Downgrade your car to become debt-free?

[C.A.R.]

--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?

[C.A.R.]

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...)

[C.A.R.]

The £1700 is...

£1000 credit card with my bank account. Had got this down to £800 last year but only been able to make minimum payments since and it's gone up again after a couple of purchases (bad ideas)
£350 overdraft
£300 on a store card (stupid, stupid thing)

Obviously the best answer is to be more disciplined with my income. Trouble is, I need every spare quid I can get my hands on right now, it would make life feel a lot easier without these debts hanging over me.

As it stands, here today, right now, I have no money on me whatsoever and that which is in my account is all spoken for. If something went wrong now I'd be phoning around my family asking for financial help. That's what scares me.

[C.A.R.]

I've tried putting a baby (my nephew) in the back of a 5-door and found it a hassle though. The doors are so tiny, you can't get in front of the seat, you're side-on. Reaching over the baby to strap them in was a mission!

Plus we have one of those rapid isofix bracket things, which means the seat clips in and out without involving the belt. Provided the car has isofix, it should be a doddle.

[C.A.R.]

Someone raised a good point - an old car will invariably need more money spending on it.

At present the Focus is costing me nothing but fuel, tax and insurance to run. Nothing is wrong with it. An older car is more likely to have problems, but surely if I buy wisely then this won't be a concern? Plus, being old, it should be quite easy/cheap to maintain.

Sounds like I'm trying to convince myself again.

[C.A.R.]

The 306 is pretty safe, I'd say no less safe than a Focus (not that I work for Ncap). I had a pretty big accident in one and I'm still here.

The problem is, on top of having no disposable income for things like nursery decorations, toys and clothes for the newborn, I'm working as hard as I can in a full time job which is fairly secure then driving home in a car which depresses me.

On the flipside there's a fear that being reunited with a 306 might be a nightmare. It might not be how I remember it and it could end up costing me more and then I'll feel even more down in the dumps!

I dunno. Take some nice pictures of the Focus and sling and advert up this weekend and see what happens I guess.

[C.A.R.]

Thing is though, the overdraft on my main account should be more than sufficient for the 'rainy day fund' should I need it. I can then build up the money in my savings account with the money that I would usually put towards credit card payments.

We're trying to 'buffer' the initial cost of baby by including things like packs of nappies in our weekly shop now, so we have built up some 'supplies' haha.

Will get some good pictures of the Focus tonight and set about putting an advert together methinks.

[C.A.R.]

Well,
Mentioned my 'masterplan' to the mrs this evening after dinner and she promptly bit my head off. Perhaps she's just being hormonal...

Anyway, she says that it's too late to be going changing cars now what with baby due in 14 weeks and questioned why I felt the need to change cars so frequently. Is it because she isn't a driver maybe, that she doesn't geddit?

The Focus is soul-destroying. To top it off it's metallic grey. Grey FFS!

I have a mind to putting the car up for sale this weekend regardless and seeing what response it gets. I can live without a car for a short while - my boss can give me a lift into work should I need it.

Going over to the other idea, what's the longest "interest free" credit you can obtain? My bank offered one for 12 months, but this would introduce a new monthly bill of £80 odd. That's the difference between eating and starving for a week every month.

I need a beer.

[C.A.R.]

Landlord said:

On the topic of buying baby stuff - I believe we have some taking up space in our garage (not sure what it is but I think push chair etc - decent quality one too - Quinny, I think). If you're interested, you're welcome to have them for nothing if you can collect in the next week or two (moving late July/Early August, y'see). I notice you're in Herts, I'm in South Bucks so potentially pretty close.

PM me if you're interested and I'll check what we have.

I will PM you after posting this Landlord, very helpful

Right, after much thought and consideration and a chat with my dad I've put the car up for sale in the classifieds. Now just sit back and hope for some emails / phonecalls I guess!

Thanks for all your input / opinions people, I will try to keep this thread updated with how things work out...

[C.A.R.]

My monthly take home is not far shy of what my debt is, I'm 23.

I pay-
Rent - £675
Council Tax - £113
Bills - £100-115
Mobile phones - £50
Fuel - £220ish
Car insurance - £100

GF has been on Jobseekers for about 6 weeks now. What she gets goes towards food and clothes etc.

Don't get me wrong, I think better discipline could see my debt erased in a few months, but certainly not before the baby arrives. Selling the Focus seems like a quick ticket out and it's a car which I really don't like. I can't really bring other costs down elsewhere, so the car is just an asset which is depreciating before my eyes (the way I see it). I don't need the 17" alloys the same as I don't need the leather interior it has, I just need a decent commuter car.

It's my own fault because whilst living at home out of my mum and dads' pockets I have had 'fancy' cars or at least those which were expensive to buy and maintain given my age. I'm also terrible at keeping a car longer than 5 minutes, I've already owned more cars than my dad!

Hopefully owning something which I'm 'content' with but not overly attached to will reduce what I spend on cleaning and 'doing up' my car.

[C.A.R.]

em177 said:

How are you £100 a month insurance for a diesel focus!?

