What the hell do I do with this Vespa?
August 5, 2008 7:42 PM   Subscribe

What the hell do I do with this Vespa?

In October 2007, I purchased a Vespa with high interest financing. I had a nice job, I justified it as a work-related purchase, but really I just wanted a sweet toy. Also I'm young and stupid. So - through a misunderstanding I won't go into, I got fired. I could no longer afford the monthly payments, let alone the insurance. I haven't been able to make even a minimum payment since May 2007. Meanwhile, because I lived in a crappy neighborhood, a bunch of street kids beat the Vespa up, knocking off a mirror and scratching and denting it. I tried selling it at a must-sell-now discount, significantly less than I paid for it, but I couldn't do that because I owe too much on the loan, and you can't transfer a title over without the lienholder releasing it - which means I have to pay off the loan. But I can't pay off the loan. So, I'm spiralling further into debt, I have a Vespa I can't get rid of or even drive (it doesn't even start anymore), and - and - here's the catch - my best friend (also young and stupid) co-signed the loan because I have no credit. So, if I have it repossessed, I ruin her credit for 7 years. And mine. She's also poor, and I have no way (as far as I know) of raising the cash to pay off the loan to sell it at a loss.

What do I do?
posted by bukharin to Work & Money (18 answers total) 1 user marked this as a favorite
you can't transfer a title over without the lienholder releasing it - which means I have to pay off the loan. But I can't pay off the loan.

Can't you sell it for cash on the barrel (lump sum payment) to someone - even at a loss - and use the cash to pay off the loan?

It might be in crappy shape, but it's probably fixable, (?) and there is a hot market for scooters right now with the gas-price thing and all. Advertise it honestly, sell it a little bit short, make up the difference yourself, and be done with it.

I'm not sure why you're "spiralling further into debt" - vehicle loans don't usually have compound interest, do they? - so as long as you're making monthly payments you're reducing the principal and staying above water, not making your debt any worse. Or so I think - maybe you don't have the same kind of loan that a car loan would be.
posted by Miko at 7:53 PM on August 5, 2008

Response by poster:
Miko - I tried selling it, but I can't transfer the title because the title is in the name of the bank that financed it. Nobody will buy a vehicle if they can't have a title. So yes, it would be nice to be able to sell it at a loss and use that to pay off the loan, but I can't.

Also, I'm not making minimum monthly payments, because I can barely keep the rent paid and the pantry full. I owe more now than I did when I started, because of late fees, etc.
posted by bukharin at 7:55 PM on August 5, 2008

What about trading it in?
posted by Miko at 8:05 PM on August 5, 2008

Call the bank and tell them what you told us.
posted by LarryC at 8:07 PM on August 5, 2008 [1 favorite]

The problem isn't the scooter, bukharin, it's the unserviceable debt.
Luckily, being in debt isn't an unsolveable problem. You want a financial counsellor---they're called credit counselors I belive in the US---who may be able to make an arrangement with your bank that will prevent you and your friend getting further into debt, and who can advise you on what best to do to pay off your loan.
I'm not an American nor a counsellor myself but your Government's FTC seems to have good advice about choosing one.
posted by Fiasco da Gama at 8:09 PM on August 5, 2008

Does your insurance cover any of the damages? Have you contacted the lender about your difficulties paying? Have they said anything to you about the missed payments yet (did you mean no payment since 5/08?)?

Can you sell anything - books, furniture, computer, to have some extra cash during this time? Can you pull the scoot into your apartment, get the manual out, a small engines guide and get it running again?

I'm sorry for your situation. Everything has a solution. Try not to panic. You'll figure it out. I think if I were you I would break this down into little problems to solve and do one at a time - resolving the issue with the lender first to try and limit the damage to yours and your friends' credit.
posted by dog food sugar at 8:17 PM on August 5, 2008

Sorry to hear about your situation. Definitely give your bank a call to find out what they can do. Can you get a job waiting tables or something, just so you can raise some extra cash? Find a job--any job--and work a ton of hours for a few months. Working like a beast at a crappy job for a limited time is a small price to pay for piece of mind and good credit. You only need to raise the difference between the amount you still owe on the loan and the price you can sell it for.
posted by HotPatatta at 8:30 PM on August 5, 2008

I'll hop on the "call your bank" bandwagon, but add this. Call them and make an appointment to talk to someone in person. (I'm assuming it's a local bank. If not, you'll have to do this by phone.)

