3,800 on the credit card. We are able to send 1,000 a month to the credit card. I want to get the credit card, hospital and if possible a good chunk of the other auto loan paid off. Maybe 1 to 1.5 years. Then go buy the 50,000 truck he wants.

His plan goes like this.
Take 2,000 of the 11,800 and put it in savings drop the rest onto the credit card to pay it down leaving a balance of 2,200. Then go buy the 50,000 truck he wants. The buyback truck payment was 480 a month. The new payment would be in the 700 range.

We have excellent credit with the exception of the high balance and dept/income ration. My concern is taking on another 200+ monthly payment higher then we were already at. The min. on the credit card is 360.00 right now. So they will balance themselves out for the most part. But I will still have the hospital bill and the balance on the credit card to also be trying to pay off.

My concern is putting us in a worse financial situation with his back injury. I think it would be better to get everything paid off first then get the truck he wants. He thinks buying an older vehicle is just throwing the money away and it will be a money pit. Even though we only plan to keep the vehicle for 1.5 years, and I don't drive a lot of miles to begin with.

My husband also was insistent that I would never win the lemon law case and there was no way they were going to pay us back a fraction of what we had already spent. Total of all my loan payments was just over 11,000 and we are getting more then 11,000 back so he ate his words on that one. He wanted to trade it in for the 50,000 truck and have a 2,000 roll over. I wouldn't budge. He is also the I want person in the household. If it will get me from point a to point b I don't care what it looks like. He cares.

So do I continue to put my foot down or concede to his wishes? He is driving me CRAZY
Post Sat Feb 11, 2017 3:53 am
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oldguy
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quote:
then get the truck he wants. He thinks buying an older vehicle is just throwing the money away and it will be a money pit.


Yeah, that's the classic response from someone who is trying to rationalize a new car.LOL Others are "I need a dependable vehicle to get to work".

Congratulations on winning your case, good job!

Late Model Vehicles are the major "Keep Up With The Joneses" item for young families - and the reason for many bk's among the young. When you buy a $50,000 vehicle and pay about $55,000 over 5 years, you end up with a paid-for $10,000 truck. Ie, the depreciation is $45k over 5 years, $9000 per year.

If you want to see an example, drive thru a Marine Base & check the parking lot, the guys don't have house, families, so they blow the whole paycheck on cars. You'll see Big Dually Four Door Diesels with 4WD. With $10,000 wort of wheels/tires. LOL, millions of dollars sitting idle in those parking lots.

And that's why most millionaires drive older cars - they hate depreciation and they could care less what the Joneses think.

Most modern vehicles provide over 200,000 miles of troublefree life (we recently traded our car at 205,000 miles). You can clean reliable trucks that have 100,000 miles.

Tip: Never ever get extended warranty - that is a very high profit item for the seller, NOT the buyer - and it covers very few things. And self-insure the "gap".

IMO, you are on the right track - get a nice used truck with up 100,000 miles on it for under $10k.
Post Sat Feb 11, 2017 4:45 pm
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GardenCat
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Hi
Oldguy gives good advice. A $50K truck becomes a $40K truck the minute you drive it off the car lot, maybe even less, and you will probably still owe more than what it is worth in that moment! The only time that type of truck is worth it is if it actually will be used to generate good income, imho!
so...
You are getting about $14,000 from Ford taking the truck back.
1. Check with a tax accountant to find out if this will count as "income". It very well could be, and in that case you will need to set aside some $ to pay the taxes - whatever income/tax rate you are in. If you are in the 15% category you will owe $2,100 at tax time next year, just on this income. Plan for this.
2. You have over $13,000 in unsecured debt plus your $20,000 car loan.
3. Husband misses work because of neck/back injuries...
4. You need to plan on how to not run up your credit card debt. The best use of any credit card is to use it only for what you can pay for when the bill comes. NOT carrying any debt means you pay no interest.

You probably shouldn't worry about the current car loan, unless it is high interest, over 6-7%. Just make the payments on time. It is not worth the money to pay off a depreciating "asset" that is in reality a liability.
To me, it makes better sense to save more money and get the hospital bill paid, maybe even set up payments on that bill for no interest. If husband has back issues, you never know when some kind of recurrence can happen...
Without knowing more general info, ages, jobs, home ownership, kids, etc. not sure best way to put aside savings. If you have any retirement funds (IRA, 401K) you could put some of the new money into one of those. Bank savings pay almost nothing these days, while long-term investing can reward you with 8-10% annual returns (in the long term...)
Best advice is not getting a brand new truck. Good luck.
Post Sat Feb 11, 2017 11:35 pm
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AngelaEspinosa
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Post Tue Mar 21, 2017 5:40 am
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