Currently I drive a 2025 Bronco sport big bend. I had very little say in the purchasing of this vehicle as I didn’t have a credit score at the time (the car is in my mom and stepdads name). I knew very little about finance stuff, and even less about car buying, so I more or less didn’t get a good deal.
The loan is financed for $33,827.93 at 11.38% for 84 months. $588.86 mo payments
I currently have $30,327.12 left on the loan.
I make about $37,000 with just primary job.
While I can afford this car right now, my fiancé and I want to rent a place together. For context we are 22 yo living with each others parents. Her income could easily pay for any rent we have in our relatively cheap city, but this car and it payments are making me worry about the future.
I hate the interest rate, and I hate the length of the loan, but my parents tell me that it’s okay and I can easily afford it so why not. I feel like I’m just throwing away money at a last second purchase with zero research done.
For extra context I wanted too (and still want too) buy a full sized Bronco, so I had ask to check out they stock. The dealer walked me over to the sports and talked us into buying it with words of “it’s more affordable” and “you can leave the lot with a car I’ve always wanted”
Anyways, should I just try and trade in the car for something used and cheap and save up for a hefty down payment on something I want on my own credit. Or am I just dumb. Thank you
Should I downgrade my car
byu/EmployOutrageous2659 inpersonalfinance
Posted by EmployOutrageous2659
16 Comments
the problem isn’t just the payment. it’s the income-to-car ratio, the 84 months, and the rate.
i’d only trade down if the numbers actually reduce the damage. otherwise you risk turning one bad loan into two. boring used car > pretending this is fine.
If you can get out of this contract, yes get out.
can you refinance for better rate/term? I know many years ago I refinanced with my credit union for about 4% lower and knocked a few months off the loan with about the same payment.
You’re probably underwater on the loan. It might be very hard to get out of this car.
Na your buried for a bit.
Trading it in, it’s the same deal but a new deal on top- so you’d be in a worse position.
Best bet is refinancing when your credit improves.
People always seem to want to preface their financial issues with cars with words like I can afford the car.
You should be honest with yourself. There’s a difference between making enough money to cover the payments and actually affording the car. Affording the car means comfortably making the payments with no issues to your finances at all. To take it a step further really being able to afford the car means you have enough in liquid cash to wipe out the debt if necessary and not be inconvenienced by it.
If you could afford this car this wouldn’t even be a question. People don’t take out 84 month loans on cars they can afford either. You should downgrade. That car is worth too much compared to your income. Its also not even in your name.
Your parents are bad with money, or at least the money moves they’re putting you in are bad for you. Except the free rent thing. I suggest you get educated about all financial matters so you don’t listen to them anymore. Find reputable sources to understand budgets, credit, taxes, savings, retirement. They is a lot to learn and I’m not calling them bad people it’s just that they can’t teach you something they don’t know themselves.
Don’t move out until you truly understand what you can afford and you’ve saved up many months worth of living expenses.
> but my parents tell me that it’s okay and I can easily afford it so why not.
Your parents sound like they make poor financial decisions. This is one of those poor decisions. No reason for someone making your salary to spend that much on a new car.
If you were the one on the loan there’d at least be a small silver lining with credit building at least and then you could refi. With the interest rate and not being on the loan you’re in a lose-lose situation really.
Sorry OP, but your parents are crazy for forcing you into this loan. You can’t afford a new car, let alone a $40k car with an awful loan.
The cost of that car is so far out your league it’s ridiculous. Any new car is wildly outside of what you can afford on that income.
“I had very little say in purchasing this vehicle” , stop it. Yes you did, you had all the say. No excuse you make will change that fact. You made a poor decision, just own it, learn from it, and don’t make the same poor decision again in the future.
I’m confused about the situation. You say the vehicle is in their name. What exactly is the arrangement here? You make payments on a car you don’t own?
If loan is in your parents names you personally cannot sell the vehicle because you do not own it. Instead, you would return the vehicle to your parents and tell them you no longer intend to make payments. Being a new vehicle it is unlikely that there is any equity in it due to depreciation. You should double check, though, by comparing your outstanding balance to the trade in and blue book value for the exact model/trim you have. If the trade in or blue book are are higher than the balance then ask your parents for the proceeds of the sale (assuming you’ve been making all the payments unassisted)
Bro… holy shit. I make 10x your salary and my car is not that expensive lmao. you fucked up.
Get a beater 70’s or 80’s Bronco and learn to fix it up. You can easily re-sell for more when you’re ready to upgrade some day. That’s what I did when I was in college (with a different car)
Bronco sport = Girl car.
Buy the full size with lift kit .
Do you need a car right now for work? What were you doing before you got it? Maybe you could sell the car and save up to buy something sensible and within your budget. I would at least post the car on marketplace or autotrader to get some offers.
If not, then how about you wait to move out until you’ve paid off the car or a good chunk of it?