patgilm

This ^^^^

Is there some way your wife could get out of her lease without a big penalty or maybe she could sell it? Then she could get a cheaper car for the time being and use the savings to help pay for your RX until things get better. You are a team and if you need the RX for your job, hopefully she would be understanding about driving a cheaper car.

bitkahuna

iTrader: (20)

you said you leased the rx july 2014. how long is the lease, 36 months? if so, it seems like you have about 23 months to go. suppose you ideally wanted to end up with payments $200 less, that would equate to a savings of $4600 (23x200). if that's the goal, it doesn't seem like your options really help you in any meaningful way, because as you say your image matters and you can't roll up to a high end photo shoot in a corolla. plus, the rx is handy for photo gear i'm sure if you have tripods, lighting, lenses, batteries, maybe a computer, etc. yeah a sedan trunk CAN work but an suv is a lot easier (i know because i do some photography for clients ).

can you sell some photography gear? it's easy to accumulate way more than we ACTUALLY need. ask me how i know. can you sell anything else?

as a professional photographer, you can of course make more money by simply doing more shooting. if you're good and there's demand, just burn a few more hours and raise more income? might be tiring for a while, but help you get out of the hole. maybe weddings? maybe sell some stock photos online?

is the $11k under water part because you're financing both the depreciation of the rx plus the buyout of the mdx lease?

what was so bad about the mdx that made you have to get out and take such a bath?

ArmyofOne

I agree with everything above. here is my take. Bear in mind I have been in a similar situation before, with similar $$ figures and all worked out in the end...but I had to eat ****.

DO NOT, UNDER ANY CIRCUMSTANCES REFINANCE ANY CAR FOR 84 MONTHS. PERIOD.

That is an ungodly loan term, and should only be for RV's, houses, things of this nature. If you don't have enough equity in your trade or cash on hand to make a down payment big enough to bring a 60 month loan (or even 72 AT MOST) into your reach, then you really cannot afford the car.

Taking out a personal loan to cover the 11k difference? Even with your credit score, you are looking at a 10% interest rate minimum on a no-collateral loan. Thats not good, because an auto-loan interest rate is less than that.

Having said that, here is where I would go. Please keep in mind that mine is real life experience, I have been through this.

Hold what ya got. If you knew you were in trouble with this car, not sure why you just bought your wife a new one, but that is really neither here nor there. If you keep making the payments, assuming your interest rate is low, you will be hammering away at the negative equity faster than the car will depreciate, and in 2-3 years time you will likely be right side up, or close to it.

Once you are right side up, THEN you can look at a refi option, but only at a term that is less than or equal to what you have left on the term of your current loan. For instance, if you still owe 60 payments of $808, then when you refinance, dont take the term out any farther than 60 months.

Meanwhile, throw EVERY SPARE CENT at the car. If you arent saving for retirement yet, start now. Thats not what I mean by spare cents. I mean the starbucks you drink on the way to the office, cut that out. Pack your lunches at home and take a lunch instead of going out (except for business, which should be on a separate account anyway).


If you have to drop the payment lower right this second, call your lease co and ask what the buyout amount is right now. Then call your credit union. Ask for a 72 month loan (since its new) for that amount. at 3% interest or less, your payment could be as low as 550/mo, depending on what you will owe. But man, its a 2015 RX, its got a long way to go before its worthless.

Tharr62

I don't think that was needed. ;-) I get your point, and I would never work somewhere in the public eye. I only stated about working another job, because I know that's one of the first things people think or jump to in a situation like this, and I am saying that I can't really do that because of the type of business I am in. So, no you won't be seeing me serving you anything.

Quick way to get a divorce! LOL. No, seriously.. that's not going to work. Lots of people join banks, and work from one account.. we are not that couple. With my business, everything is separate we share costs of living, and other things.. but our cars we pay on our own. She works hard, and is entailed to drive what she wants. Because I made a ridiculous, selfish choice in no way should impact her, or what she does. "I" did not go out and buy her anything.. she has her own money, and chooses to live within her own budget, something I am learning to do LOL.

