Needing advice re car payments.

May 23, 2009 8:20 AM

My niece was in an upside down situation with a van which was breaking down constantly and was also a gas guzzler. She could no longer afford to run this vehicle. She works full time in a daycare where her children are enrolled and she is attending a tech school at night to improve her situation.

My niece stated that she was able to keep up the monthly payments and had worked out a budget, though I recently discovered she is behind with her credit card payments. I put down a deposit of $7,000 on a new Ford Focus and made myself responsible for the monthly payments of $383.76 in June 2008.

However she has proved unable to make regular payments for various reasons, e.g. estranged husband does not pay her child support on time. She got a windfall from her tax return and was able to catch up in February. Now she is behind again. What can I do to preserve my relationship with my brother and sister-in-law who are unable help her financially?

posted by lungtaworld to human relations (21 answers total)

I'm confused or maybe the question is missing something.

Your niece fell upon hard times. You stepped in to help her even though the niece seems to be hideous with her finances. And now you resent your brother and his wife for not being able to do anything?
posted by jerseygirl at 8:30 AM on May 23, 2009 [1 favorite]

Seconding that your question doesn't make sense.

I'm curious why you'd buy someone a vehicle and then expect them to take care of the monthly payments (the ones other than June 2008). Seems to me that's not much of a gift, especially to someone who is financially behind.
posted by saeculorum at 8:34 AM on May 23, 2009

I stepped in help, knowing that her parents were unable to help her.
posted by lungtaworld at 8:35 AM on May 23, 2009

How does this affect your relationship with your brother and sister and law? I'm assuming your niece is an adult. I think you could see this as your purely your niece's situation and not her parents'. It's possible that they really can't help her financially, but it's also possible that they're less willing to take risks and make sacrifices to help her because they know she's not responsible enough to follow through.

she has proved unable to make regular payments for various reasons

The fact that she was only able to catch up when she got a windfall of tax money means that she simply can't afford your agreement. You can look forward to hearing more reasons and extenuating circumstances, but the bottom line is she can't hold up her end.
posted by hermitosis at 8:35 AM on May 23, 2009 [2 favorites]

Is this your question: You loaned money to your niece, with the expectation that she would live within the budget she set. She is not living within the budget, and you would like to get out of your end of the agreement (the Ford Focus bill) without causing problems with your relationship with her parents?
posted by Houstonian at 8:40 AM on May 23, 2009

From what I understand, daycare workers tend to make very little money - next to nothing.

She has kids, is working fulltime, going to night school, and has an absent/financially unreliable partner. God help her.

That you stepped in to help her is admirable.
posted by R. Mutt at 8:45 AM on May 23, 2009 [3 favorites]

Write the debt off as a bad debt and take a tax deduction?
posted by dfriedman at 8:59 AM on May 23, 2009

Yes, it was admirable that you stepped in to help your niece when her parents were unable to. However, what I don't understand is why, knowing her unstable financial situation, you purchased her a new car. There are many affordable and safe used cars out there, which would have lower monthly payments and not created this sort of financial burden for you and for your niece. Did you have an agreement in writing with her that she was supposed to make certain payments to you at certain times?

You don't give us any information about your brother and sister-in-law in your question, so it's hard to know how you can preserve this relationship unless you tell us how they are feeling about this and dealing with it. Are they resentful you stepped in, or are they very thankful? Perhaps you're the resentful one and you don't know how to act around them now that you're in this deep?

My advice to you would be to sell the Ford Focus while it is still has a good chunk of its value left and get her an affordable used car. This is a good lesson about getting mixed up in family troubles.
posted by snugglebunny at 9:04 AM on May 23, 2009 [1 favorite]

The question reads like

"I loaned my friend some money. He is irresponsible financially and is not going to pay me back. Can I have some cheese?"

There needs to be some connective logic between the last sentence and the rest. You aren't thinking that her parents are responsible for her debt to you, right?
posted by rr at 9:04 AM on May 23, 2009 [4 favorites]

OK, I think I get what you are asking.

But first, this part wasn't asked, and it may be too late to matter now, but for posterity's sake:
If someone is in dire financial straights, and already has credit card payments, setting up expensive car payments is no help. Better to have taken the $7000 and just bought a used car. Heck, even a few thousand will get you a dependable used car if you shop around. (I currently drive a 10 year old car that does everything I need. I've taken road trips totaling over 4,000 miles so far this spring, and I only paid $2500.) The last thing anyone with a tight budget needs is car payments, not to mention the more expensive insurance needed on a new car.