Policy was for the Celica, changing cars had a reduction but I was kind of stuck in with them for the remainder of the policy (4 months) by which point the additional 1 years NCB should help reduce insurance figures for next year. Hopefully...

So that £100 repayment will half, if I can't afford the £500 policy up-front and end up having to pay monthly.

[C.A.R.]

Some food for thought on this thread, definitely.

Ultimately our mutual decision to have a baby was made whilst we were both in employment and living at home with parents. I perhaps underestimated the costs of living in private accommodation with just my income, which was easily done because you don't appreciate the utility bills when they are being paid for you.

I raised the £1900 to pay for our letting agency fees, deposit and suchlike, so theoretically paying off the debt should be easy - but it isn't. Now I'm paying out 50% of my income in rent and bills, whilst Mrs C.A.R.s income is limited to whatever she can get through Jobseekers. At nearly 7 months preggers she's not the most motivated person to find work, what little there is to apply for.

My first priority is Mrs C.A.R.s happiness and security, so moving closer to work was a no-no. She has family here in the town who are local enough to help out when she needs it and she's unable to drive after failing her test earlier this year (would've made life much easier...). I live 18 miles from work, public transport between here and there would take about twice as long and is very unlikely to save me any money, as there is no direct route between here and there.

Ultimately it comes down to whether or not the car sells. I made a poor decision going for a limited edition model (yeah, really) when all I needed was a boggo car. If I can get the sort of money back which I paid for the car 3 months ago then happy days, but if I end up needing to keep it then so be it - it won't be the end of the world.

I've got a running spread-sheet here trying to calculate monthly outgoings and how we can reduce them whilst still putting some money away for the baby. At present I've got it down to about £900pcm for the house stuff, but the remainder still seems to trickle away.

Worst part of it all is of course we would be better off if I didn't work. If we were both on benefits I wouldn't need to worry about accommodation costs, friends I grew up with at school on Facebook who already have 4 or 5 kids living the life of riley and moaning about holidays, just boils your piss!

[C.A.R.]

Just browsing the classifieds for a reliable diesel and found a 1.8 petrol. Granted, this will only get about 35mpg, but my thinking is-

I've owned 2 cars with this engine in the past
It has lower mileage than similar diesel models of the same age
There's less to go wrong and - when/if it does - it will be cheaper to fix?
Tax is the same as is the insurance.

Now I'm not sure. It's a £600 car because it has a dent in the side, which isn't too bad. I would know the car inside-out, but it could end up costing me around £400 a year more in fuel - would that be so bad? I'm looking at 13,000ish miles per annum. A diesel isn't 100% necessary in my opinion, but convincing myself a 1.8 is a wise choice is tough... I don't want to be crippled by fuel bills.

[C.A.R.]

bakerstreet said:

As per most other people's advice. Sell Focus, buy pug 306 and pay off debt. Simples. I'm guessing the next two pages will say a similar thing. Let us know when you have actually done it!

Have you thought about cycling to work for the summer months. This can save you a lot of money.

It's in motion buddy! Against my fathers advice the Focus is in our classified ads and on Gumtree / owners clubs. I'm yet to 'pay' to advertise it though.

I think it would also kill me to cycle. I've not ridden a bike for about 6 years and my route (all 18 miles of it) is not all well suited to cycling, so it'd be even further than that!

[C.A.R.]

Fortunately we have most of the items on your list already, so we are as prepared as we possibly can be.

When baby actually arrives I think Mrs C.A.R. will be entitled to more support from the government, I just have to get my budgeting right by that time too!

[C.A.R.]

Stage 1 is complete - the car has sold. First car I've sold which I wasn't sad to see the back of!

Now on the hunt for a nice little runaround at half the cost of the Ford. I'm viewing one on Friday night and potentially viewing one on Saturday morning, depending on how the phonecall goes later on today!

Also, further to my other thread "3doors vs 5-4doors" both cars I'm viewing have 3-doors Decided that if I'm going to be the one tasked with getting the little person in and out of the car the ultimate decision should be a car which makes me happy!

Now just to find one which isn't a complete dog...

[C.A.R.]

Thought I would follow this up (as hardly any threads on PH have a conclusion!)

I sold the Focus last week and then chatted up someone who had a nice 306 HDi. He wasn't interested in selling it but I am still a member of the 306 forum, so I emailed him to see if he was interested in selling.

Picked this up on Monday night -



Really, really comprehensive service history folder and a huge wad of receipts. It's a Y-plate so it has the cheaper tax (usually £220 per year prior to this reg date). It has 11 months MOT and Tax. Paid a little more for it, but it's incredibly clean and tidy.

I'm now debt-free, in a car which I love, which drives beautifully (if a little bit of a tractor) and a happy Mrs C.A.R. has subsequently ordered the buggy she wanted from Mothercare for our baby girl!

Thanks for everybody's encouragement to doing this!

Please don't hold back on comments regarding the cars practicality, reliability or appearance!

[C.A.R.]

Thankyou, made me smile haha.

I'm looking forward to becoming a dad, but really scared at the same time.

Now I just have to show the Mrs how easy it is to fit a child seat in the back...!