So, the lease was a low mile lease (7K a year) as it did not matter, as the plan was to purchase before termination. (so miles did not matter). It was done for (4) years not 36months. We had to roll in a lot of neg. from the MDX. This is why the payments are so high. The purchase price on the RX after the lease, is around $24K (I think). The total price now is around $48K (to buy it now) and KBB has it listed at around $38K in value. The plan was to pay the $808 for 24 months, then.. flip it into a 60/mo loan at a low rate with my good credit, and possibly some more money down (3-4K). So.. a 7 year (total) debt to rid myself of the Acura.. and to get the Lexus. Listen.. in my mind I was not happy with the Acura. I was paying $600+ for that (fully decked out one) and had issues with the frame creaking, and other little "bugs" from the first year model that drove me NUTS and would not qualify for lemon law. (i actually tried). I did not see the point staying with something I hated to drive for that kind of money, so... I said, hell I'll spend a few hundred more a month and get what I want. I did this in an emotional state.. and did not think it trough. Again.. yes, yes, yes I know it was a bad move. I get it. But, whats done is done. To be honest, it's not too bad. I have the car I like now.. and I am paying dearly for it. LOL. It's just frustrating as I can now see how this can impact other things, and prevents me from paying down some other debt that my business has (credit lines for marketing, gear etc..). So.. it's kinda "one more thing" to deal with each month... and whenever I have a "soft month" I get irritated (mainly at myself) for what I did.. and how I feel "stuck", and how I can see that there is never any extra money to pay off other debt, or anything for retirement.

I like the advice I commented on in my previous post.. I think I am just going to stay put for now.. and chip this away best I can. Obviously, if something happens and I can't really afford it.. I will need to do something then.. but, so far a year is down.. and if I can get sat least another year at the $808.. and then do a 60/mo note for the balance, and put some cash down.. I should feel better. THEN, I can put some extra cash vs. my other debt and get that paid down.. then, if all goes well get the Lexus paid off.. and hold on to it for a few years after that (10 years into it now). This should give me a 10 year ownership, where 7 of them I had to pay for all the mistakes.. and then, three of them hopefully with minimal repairs. (I only drive about 8K a year). So.. we will see I guess.

Toys4RJill

To the OP, I am reading this thread and I almost do not believe what I am reading. I hope you take no offence to that.

I can't imagine how your household is able to afford $14K in lease payments. You rolled an existing lease into a new one with no down payment, you have credit card debts, rent or a mortgage and any other loans for school perhaps? How about all the other stuff you need in life? Then you are thinking of getting a part time job?

What I am getting at is: you must have a pretty good household income to afforded these two cars and the above mentioned expenses in life. If that is the cae, then if the income is high enough, how could you not have any savings?


You need to weather the storm and stick to this lease and get it paid off and then finance a proper vehicle to the income you make and thus can afford. The idea that you "have" to maintain an image with a nice car is obviously "not" paying off.


Do you have anything in the bank for a rainy day to pay this off?

EthanV

Everyone made mistake. I would pray God for help to guide you through this time.

Tharr62

Really? If you do some research you will find that most american people are in a situation like mine to some degree. It is not un common, and statistics show that more then half of people that walk into a dealership are underwater with their current car $5K or more. I'm feeling a little like I need to defend my actions.. and thats not what I wanted this to turn into.

Well.. I never said how much we make :-) It's not the point, nor should it be hard for you to imagine. Different households make different amounts of money. Where I live, everyone drives MB, BMW, Ranger Rover, etc.. I'm not exactly living in the isolated mid west working at the local news paper.

Yeah, that's what happened. The only credit card debt I have is from my business (which is normal) it's not like I have used it for "fun" things. It's hard on a forum to get into all the details.. but, if you knew the whole picture (or if I wanted to share that) it would make more sense. I don't have school loans, or anything like that.. I cook every night and don't eat out, and yes the thought of doing some extra work comes to mind when people want extra money.. even if your household brings in significant amount of money as it is. It's all relative to goals and what you want to do I guess.

Well.. it's not that simple, and I don't think that going to savings is the best answer in this case. I never said weather to not I have savings or not. I mentioned retirement which is something I want to start adding too. Sure, I have person savings and plenty of open credit avail for a "rainy day" BUT, this is not a fix for a monthly obligation. It's just to have security if there is a slow month from time to time.

