Made my bed, and now I must sleep in it.

[YarisOwnersDad]

Folks:

We are here because we have a passion for cars. No one here has a greater passion for cars than I do, especially BRAND NEW cars.

I love to look at new cars, I love the new car smell, I love the thrill of the buying process and working the deal, I love to drive a new car, and I even enjoy washing a new car. I love everything about new cars. I even somewhat enjoy making the payments on new cars, believe it or not. Maybe that's because I feel that each payment that I make brings me that much closer to the next new car?

Here's the problem, though. I have done the "new car thing" WAY too many times in my lifetime, and I am now 60 years old and in debt up to my eyeballs.

I have refinanced my house several times over the years, and a lot of that money has gone toward new car purchases. At my age I should have my home paid for, but I am in debt up to the max on it, as if I had just bought the place. I have only the minimum required equity in my home, about 20%, after paying house payments for 32 years!

Why would a guy who has been so foolish publish something like this for the whole world to see? Well, it just may help to prevent someone else from being so foolish. I guess I wouldn't have listened, myself, though, if someone had told me all of this. People DID try to tell me that I was being foolish and would someday regret it. They were right.

Please do not fall into the trap that I did, which was to look ONLY at my ability to make the monthly payments. You have to look beyond the MONTHLY budget and see where you want to be down the road a few years. I was foolish enough to think that it was OK to trade cars as long as I could meet all of my monthly obligations. My wife would get very upset with me when I talked about trading, and I would say, "But it is ONLY $xxx.xx more per month than we are paying now." She would always remind me that we would just be staying in debt that much longer if I traded, but I would do it anyway. I know now that I should have listened to her.

There was nothing in my monthly budget for savings. They say you should "pay yourself first" when you get your paycheck, and by that they mean that you should put aside a certain amount of money for the future.

How am I supposed to retire in a few years, when I owe so much on my house and have a lot of credit card debt as well? You have heard the story about the grasshopper and the ant? Well, I have been the grasshopper, and I have nothing put away for the winter, and at 60 years of age, winter for me is just around the corner.

I was VERY good at getting the new cars at the lowest possible price. I knew how to do my research and knew how to negotiate. (Lord knows I had enough practice!) The problem was not that I was paying too much for my new cars, it was that I was trading WAY too often and building up way too much negative equity, carrying debt from one car loan over to the next one. At one point, I was signing my name on my third new car loan in 21 months! I had a brand new 99 Grand Cherokee that I kept for 13 months and then traded in on a 2000 Grand Prix that I kept for only 8 months before getting a 2001 Jeep Wrangler. FOOLISH!

OK, go ahead and flame away. I deserve it. But, I hope that just maybe there is one person out there who will read this and benefit by it.

Tom

[YarisOwnersDad]

Yeah, you got that right. People would be surprised if they knew my IQ and my level of education. I'm not bragging, it's just that I am not really the idiot that you would think it would take to get into this kind of shape.

Something like this has a lot more to do with common sense than with IQ and education, I guess. I have shown a lack of common sense in my financial matters because of my obsession with new cars.

Tom

[bigbang]

Thanks for the advice i wanted to trade the yaris for a car with more HP
but thinking of it i will keep the yaris I hope for 15-20 year.

[YarisOwnersDad]

Originally Posted by bigbang

Thanks for the advice i wanted to trade the yaris for a car with more HP
but thinking of it i will keep the yaris I hope for 15-20 year.

Good.

Hey, there are times when trading makes sense, but I went WAY overboard.

Most of my car deals made no sense. I would take the huge hit on depreciation and then go buy another new one, only to take another huge hit on depreciation. I would carry over negative equity into new loans and dig myself deeper and deeper into a hole. I had good credit, so the banks would allow me to borrow more than the cost of the car.

The best way to trade is to save up the money and not trade until you can pay cash. That could mean driving a beater for a few years, but that would beat being in the shape I'm in at my age.

Tomster

[yaris-me]

It's sad that you did it to yourself, but Congress has done that to all of us. So, I guess you're in deeper shit than us. Maybe it's because of people like you that Congress got away with it all these years. I always voted for the one that said "balanced budget." Yes, I feel real sorry for you.

[tomato]

Tom, nobody is going to flame you especially not for giving good advice.

