Downgrade your car to become debt-free?
Discussion
--Boring thread alert--
I'm bored of my car.
I'm 23, privately renting and paying bills out of my own wages alone due to my girlfriend being out of work, our baby is due in 13 weeks.
I had a Celica 190. This had to go, as on my modest wages the fuel bills and insurance were shocking. I bought a Focus Diesel, I had to borrow another £500 to buy it after the sale of my Celica.
I have debts which run into about £1700. This is because of some very poor decisions when I was younger, living beyond my means. Since moving out I now appreciate money much more and I'm finding it impossible to have enough left over every month to pay off these debts, minimum payments just have me going around in circles, getting no-where.
The Focus could probably fetch £3,400 if I find the right buyer. The spec sells very quickly.
This would leave me with some free cash and I have a yearning for an old Peugeot 306, which can be picked up for around £800-1000.
Would you do it?
I'm affraid of falling back into the same traps, but this seems like a logical way out of debt. The car will still be adequate for what I need it for and it'd make me happier on the commute, as I really haven't taken to the Ford. In fact I hate it.
What do I do? Keep everyone happy and hold onto the Focus, stay in debt for the next x.number of years and never stand a chance of moving out of rented accommodation?
Or
Do it - sell up quick without losing much money on the Focus and buy a cheaper car. Become debt free, chop the cards up and live within my means whilst building on my savings?
I'm bored of my car.
I'm 23, privately renting and paying bills out of my own wages alone due to my girlfriend being out of work, our baby is due in 13 weeks.
I had a Celica 190. This had to go, as on my modest wages the fuel bills and insurance were shocking. I bought a Focus Diesel, I had to borrow another £500 to buy it after the sale of my Celica.
I have debts which run into about £1700. This is because of some very poor decisions when I was younger, living beyond my means. Since moving out I now appreciate money much more and I'm finding it impossible to have enough left over every month to pay off these debts, minimum payments just have me going around in circles, getting no-where.
The Focus could probably fetch £3,400 if I find the right buyer. The spec sells very quickly.
This would leave me with some free cash and I have a yearning for an old Peugeot 306, which can be picked up for around £800-1000.
Would you do it?
I'm affraid of falling back into the same traps, but this seems like a logical way out of debt. The car will still be adequate for what I need it for and it'd make me happier on the commute, as I really haven't taken to the Ford. In fact I hate it.
What do I do? Keep everyone happy and hold onto the Focus, stay in debt for the next x.number of years and never stand a chance of moving out of rented accommodation?
Or
Do it - sell up quick without losing much money on the Focus and buy a cheaper car. Become debt free, chop the cards up and live within my means whilst building on my savings?
If the debt is worrying you then do it. Pay off the debt, pick up something for a grand and start saving a bit of money. Before you know it you've saved up enough money to buy something decent, or baby stuff swallows it all up.
Having said all that, only you can decide if the debt is manageable. Is you job secure, do you have any other savings or assets?
Edit: I downgraded my car to buy a house. Which when I think about it means i've saddled myself with 30 years of debt, and got a crap car.
Having said all that, only you can decide if the debt is manageable. Is you job secure, do you have any other savings or assets?
Edit: I downgraded my car to buy a house. Which when I think about it means i've saddled myself with 30 years of debt, and got a crap car.
C.A.R. said:
--Boring thread alert--
I'm bored of my car.
I'm 23, privately renting and paying bills out of my own wages alone due to my girlfriend being out of work, our baby is due in 13 weeks.
I had a Celica 190. This had to go, as on my modest wages the fuel bills and insurance were shocking. I bought a Focus Diesel, I had to borrow another £500 to buy it after the sale of my Celica.
I have debts which run into about £1700. This is because of some very poor decisions when I was younger, living beyond my means. Since moving out I now appreciate money much more and I'm finding it impossible to have enough left over every month to pay off these debts, minimum payments just have me going around in circles, getting no-where.
The Focus could probably fetch £3,400 if I find the right buyer. The spec sells very quickly.
This would leave me with some free cash and I have a yearning for an old Peugeot 306, which can be picked up for around £800-1000.