Remember, the bank is not interested in repossessing and selling your Vespa. They will get next to nothing for it, and still have collect the difference from you. They would rather work something out. Just lay your cards on the table. Go in with your records, the job info, and maybe even a couple personal references. You might also want to print out some web pages with Vespa pricing. Get an estimate on the repairs. In other words, have all the information right there so everyone knows what they are dealing with. Tell them your priority is to protect your friend's reputation, and that all other considerations are secondary. Ask them for suggestions and options of how to handle it.

They may extend the terms, stop accruing interest, or refinance it into your name. Or they might just go ahead and repossess it and you are back where you started. But it's worth a shot to talk to them. Even if it gets you nowhere, it's the right thing to do.

Good luck!
posted by Fuzzy Skinner at 8:40 PM on August 5, 2008

Does your co-signing friend have any interest in owning a Vespa? Have you told her that you're not paying the minimums?
posted by 26.2 at 8:59 PM on August 5, 2008

Sounds like you're panicking. That's good. Desperation makes hard choices easier.

- Call your bank, talk to them about it. They don't want to repossess a beat up Vespa. They will work with you, but don't let them take advantage of you (if that's even possible at this point...) Get a second opinion from a credit councilor. Are you in school? Your college may have both financial and legal advising for free.

- Sell everything you own. Books, cds, furniture, television, etc. Do it on Craig's List. Don't worry, you can replace all of your stuff someday when you have another good job.

- Disconnect any service you can live without - get rid of cable and internet service.

- Learn to eat super cheap - rice, ramen, cheap fruits and veggies. Don't forget the vitamins.

- Get a second job, preferably one that will build character. Factory work, janitor, waiter, bar tender, the guy who stands outside a predatory lending agency dressed as Uncle Sam spinning a sign around...

- Call your insurance company, explain that your vehicle was vandalized. There will probably be a co-pay - you should pay to have your scooter fixed so that you can then sell it and pay down on the loan. Or at the very least go back to using it.

- Borrow money from friends and family. Yeah, it's shitty. Sure it will strain friendships, but when your back is against the wall...

Good luck!
posted by wfrgms at 9:05 PM on August 5, 2008 [3 favorites]

You've already trashed your friends credit. Every late payment for you was a late payment for him. Just an FYI---or at least that's the way it worked for my good friend who cosigned for his buddy.

Also....how are the job prospects looking?
posted by TomMelee at 5:35 AM on August 6, 2008

1. If you haven't made a payment since May 2007, your friend's credit is already totally screwed, so a repo isn't going to make much of a difference.

2. Once it gets reposessed, the lienholder will likely sell the scooter and sue you for the difference.

3. You don't have insurance on it, do you?

4. This is a "young and stupid" decision that is going to haunt you and your friend for up to a decade, so hopefully, you got some fun out of it.
posted by M.C. Lo-Carb! at 6:28 AM on August 6, 2008 [1 favorite]

I agree with wfrgms. You've got to weigh your options:

1. Vespa is Repo'd, friend's credit [even more] screwed from your actions
2. Find the money, somehow, to make payments on the Vespa.

You already knew that, but looking at it in the simplest terms makes it clear what you have to do. You've got to be blunt with yourself.

How much are we talking, anyway? I'm not up on what Vespas go for these days, but I've heard it's a pretty decent amount.

Let's randomly say you owe $5,000 (I've no idea if this is high, low, or right on - just a starting point). For someone who has low income, that's a lot of money. Heck, that's a lot of money for someone with a decent salary, assuming they don't already have a nice savings accrued. But in the "grand scheme", it's not that much money. With hard work and a lot of humility, you can come up with it. Or, as was suggested, throw yourself on your family, however distant, for help.

