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Advice for how to keep our car

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3K views 23 replies 17 participants last post by  Greebo 
#1 ·
DH bought a used car in May. Long story short, the second insurance payment wasn't made and the insurance was canceled in the end of June. I found out about it a couple weeks ago. We rearranged money already accounted for, and got new insurance with the same company.

Yesterday we got a letter in the mail saying that the credit union that gave us the car loan was notified by the insurance company that it was canceled in June, which violates the loan agreement. They need proof of continuous insurance within 5 days.

We have a copy of the insurance card that shows October as the end date, but I'm assuming that won't do any good since they were notified by that company. And I don't know if it would put us at risk of fraud to try to use that.

We're in the worst financial position we've ever been in. We'll be out of it next month. We owe $5,000 on the car loan. We could potentially have that paid off by December, but we have literally nothing beyond the monthly payment that we could give in the next two weeks.

We have "nothing" to sell. Our tv is 15 years old, as is most of the furniture. Our computer is old. Our rent is phenomenally low. I walk to work. I tried a yard sale and Craigslist and made less than $100. I have no real jewelry.

And of course we have bad credit. DH was able to get the car loan through the credit union by the skin of his teeth. The only thing I can think of is to get a loan that will cover what we owe the CU, but I don't know where we'd find one with our credit. We have no credit cards. I would be willing to take one on if we could get a limit that would cover the car loan. I know it goes against all principles of good money management. But we're not at risk of overusing a card. Our financial situation will change next month, and we could make that card our top priority and have it paid off in as few as four months.

We can't lose this car. It's a 2002 with over 100,000 miles. We bought it for the brand reliability and because DH's dad will work on this brand for only the cost of the parts. DH drives 20+ miles to work every day and needs a reliable car and a cheap mechanic. This car was supposed to be the beginning of getting out of debt for us. :( Letting it go would mean settling on a very cheap clunker that would add up in wear and tear very quickly while we tried to save to buy another reliable car with cash. This car was the one good money decision we've made in years.

Help, please.
 
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#2 ·
Call the Credit Union, explain the mix up, apologize profusely, and see what they say.

They don't want your car - it's not worth it to them for $5k on a 100k mile 2002 car.

If your car loan is covered and you have insurance NOW, I'm betting they'll work with you.
 
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#6 ·
Thanks, Savvy. Hopefully they did. We'll find out tomorrow. DH is going in to talk to or plead with them. But regardless of the notice there was still a gap that was over 30 days, which is still in violation of the loan agreement. :(

The responses gave me a new outlook, though, and I'm going to assume it will all work out.
 
#7 ·
The responses gave me a new outlook, though, and I'm going to assume it will all work out.
No.

NO NO NO NO NO!

DO NOT ASSUME.

Get on the phone and take ACTION.

If you talk to them, if YOU take the bull by the horns and reach out first, you will get a much more understanding party on the other end 9 times out of 10. If you just wait, do nothing, and take no action, and just assume it'll work out, you surrender your fate to them.

If you want to assume, you have my permission to only ever assume ONE thing: Avoiding a potentially negative situation will NEVER make it better, only worse.
 
#9 ·
If you don't have car ins on a car with a loan they normally add the ins for you at an outrageous rate and only for them to be paid for the car should there be an accident. Why don't you contact them and see if they will just add that onto your loan that you already have for the amount of time you were not insured. OR will the insurance company in any way allow you to back pay. (It would really be in their best interest; they'd be getting money for time already passed with no accident happening(free money for them)
 
#16 ·
Yes, I think she should be in contact with the Credit Union. If nothing else, the negotiations should be able to drag things out until they have money to pay off the loan.
And 30 days of supplemental ins from the credit union doesn't sound like the worst solution.
 
#18 ·
Wow!

Ok, first Greebo, I sincerely appreciate your concern, and you're right. I need to be careful about assumptions. But as someone else pointed out, I was probably using the wrong word. My husband is going into the credit union today. The only reason it isn't a joint venture is because it's 20 miles from home, near his work. If it was in both of our names I would be more physically involved, but since it's only in his and it isn't convenient for me to be there with him, I'm going to let him handle it.

It never occurred to me that an insurance company may be willing to let us back pay and pick up the month we missed. I'll call them today and see if that's a possibility. I hate that there was a lapse. ETA: I called and they don't backdate. Bummer. :(

And this has all really made me realize the urgency of our situation, that while I can count on DH for nearly everything, I can't count on him to pay bills on time (and he probably figures he can't count on me for the same). So I spent the whole day yesterday going through bills and papers and teaching myself how to use Quicken. I'm in awe! By the end of September we'll have plenty of 'leftover' money for our baby e-fund and we'll be able to start snowballing. We should have our $1,000 by mid-October. And I was able to manipulate the next couple weeks to keep us out of the red. I'd already started envelopes, so I'm using them to organize the actual bills and for back up tracking. I knew this rut wouldn't last long, but it's amazing to see 'on paper' how fast we can get out of it. I know the real trick is sticking to the budget, but this is a first huge step towards making that happen.

Thanks, everyone!
 
#20 ·
Yay! I'm glad it worked out for you. :cheer4:

Now get to work on that budget! :laugh:
 
#21 · (Edited)
I'm glad it worked out for you! It was a scary lesson but you learned something about budgeting and I'm sure it was a wake up call to keep on top of all payments.

Make sure you put all your bills into Quicken, including not only monthly bills, but quarterly/biannual/annual payments like insurance, and flag them within Quicken so that the 'coming due reminders pop up at least 10-15 days before they really are! Check the actual bills regularly to make sure the due date hasn't changed. I nearly screwed up our property tax payments because I assumed (sorry Greebo you were right) when I entered them into Quicken that 'quarterly' meant exactly three months apart, when in the case of our county the due dates were NOT evenly spaced out. Fortunately I caught the mistake and paid that installment before incurring a late charge, but it was close. Never again.

Good luck on your snowball and keep everyone posted on your progress, we LOVE to read success stories.
 
#22 ·
Glad it all worked out and that you were able to gain the valuable insight into your finances. Now you'll be on your way to success. Please keep us updated on your progress.:)
 
#23 ·
Good luck!
 
#24 ·
That's Awesome! We use Quicken to track all our cashflow. It's an awesome program that can do as little or as much as you need.
 
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