Would you do it?
I'm affraid of falling back into the same traps, but this seems like a logical way out of debt. The car will still be adequate for what I need it for and it'd make me happier on the commute, as I really haven't taken to the Ford. In fact I hate it.
What do I do? Keep everyone happy and hold onto the Focus, stay in debt for the next x.number of years and never stand a chance of moving out of rented accommodation?
Or
Do it - sell up quick without losing much money on the Focus and buy a cheaper car. Become debt free, chop the cards up and live within my means whilst building on my savings?
OK, nice answer, or not so nice???I'm bored of my car.
I'm 23, privately renting and paying bills out of my own wages alone due to my girlfriend being out of work, our baby is due in 13 weeks.
I had a Celica 190. This had to go, as on my modest wages the fuel bills and insurance were shocking. I bought a Focus Diesel, I had to borrow another £500 to buy it after the sale of my Celica.
I have debts which run into about £1700. This is because of some very poor decisions when I was younger, living beyond my means. Since moving out I now appreciate money much more and I'm finding it impossible to have enough left over every month to pay off these debts, minimum payments just have me going around in circles, getting no-where.
The Focus could probably fetch £3,400 if I find the right buyer. The spec sells very quickly.
This would leave me with some free cash and I have a yearning for an old Peugeot 306, which can be picked up for around £800-1000.
Would you do it?
I'm affraid of falling back into the same traps, but this seems like a logical way out of debt. The car will still be adequate for what I need it for and it'd make me happier on the commute, as I really haven't taken to the Ford. In fact I hate it.
What do I do? Keep everyone happy and hold onto the Focus, stay in debt for the next x.number of years and never stand a chance of moving out of rented accommodation?
Or
Do it - sell up quick without losing much money on the Focus and buy a cheaper car. Become debt free, chop the cards up and live within my means whilst building on my savings?
I guess many of us have been where you are now (although pregnant girlfriend aside)...at the end of the day, being young is all about being reckless with money!!! it's too late for you now with the baby on the way, so my advice is this - sell you focus and buy an old volvo 850 for your new family. i'm sure you can find one for about 750 quid. you'll be better off and your family will be safe. you'll be debt free (until something major goes wrong) and you can get on with earning more money. also, if you've got them, ditch any TV contracts (SKY etc) ditch the expensive mobile phone contract and go to PAYG, you'll already be £80 a month better off! if you don't have any of these...good luck!!!
You need to get a better job if you think £1700 is a lot of debt for a car
I had a D-turbo 306, it was great to drive and great on fuel, but wasn't very reliable. I'm sure the 1.6 diesel would be bullet proof though. Are 306's diesels not getting a bit leggy nowadays?
The margins seems too small for a car to make that big a difference to your finances
You have a £3400 reliable car but £1700 in debt = £1700 Equity
Sell the car, clear debt, minus 800 for a leggy 306 = £900 in your pocket
You will end up £900 better off but have a worse car. How much rent is that? 2 months? Not very much. Bills on the 306 could eat into the £900 in your pocket quickly
Sounds like you borderline can't afford a car
I had a D-turbo 306, it was great to drive and great on fuel, but wasn't very reliable. I'm sure the 1.6 diesel would be bullet proof though. Are 306's diesels not getting a bit leggy nowadays?
The margins seems too small for a car to make that big a difference to your finances
You have a £3400 reliable car but £1700 in debt = £1700 Equity
Sell the car, clear debt, minus 800 for a leggy 306 = £900 in your pocket
You will end up £900 better off but have a worse car. How much rent is that? 2 months? Not very much. Bills on the 306 could eat into the £900 in your pocket quickly
Sounds like you borderline can't afford a car
Edited by rossmc88 on Tuesday 17th July 12:45
The main attraction to the 306 is that it was my first 'proper' car.
When I was 18 I got a loan. Critical error (first of many). I bought a 306 for 3 grand, a 1.8 XS. I loved the car and modified it, kept it for aaaages. I had to service it myself and fix a few things on the way. I then had a GTi6 which I wrote off before getting a girly 306 Cabriolet.