Look the bottom line, is that I don't really want to have to explain the other areas of my life or how owning a business (like mine) works in terms of income. When you go from making $200K a year, or so to say.. $100K or less from year to year you have a false perception on what your actually making, and when you do own a business (like mine) you learn (the hard way) about this stuff. I have made choices based on a good year, and now see the effects when and if things change. Now, that does not mean that in the next 3 months things won't change (they always seem too).. it's just that I have grown that much more about how my business changes as time moves on and have re-evaluated some choices. To be honest.. the Lexus was not even my first choice.. I wanted a ML350 or Range Rover at once point, and I had the income where a $1200/mo payment was just another bill. At this same time I am making $6K or more payments to Amex to operate my business.. so, understand I am (have been) dealing with high volume of income and to some extent the $808 payment (at the time) was nothing to me. In my world I am writing contracts for work a year or more out.. so.. it's easy to see "oh, I have a ton of work for the next year, and I feel great about it.. and there is no reason I won't next year". I have done this for 5 years, and felt secure with my choice at the time. BUT. yes, things have changed a little bit (not to the point where i have no money, but.. enough to where I'm like.. yeah, I should have done things different).

Again..

I get it. I understand the mistake. All I wanted here was to get some thoughts on what to do based on thoughts and experience from others. The person above that mentioned he had 30years experience, I like what he said and am going to stick it out. If I need more income, I will either work harder inside my own business, or perhaps network with my peers for more work.

Thanks so much for all the feed back, I feel better and will be okay.

Please close this thread, unless someone can put a positive spin on it LOL :-)

LexBob2

" I'm not exactly living in the isolated mid west working at the local news paper."


Whoa there! Lol. Hey, we have lights running water, electricity (we just got a TV!) out here in isolation.

You probably should have realized you'd get a wide range of feedback when you laid this out there. Good luck on getting through it all.

Tharr62

LMAO! :-) Yeah! I know.. LOL.. I was just kidding (trying to make a point). I am actually from Vermont and moves to Miami 7 years ago. I grew up in the middle of no where, and had nothing most of my life. So, I def. get it.

Yes. I did.. (roll eyes now). live and learn . LOL. It's okay.. I am trying to not take things personal.. but, when the topic is about your choices, and money it's hard not to get defensive. I am still a human with pride.

Toys4RJill

^ the reason I asked what your financials may be is becuase you get a much better response (advice) from those on the board. It is common for those who are in financial debt becuase of stupid choices to find excuses or flat out lie about things.

Currently you are paying $800/mo for a lease of two cars for 36 months.

If you had any financial experience, you might realize that at the end of your lease, you would have paid $38,000 and you will now have no asset (even though a car is a depreciating asset)

Your retirement savings should not be a priority. You absolute priority should be to use any money you have to get you out of the lease and pay off the part of the lease that you are upside down in.

If you were to sell the car, then pay off the lease (with savings) and then go and get a cheap car, in 36mos you will be ahead of where you are.

But you have to have a Lexus to maintain an image that is irrelevant as it is not helping you in the long run.

tex2670

Look--you know your business better than we do. But I can say that if I hired a professional photographer, and he drove up in a Lexus, my immediate thought would be "I'm paying this guy too much." And I get you want to keep your wife happy driving the car she wants, but I would think your spouse would not want to see you struggle, and would be willing to make a small sacrifice for 2-3 years to dig you out of your hole.

Best of luck.

My0gr81

I agree, you made bad choices, you were clear about that in your original post. No point beating you up on it, it wasn't called for.

Now, you need to make some tough choices, and maybe even get a professional "credit counselor" involved. They have the ability to negotiate with lenders on your behalf and in some states, can even enforce a repayment plan that considers your personal and professional needs. It may mean that you have go give up somethings, but ultimately, you make the choice to proceed with a plan they present to you, or you tell them "no" and deal with it on your own.

Good Luck and I hope everything works out for the best.

bitkahuna

iTrader: (20)

tharr62 - i know you said you and your wife keep your finances separate but seems like a possibility might be to really talk it all out as a couple and MAYBE she might be willing to 'help' your side of the balance sheet to get out of the hole? yeah you'd 'owe' her forever

bagwell

my exact thoughts in RED

they should be hiring you based on your portfolio/website/referrals/experience....not on what vehicle you drive.

Tharr62

My wife is not going to do anything with her car. When she read all of your posts.. she started to laugh.

It was just leased. If she makes ANY move away from it.. it's basically like my same situation all over again. She would have to take a bath on the car she JUST leased??? How is that good advice? Thats out right silly, and I am the one that made a bad move. I also shot my accountant an email.. and he said that was a bad idea.

So.. lets take that off the table.