I'm the opposite, never bought a new car, always tried to be thrifty with cars because they are mostly a transportation expense, no matter how much I love them.

I try to save some money every month, in fact a chunk goes directly out of my paycheck into a 401K. You know as well as I do what happened to all the retirement accounts in this country, and then all over the world in the last 16 months (sigh).

So thanks for the advice, but don't beat yourself up because you "brought it on yourself" Many people do *everything* right and then some, and still end up in bankruptcy due to unforeseen and uncontrolable circumstances such as medical bills, loss of a good job in a bad economy, or whatever. And yet, the minute you talk about a better safety net, people call you a commy and tell you go go live in Moscow. It's crazy

Thanks for the message, though. It was time someone said something about that. I see too many young members talking about how much debt they're going to be in to pay for that beloved first new car and it worries me a little bit at times.

Just don't beat yourself over the head because you could have done everything right your entire life and still wonder about retirement. Many, many Americans do. Myself, I'm scared shitless about it to be perfectly honest, because I keep hearing these horror stories around me about people's parents and how they're having a hard time...

[YarisOwnersDad]

Originally Posted by yaris-me

It's sad that you did it to yourself, but Congress has done that to all of us. So, I guess you're in deeper shit than us. Maybe it's because of people like you that Congress got away with it all these years. I always voted for the one that said "balanced budget." Yes, I feel real sorry for you.

Hey, despite my car trading history, my politics probably line right up with yours. I am actually pretty conservative in every aspect other than car trading.

Tom

[RedRide]

Yes, it took courage and a level of maturity to state the problem.

Having said that.........
I have never been a poor man but, have never been rich either.
I learned very early in life that you can't live beyound your means otherwise, you will never be happy.

[YarisOwnersDad]

Originally Posted by RedRide

Yes, it took courage and a level of maturity to state the problem.

Having said that.........
I have never been a poor man but, have never been rich either.
I learned very early in life that you can't live beyound your means otherwise, you will never be happy.

My biggest problem was not thinking ahead, not seeing the "big picture."

I have NEVER missed a single monthly payment on anything, cars or otherwise. The Lord has blessed me with steady jobs and with good health over the years, and I have always met my monthly obligations. I am still current on all of my bills.

I just didn't think about the fact that at some point in my life I would want to retire and would have to be able to live on a lower income.

The "future" gets here awfully fast, my friends, and we need to be prepared for it.

I would not advise anyone to sacrifice everything for the future, because we have to have a little fun along the way. We have to strike a balance, but I went too far in the direction of having fun today at the expense of future financial soundness.

Tom

[kustom play]

buying new is a waste

buying slightly used is by far the way to go

but having a savings account is important as well

never to late to realize mistakes and try to fix them!

[YarisOwnersDad]

Originally Posted by kustom play

buying new is a waste

buying slightly used is by far the way to go

but having a savings account is important as well

never to late to realize mistakes and try to fix them!

Yeah, it would have been smart for someone to follow along behind me and buy my trade-ins, because I am a nut about car care. I wasn't keeping them long enough to hurt them, and I kept them spotless inside and out. They were just like new when I traded them in.

Tom

[H3LlIoN]

Dude. Seriously. Go in to the self help seminar business regarding debt management. I know a guy who is 25 and on his 14th new truck. Needless to say, his monthly payment ON A PICKUP TRUCK is higher than my mortgage payment. You can coach people and make a ton of money for more new shit.


Seriously though...there is a TON of money in self help...

[SilverBack]

Thanks for the heads-up, YarisOwnersDad. I've been trying to avoid the same path myself. As a matter of fact I just paid off and closed a credit card a few months ago and I'm almost done with the remaining one. That total debt at one time was enough to buy 2 Yarii, and yet I don't even remember what I hell I bought lol. As soon as this card's paid I wanna re-fi my car, which then would be only debt. But knowing me I'll run up another card buying mods. There goes that house I wanted

[Kal-El]

Thanks for the helpful post Tom.

At least now you are seeing the problem with your one real indulgence.

Are you going to have the strength to stick with your Yaris for many years while focusing on debt? It seems like purchasing a Yaris was your first great step to fix your finances as it has the lowest cost of ownership of any car out there.

Out of curiosity, what is your monthly payment/term on your Yaris since we assume negative equity from your previous car was added in.

