Hello everyone,
My mother-in-law (62) recently put herself in a situation that has our entire family extremely worried, and we’re looking for honest advice on what options she may realistically have.
She’s single, owns a home in Massachusetts, and is getting closer to retirement age. Financially, she was doing okay before this happened — about 8 years left on her mortgage, around $5,000 total in credit card debt, and she fully owned a 2017 Infiniti QX50 with about 90k miles.
Last week, we found out she financed a 2025 Infiniti QX50 for roughly $42,000. At first, she only mentioned the payment being around $845/month, which already sounded high. Once we looked over the actual lending agreement we were in shock.
The loan is 75 months at 13.77% APR for about $845/month and came out roughly $65,000 total sale price.
She’s now massively upside down on a vehicle that likely won’t hold anywhere near that value, especially over the life of the loan.
What makes this especially concerning is that she’s only a few years away from retirement and doesn’t have a large retirement fund to fall back on. We genuinely fear this purchase could seriously damage her long-term financial stability.
We understand she signed the paperwork and ultimately made the decision herself. We’re just trying to help her minimize the damage before this gets even worse.
EDIT: purchase agreement
Family Member Owes $65K on a $42K Car at 13.7% APR Right Before Retirement — What Are Her Options?
byu/CreditChance6867 inpersonalfinance
Posted by CreditChance6867
20 Comments
How does she owe 65k if the car was only 42k? Where did the other 23K go?
Edit: Ohhh is your math the 845 x 75 months? If so that isn’t really a relevant number.
She only owes 42K on the car. If she decides to keep it, She can shop around and hopefully refinance that into something more reasonable if she has good credit and income.
She could also just sell the car and probably only be out a few thousand dollars. Might be worth taking it to CarMax to see.
What makes you think she is near retirement? Retirement is a financial status, not an age.
If she truly IS close to retirement then just pay the fucking thing off in cash, if she doesn’t have $42k+ cash then she’s not near retirement. There is no other option here.
If this is the decisions she makes she will work until she dies, guaranteed fact
She needs to sell the car now and eat the loss on it. Then she needs to get a vehicle that she can pay for outright, too bad she got rid of her old Infiniti.
Some states have a period of time where you can back out of a contract, usually it’s a matter of days. Is she still within this period?
She doesn’t *owe* $65,000. That’s the cost including interest if she makes minimum payments for the duration of the loan.
Her total financed is in the ballpark of $52k. It could be paid off for something closer to this amount rather than $65k.
She doesn’t owe $65k. That is what she will pay over the life of the loan. They need to pay it off asap or refinance to a lower rate, but probably won’t qualify for a much better rate. If they make extra payments the interest paid in total goes down.
Can she sell the home and downsize?
[https://www.calculator.net/amortization-calculator.html](https://www.calculator.net/amortization-calculator.html)
The $65k is how much she would pay if she made all the payments on time. The car is worth maybe $44k, and though she’d lose a few thousand dollars, she could simply sell it and pay off the loan early.
Her loan isn’t 65k that’s what she’ll pay by the end of the loan. She may be slightly underwater but she needs to dump that money pit asap even if it costs a few grand to get out of. Then she needs to go buy a cheap corolla.
the monthly payment is not the problem. the total contract is.
i’d check cancellation options today, then get payoff + real resale quotes. if she can’t unwind it, refinancing the APR is worth exploring, but the big lesson is no more “payment shopping” before retirement.
Does she have money to pay off the debts? Not all at once, but just in terms of monthly cash flow.
You cant make her do anything but your spouse can talk with her about making a budget and handling it. 1 dollar of carried credit card debt is a problem. Its a common problem.
If she pays off the credit card and the car quickly then she isnt going to owe tens of thousands in interest.
Go buy another car.
Give this one back to the bank.
MIL needs to throw everything she has at that debt. Her loan term is not 75 months, it’s ASAP
I’ve got 70k in my emergency fund and my only debt is 30k on my mortgage. And I just paid 2k cash for a 2007 Lincoln town car. And that’s after selling my previous vehicle for $2600.
In other words I live far below my means and that’s how I like it. When one lives above their means then retirement isn’t in the conversation.
She doesn’t owe $65k, she owes $42k. What you “owe” is the current balance of the loan, not the total you’ll pay over the course of paying the loan.
It sounds like most of your family doesn’t understand how loans work.
That said, that’s an insanely high interest rate for a car loan. Pay extra or look to refinance. Potentially even using some of the equity in the house to take out a loan with a much lower interest rate. I don’t normally think people should barrow against their home to buy a vehicle, but I’m this case the vehicle is already bought. And getting out from under that 13.7% interest rate is priority.
Car sales guy- so what do you want your payment to be?
Unfortunately she is not near retirement.
Anyhow, just pay off of refinance the car.
Walk into a credit union and ask for a new loan for her and get a lower APR.
She doesn’t owe $65k. If she’s about to retire she should have $42k to pay it off today. No reason to wait 75 months to pay it off. If she doesn’t have $42k, she’s not ready to retire.
She owes 5k in credit card debt. She will be 70 when the house is paid off. She has little retirement saved. What part of this is financially ok before getting the car?
She only owes $65K if she pays the minimum for 75 months. If she aggressively pays down the loan over the next 12 months she’d *only* end up paying around $45K ($3,000 in interest). If that’s not possible, paying it off over 24 months would double the total interest to $6,000, so $48K would be what she’d ultimately pay.
If she can pay it off in two years I don’t think it’s that bad of a situation. If that’s not possible, and she’d need the full 75 months, then I would sell the car now and roll any negative equity into a much cheaper vehicle. I’d rather have a $20K used car with $6000 of negative equity than a $42K car I can’t pay off.
Gap insurance, crash helmet, country road, tree, and a deer that may or may not have actually existed. Maybe a mouth guard for good measure. Keep your speed under 35 mph.