The *only* thing that would have made sense regarding my wifes car.. is to rid ourselves of the RX.. (take a lone on the neg. amount and "share" the one car until it's paid off.. then, I start over again from zero). This would be the best way for her to help me in this situation, and we understand thats an option. This should have been the suggestion from others that know more about finances. LOL.

I don't think this is a case for someone else like that. I don't have a lot of things that orbit my world. Everything is pretty fixed. We don't have cable, and I don't pay for internet. I don't have "personal credit cards" and I don't have "issues" in general. (my FICO is 750, and my three scores average 755) so I am above most in terms of being responsible, and paying what I say. I pay for three things every month.. AMEX, (business card with a balance) Car, and rent. Food, and gas. Food I cook (pretty good too LOL) and gas is gas. I use regular. I actually have a very simple life style. Basic cable, and internet is included where we live. My cell phone is a basic plan ($60) and the insurance for both my car, and my wife is $196/mo total (S. FL has the highest rates in the USA) and we have perfect driving record. I am 34, and she is 40.

I was reading some articles on the riches people in the world.. and how they live. I was inspired by it, and realized how many little mistakes ALL of us make throughout our lives. It's really interesting. Look, I agree I don't care that much about "driving a Lexus" to be honest, where I live it's EVERY car on the road.. and I don't even feel that impressive driving it LOL.. I look at it as more of the average car that is not a "kids car" (civic as an example). If I wanted to impress MY clients, I would roll up in something with a bit more wow. So, lets keep that subjective point in check.

Yes, you may think that. and thats fine. Your also most likely not my client that is spending $250K on a wedding. It's like.. if you want to work at a fashion magazine, and "fit in" you would need to wear the cloths for the "look". I actually teach workshops on branding, and I could write about this point until everyone is sick of it. LOL. However, this can be a subjective point, and your entailed to your own thoughts about it. I just seem to operate with people that DO look at this stuff, and Miami is a very unique place in that regard. When I roll up to an engagement session when we are spending the entire day with clients, going from place to place, and shooting.. I can't be in a Civic. It's just not something nor I, or even my staff would feel makes any sense. As it is, I feel the Lexus screams soccer mom.. but, I always joke with people that I have a 2yr old son.. and it's the family car for all the gear. So, it's not that I am trying "impress" anyone beyond that of simply fitting in to the demographic of where my clients see as "okay".

I guess I feel there is a difference from "not being able to afford" and "choosing to not afford" things. I use this logic with my clients as well. They see my prices and some of them think I am nuts.. while.. others pay it. Why? Perceived value goes a long way, and once you understand that people make LARGE purchases based more on emotion then logic, suddenly you have control. (this is also why car sales man have jobs LOL). To my own point, I sell to clients too.. and it's all high ticket stuff. It's an emotional sale not one based on logic. I come here, and of course I get all the facts and figures, and logic side of things. yes, thats reality. I know that. :-) But, thats not always what makes people happy, and not always the way people live.

Again, to be clear.. there is nothing wrong with my "driving a lexus" it's the right car for sure. I just should never have left one car to another so soon. That was the mistake. Since that time, I have had to deal with other things that have come up (things I am not going to talk about that are personal) that are making me re-think "choosing to pay" $800 a month for that same mindset I had a year ago. This is a sense has become the cost of "growth" for me, both with life dealing some unpleasant things, and the dynamic of my own business. As much as I made a mistake, it's life and it does not come with a set of instructions. Sometimes the obvious choice is not the one we can live with or even be happy with, so whats that worth? Just to.. do something all over again. This is why I felt it would be cheaper to get a car that I actually was happy with, and KEEP it (which I have done in the past with my BMW for 8 years). Will it "cost me" more monthly to jump ship and do it? Yes. Is it worth it? Logically No! Emotionally yes. If I lie to myself, and say "well, I should be driving a civic" and "try to deal with it.. and it gets the best of me, and brings me down, and I feel embarrass, or end up hating it" this can effect other things.. and then in the end if I dump that, and get something else, I am right back to where I would be, because this is true human nature.

Anyway....

each month that goes by that I pay the $808 is actually good. It's under the lease, there is no APR so.. it comes off the value each payment. The longer I stick with it, the better. (regardless if I sell it, keep it, trade it.. etc..) it's that much less I need to "deal with".. so, for now I will sit tight and keep watch for some good interest rates that I know I will qualify for and put my good credit to work to help as much as possible.