As far as your relationship with your brother and his wife: that question seems to come out of left field after the backstory. They are not part of the equation, nor are they responsible for their adult daughter's debts. Plus, you say they are not able to help her anyway, so I don't see any basis for ill will or bad feelings towards them.

The reality is, it was a mistake to make yourself responsible for her car payments. I understand the desire to help, and having compassion for a family member. But that emotion has to be balanced with practicality. Now you have to decide what to do about the car. Expecting her parents to reimburse you is not realistic, and will only lead to resentment. Drop that expectation totally, and maintain a good relationship with them. They have done nothing wrong.

So, now what? Without the whole picture, it's hard to say, but you can certainly consider selling the car to get out of the payments (you will probably take a loss). Or, if you can afford to keep making the payments, do so and hope your niece gets caught up later; but meanwhile you can't let yourself get bitter over it. Or, take the car back for your own use, and help her get a used car with no payments.

The bottom line is, you really have to take full responsibility for a choice that you made, and then decide on the appropriate course of action. You certainly have a big heart, and wanted to help your niece, but there probably was/is a better way.

Good luck!
posted by The Deej at 9:05 AM on May 23, 2009 [1 favorite]

Just throwing in some of my own 2 cents...

If she's made payments toward it, does she have equity in the car if you sell it?

Also, how much was this car that the payment is so high? Just curious because that sounds very high for a lower tier car with a 7k down payment.
posted by mazienh at 9:28 AM on May 23, 2009

Those monthly payments are really high for someone on that income. My share of rent is barely more than that and I live in a city. I think a large part of this is coming to terms with the mistake you made. As others have mentioned $7k can get you a reliable used car, and there was no real reason to buy her such an expensive car with such high payments and then expect that she can pay them. She probably didn't understand this when she agreed to the arrangement, either.


I'm assuming since you're responsible for the payments that you're either on the title, or you're a cosigner on the loan. If you are the owner, you can always sell the car, pay off the note, and then either let her be on her own for transportation or help her get a cheaper car. You'll almost certainly lose money doing this, but if you want to do anything other than keep paying her monthly payments for her until she gets on her feet, it may be your only option.
posted by ishotjr at 9:58 AM on May 23, 2009

Actually, what deej said.
posted by ishotjr at 9:58 AM on May 23, 2009

I think the best way you can help is to sell the car you bought, and use whatever is left over to buy a used car.
posted by anadem at 10:02 AM on May 23, 2009

I think the best way you can help is to sell the car you bought, and use whatever is left over to buy a used car.

And I suspect that if you explain to her that it's dawned on you that she can't realistically afford her payments and that you'd like to come up with a solution that's less stressful for all of you, she won't feel bad about this in the slightest. As opposed to making her feel bad for not meeting a financial obligation, which I'm sure she agreed to at the time out of sheer gratitude and optimism.
posted by hermitosis at 10:12 AM on May 23, 2009 [3 favorites]

She can't afford the payments on a new car, so although your intentions were honorable, the car was a bad idea. At this point it would be best for you to cut your losses and sell the car.

A car is a depreciating asset anyway, so it's not a wise investment by any means.

If you still want to help her, perhaps you could get her an older car. Maybe an something in the $1000-3000 range that would get her by until she finished school.
posted by Ostara at 10:13 AM on May 23, 2009

To answer some answers!
I had to buy a new car rather than used because my niece's vehicle was in an upside down state due to a lack of "Gap" insurance.
She and her (now estranged) husband purchased a minivan, but before she made the first payment she had an accident which totaled the vehicle. The insurance is still working on the case to reimburse her. This case (after two years!) is still not resolved.
In the meantime she needed a vehicle, so purchased another used minivan. This second minivan had multiple electrical problems and was a gas guzzler, and so (with my help) traded it in for the Ford Focus. The dealer would only take the trade in on the purchase of a new vehicle.
posted by lungtaworld at 11:16 AM on May 23, 2009

I guess I still don't understand the preservation of the brother/sister-in-law relationship part of your question.
posted by jerseygirl at 1:28 PM on May 23, 2009

The dealer would only take the trade in on the purchase of a new vehicle.

Then you bought the wrong car at the wrong dealer.
posted by chillmost at 2:36 PM on May 23, 2009 [3 favorites]

We're a bunch of folks who would love to help you out and give you direct answers to your questions, but right now, we do not know what those questions are. We barely understand the storyline, and even once we piece together the story, there still are not any clear questions.
posted by kch at 4:37 PM on May 23, 2009 [1 favorite]

The poster sent me a Mefi message that completely clarified his question. But, he asked that I not share it here. Perhaps he'll update again with the details.
posted by Houstonian at 4:45 PM on May 23, 2009