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I just recovered from a major health ordeal, and am disabled. I'm just getting back to work, but being that I've been out so long, so finances are very, very thin.

The problem is that I recently (4 months ago) bought and financed a $7,000 vehicle and the engine is likely going to need to be replaced.I'm trying to work my way back into the good, but I got into a $7000 vehicle 4 months ago, and now the engine is looking likely that it will need replacing. There is no way I can afford to do that, but I still need a car to get to work.

Do I go into a credit nightmare, open a credit account and just buy a beater? I'm assuming I can't get TWO car loans at once, being as my income isn't incredible as I'm just getting back up. Before I had a much higher income, but my disability seriously reduced my earning potential. I owned my previous vehicles, but had to sell my old car to pay off health costs after insurance.

Please, be kind. I couldn't help my health going crazy. You can plan all you want, but sometimes things just happen. I also didn't plan on this car situation just flipping right over in my face. I do take care of my possessions and stay up to date on maintenance and preventative stuff.

Can you suggest options I might have to remedy my situation?

  • Welcome to the PF&M. I'm not sure if I can help you, so here's just an upvote and perhaps someone with experience in car loans can assist. – qdot May 5 '15 at 9:33
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    Did you buy from a dealer or private seller? In what state did you buy the car? (some states have used car "lemon" laws)? – mkennedy May 5 '15 at 11:52
  • I think the location would be a nice addition, someplace have legal warranty that might help you. – Rémi May 5 '15 at 12:15
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    @Gerald Is public transit not an option for you? At least until you get back on your feet financially? – JohnFx May 5 '15 at 12:47
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Without knowing the details of your financial situation, I can only offer general advice. It might be worth having a financial counselor look at your finances and offer some custom advice. You might be able to find someone that will do this for free by asking at your local church.

I would advise you not to try to get another loan, and certainly not to start charging things to a credit card. You are correct when you called it a "nightmare." You are currently struggling with your finances, and getting further into debt will not help. It would only be a very short-term fix and have long-lasting consequences.

What you need to do is look at the income that you have and prioritize your spending. For example, your list of basic needs includes:

  1. Food
  2. Shelter (rent or first mortgage)
  3. Clothing
  4. Utilities
  5. Transportation to your job

If you have other things that you are spending money on, such as medical debt or other old debt that you are trying to pay off, those are not as important as funding your basic needs above.

If there is anything you can do to reduce the cost of the basic needs, do it. For example, finding a cheaper place to live or a place closer to your job might save you money. Perhaps accepting nutrition assistance from a local food bank or the Salvation Army is an option for you.

Now, about your car: Your transportation to your job is very much one of your basic needs, as it will enable you to pay for your other needs. If you can use public transportation until you can get a working car again, or you can find someone that will give you a ride, that will solve this problem. If not, you'll need to get a working car.

You definitely don't want to take out another loan for a car, as you are already having trouble paying the first loan. I'm guessing that it will be less expensive to get the engine repaired than it will be to buy a new car at this point. But that is just a guess. You'll need to find out how much it will cost to fix the car, and see if you can swing it by perhaps eliminating expenses that aren't necessary, even for a short time. For example, if you are paying installments on medical debt, you might have to skip a payment to fix your car. It's not ideal, but if you are short on cash, it is a better option than losing your job or taking out even more debt for your car.

Alternatively, buying another, functional car, if it costs less than fixing your current car, is an option. If you don't have the money to pay your current car loan payments, you'll lose your current car.

Just to be clear, many of these options will mess up your credit score. However, borrowing more, in an attempt to save your credit score, will probably only put off the inevitable, as it will make paying everything off that much harder. If you don't have enough income to pay your debts, you might be better off to just take the credit score ding, get back on your feet, and then work to eliminate the debt once you've got your basic needs covered.

Sorry to hear about your situation. Again, this advice is just general, and might not all apply to your financial details. I recommend talking to the pastor of a local church and see if they have someone that can sit down with you and discuss your options.

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    Great answer Ben. Hopefully he can find some recovery and start rebuilding. – Pete B. May 5 '15 at 14:54
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    The one thing I would add to this is that it is usually better to contact creditors and explain the situation than just miss a payment out of the blue. The last thing you want is this getting sent to collections/ bailiffs; if you notify them they will usually be interested in trying to get at least some of the money back and may well agree a longer, lower monthly cost payment plan. – Vicky May 28 '15 at 18:06

protected by Chris W. Rea Jan 31 '18 at 12:06

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