Having owned so many I know my way around them quite well. I'm also a sucker for how good the 3 door looks even now.
I still find myself on the owners club, 3 cars down the line, revisiting the classifieds. They're so incredibly cheap now it's unreal.
Unfortunately that's not how my dad is going to see it. The 306 I want is likely to have 100,000+ miles on, something he would never recommend. He will claim it to be unreliable, too.
It's more about the debt though, it's depressing me. And yes, I'm in a secure job (whatever that means nowadays, what with the way things are...)
When I was 18 I got a loan. Critical error (first of many). I bought a 306 for 3 grand, a 1.8 XS. I loved the car and modified it, kept it for aaaages. I had to service it myself and fix a few things on the way. I then had a GTi6 which I wrote off before getting a girly 306 Cabriolet.
Having owned so many I know my way around them quite well. I'm also a sucker for how good the 3 door looks even now.
I still find myself on the owners club, 3 cars down the line, revisiting the classifieds. They're so incredibly cheap now it's unreal.
Unfortunately that's not how my dad is going to see it. The 306 I want is likely to have 100,000+ miles on, something he would never recommend. He will claim it to be unreliable, too.
It's more about the debt though, it's depressing me. And yes, I'm in a secure job (whatever that means nowadays, what with the way things are...)
I had to do a similar thing myself when I was made redundant, I was a bit luckier as I could see I was going to loose my job so I managed to sell the house and car, I now drive an old banger but the thing I find is my old car goes wrong less as it has less electrics, and the worse case scenario is if it does go pop I still get a couple of hundred back in scrap value.
I had a 306 a few years back and they are great cars you shouldn't have any problems with the rust bug as they are zinc coated.
Only thing I can remember going wrong with mine was the central locking playing up which I think is a known problem. Anyway if you keep your car a few years your only going to be hit with a load of depreciation, so I would say go for the Pug.
I had a 306 a few years back and they are great cars you shouldn't have any problems with the rust bug as they are zinc coated.
Only thing I can remember going wrong with mine was the central locking playing up which I think is a known problem. Anyway if you keep your car a few years your only going to be hit with a load of depreciation, so I would say go for the Pug.
I suppose it depends on your income and expenditure, but I'd not say £1700 debt is excessive. There is a balance to be struck between economy and expenditure that ultimately comes down to considering your quality of life. I sold my Celica 190 years ago to get something 'cheaper' and more sensible, but really the theoretical financial saving (in practice wiped out by it constantly needing work, but hey ho) didn't make up for losing the pleasure of owning and driving a car I loved. In retrospect, however extra it would have cost (even had the Mondeo been reliable) per month to keep, the pleasure of running the Celica would have been worth it.
Maybe you're in a different position where every penny literally does count, and having downgraded from the Celica to the Focus means you've already taken the big pain. If you can wipe out your debts and still run a car that, really, is still pretty good, then perhaps it's worth doing. As others have suggested, just make a policy of saving at least some of what you'd normally put out per month to pay off the debt, and soon you'll have the cash to get a nice motor again.
Maybe you're in a different position where every penny literally does count, and having downgraded from the Celica to the Focus means you've already taken the big pain. If you can wipe out your debts and still run a car that, really, is still pretty good, then perhaps it's worth doing. As others have suggested, just make a policy of saving at least some of what you'd normally put out per month to pay off the debt, and soon you'll have the cash to get a nice motor again.
My sister in law also had an old 306 1.4 which we picked up for £300 with 58000 on the clock, she kept it for 3 years and didn't spend one penny on it.
In the end the cam belt snapped just as she pulled up outside the house so the AA towed it to the scrapy for her, she ended up getting £150 for it so £50 a year for motoring doesn't get much cheaper.
So if your strapped for cash it's the way to go.
In the end the cam belt snapped just as she pulled up outside the house so the AA towed it to the scrapy for her, she ended up getting £150 for it so £50 a year for motoring doesn't get much cheaper.
So if your strapped for cash it's the way to go.
Gassing Station | General Gassing | Top of Page | What's New | My Stuff