[nemelek]

Good judgment comes from experience and experience comes from bad judgment. It takes a lot of courage to write what you did. Hopefully your experience will benefit others. In 1988 I bought a new 88 Toyota 4X4. Had it paid for in 91. Swore that I would never finance a car again and I didn’t. Started saving and investing the old car payment for the future. However the miles were adding up on the truck so I had always bought a second used car for commuter miles. Ended up keeping the truck for 16 years while driving into the ground 8 used cars.

Got some inheritance in 2000. While other siblings were buying houses and cars I invested in the stock market. Got lucky and doubled the money before I started buying new cars. Got lucky again in early 2008 when we took money out of the market to buy a 2008 CRV and a 2008 Yaris. I didn’t believe in buying new cars, however I was willing to pay the money because I plan on keeping the cars for the next 15 years. Later the year the market crashed and I would have lost ½ of that money anyways.

My experience is when I pay cash for everything, I tend to get the bare bones packages. $1,600 wasn’t worth the power package. $xxx.xx per month might have been. In order to save money I only traded in 2 cars, the rest I sold myself. I also think how many hours of my life the purchase will cost me at my job. I have to work 650 hours to pay for the Yaris. That is pre tax money so more than likely the cost was 900 hours of my life.

The financial goal I set in place in 1991, to live on yesterdays money instead of tomorrows money, is a nice place to be. Buying and selling new cars often is costly. My step daughter refinanced her house to pay off car and other loans. Within 6 months traded a car in for a new one. I was told to mind my own business when I told her she is now paying on a car she no longer owns for the next 30 years. Her financial planning is for me and her mom to die soon.

[YarisOwnersDad]

Originally Posted by Kal-El

Thanks for the helpful post Tom.

At least now you are seeing the problem with your one real indulgence.

Are you going to have the strength to stick with your Yaris for many years while focusing on debt? It seems like purchasing a Yaris was your first great step to fix your finances as it has the lowest cost of ownership of any car out there.

Out of curiosity, what is your monthly payment/term on your Yaris since we assume negative equity from your previous car was added in.

I had a period of being fairly reasonable for a few years, and I actually paid off a 2004 Impala that I bought brand new in December of 2003.

I was driving a 1989 S-10 pickup with over 200K miles on it when I decided to buy a 2008 Cobalt in June of 2008, and I had the financing set up with a three month deferment on the first payment, so that I would only have three months where I had to make a Cobalt payment and an Impala payment.

I traded in the old beater pickup and bought the Cobalt, which had all kinds of incentives on it at the time. I kept the Cobalt only 10 months and traded on April 13, 2009, for my Yaris.

I took the no interest for 60 months option instead of the $1000 cash rebate, and my payments are $316.77. There was no cash down payment, so the Yaris will end up costing me $19,000.62, which covers the tax and license and the debt carried over from the Cobalt. See what trading in with upside down equity will do for ya? Is a Yaris sedan, nice car that it is, really worth $19,000? I don't think so!

Tom

[Kal-El]

Originally Posted by YarisOwnersDad

...
I took the no interest for 60 months option instead of the $1000 cash rebate, and my payments are $316.77. There was no cash down payment, so the Yaris will end up costing me $19,000.62, which covers the tax and license and the debt carried over from the Cobalt. See what trading in with upside down equity will do for ya? Is a Yaris sedan, nice car that it is, really worth $19,000? I don't think so!

Tom

You might as well pay the $19K especially since it's interest free and then keep the Yaris beyond that. So do you plan on taking it on the long haul?

One other thing I forgot to ask was why you didn't lease vehicles? That's usually the way to go if you want a new car every two years or so. I noticed most of the previous cars you owned were American and had horrendous resale value. I can only imagine the hit you took.

[DandiDani]

i had a 2006 mitsubishi lancer for like 6months then traded it in for a new yaris and the negative carried over ended up = a $20,000 yaris. but...with the money i am saving in gas,insurance, and the fact that i was not happy with the car ...i think it was worth it. i plan on driving this car until it falls apart,lol. now i have a $334 car payment every month but if i subtract my gas/insurance savings from the lancer its not as bad...credit cards are...we got 6-7,000 on credit cards right now and it seems it will take me forever to pay it off.thanx for posting this...i really do need to look into saving for the future