When the chips are down, you have to decide whether you value your friendship and the financial future of another person over the amount of work it's going to take to get you out of this. In fact, there's a distinct possibility this person won't be your friend much longer, but that's beside the point: You still have to do the right thing.

Point is, your question shouldn't be "what should I do", but "how can I make enough money to pay this off?". I can almost guarantee that you're overlooking/ruling out "desperate measures": Moving to a low-income apartment, rooming with people, selling all your possessions, and eating like a homeless person. If you refuse to humble yourself to this point, then you've already chosen to take the easy way out and have it repo'd.

Billions of people today and throughout history have lived on literally nothing. I'm sure you can find a way to lower your standard of living to make a few grand.

And remember, if you do the right thing, no matter how hard it is right now, you'll never regret it. In five years you won't even remember it. You'll have learned a lot of hard lessons better than you could anywhere else (not to make poor, life-altering financial choices, the value of hard work, responsibility, and the true meaning of friendship - just to name a few). That far outweighs the temporary inconvenience of having it rough to pay off what you got yourself into.
posted by sprocket87 at 6:51 AM on August 6, 2008 [2 favorites]

As a post script:

I just came across your post about some of your financial history. It sounds as if you already well-know the lifestyle I was proposing, and have had your share of hard times. Knowing this, I certainly don't want imply that you're not willing to struggle for this.

That being said, there's always room to squeeze tighter. Imagine that you don't have a choice. Think of people whose homes were foreclosed on suddenly, and they had 24 hours to have all their possessions out of the house. Imagine they have two kids, no savings, no friends or family to turn to, and a crummy job. What happens? A lot of them end up in homeless shelters, at least until they can get their feet on the ground.

Now I'm not suggesting you need go that far, but I'm just trying to illustrate the severity of some people's situations, and that yours isn't that desperate yet, from the sound of it. Yes, it's bad, but it could be worse, and you can get yourself out with enough industriousness.
posted by sprocket87 at 7:06 AM on August 6, 2008

Miko - I tried selling it, but I can't transfer the title because the title is in the name of the bank that financed it. Nobody will buy a vehicle if they can't have a title.

Sure about that? I bought a scooter a few years ago without a title. And six months ago I sold it to someone else, without a title. (It wasn't stolen or anything, the title really was just lost. And the process for getting a replacement title was way more trouble than it was worth)

Of course, I can imagine that if you lived in a state that really insisted that scooters be insured and have plates (unlike DC), I could see that being a bigger issue.
posted by meta_eli at 8:54 AM on August 6, 2008

Once it gets reposessed, the lienholder will likely sell the scooter and sue you for the difference.

One thing I forgot to mention is that once you have been sued by the lender, and a judgement is reached, your paychecks will be garnished. If you switch jobs, they'll find you in a couple months. That is, unless you find some sort of job that pays you "under the table," as they say.
posted by M.C. Lo-Carb! at 8:55 AM on August 6, 2008

Response by poster:
Thanks for the advice.
I stopped panicking about three months ago, and now I'm just resigned to being fucked. Still, I need to take care of this.
There's no squeezing my belt any tighter over here - I'm starting another job soon that pays more, but grad school really limits what I can do on that front. (I've been working a pretty low wage job most of the summer.) There's nothing left to sell. I've had to move four times in the last six months and I'm basically down worthless sentimental objects.

The outstanding amount on the loan is 7k. The minimum (delinquent) payment is $800.
My mother's idea was to get a student loan, which would be lower interest, use that to pay off the Vespa, and then sell the Vespa and pay off the student loan...
posted by bukharin at 4:24 PM on August 6, 2008

That thought crossed my mind as well. I don't see why not at this point. Hopefully you'll be able to get one and get this taken care of.
posted by sprocket87 at 5:37 AM on August 7, 2008

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