Meet Ariane, or How I Doubled My Personal Debt In 15 Minutes
I've either made the smartest financial move of my life, or the second-stupidest.
The stupidest financial decision I ever made was to get student loans. Young people, learn from me. Student loans of the modern era are not your parents' student loans, easily paid off five years after graduation. My student loans were bought and sold three times within six months of my graduation, all without my consent and folding the interest in as principal. Ah, the nineties. They ended up with Sallie Mae, which jacked the interest to the skies and demanded half my salary until I ended up borrowing even more money just to stave them off until I could make a deal with the U.S. Department of Education to consolidate them into an amount roughly three times what I originally borrowed. Since then, my loans have hovered over my head as an impossible debt that I cannot hope to pay off unless that Mega-Millions ticket pays off tomorrow or someone doubles my salary.
It also destroyed my credit, as did a number of medical bills that my insurance mangled over the years. I don't use credit cards; I cut them all up and paid them off beginning in the mid-nineties. I fell into a lapse of stupidity when I started touring and got a credit card because hotels were refusing to reserve rooms on debit cards; but having learned my lesson, I cut it up a few years ago and will have it paid off within the year.
Suffice to say, credit and I are not good companions. The only cars I've owned were used cars, bought for cash or via someone else's credit. My dad helped me buy Mulan the Toyota in 2004, because my toxic credit set off klaxons when we walked into dealerships. She was five years old and had 86,000 miles on her. I paid for the car, but it was Dad's good name that got it for me.
I paid off Mulan in 2009, and happily drove a debt-free car for the last four years. Mulan, who was named by Boy at the age of five, has been a trooper of a car. She has visited more states than most people, carrying me to conventions in Chicago, Kansas City, Indianapolis, Lexington, Atlanta, Nashville and more, besides wearing a track up and down I-55 to Memphis. She's hauled books across the Midwest and back, more books than a normal sedan really should be asked to carry. In all, I put nearly 200,000 miles on the old girl.
A few Christmases ago, Mulan's timing belt snapped. It was disheartening, but the first major repair for the car was not the worst thing in the world. I wrote Infinity to raise the money for the repair, which turned out to be one of my better novellas. Then right after we moved into the house, Mulan threw her transmission. That $1,700 debacle was a much larger problem. We sold everything we could think of, raised money with the only marketable skill I have (writing, you pervs, writing), and still had to borrow the rest.
If I'd known she'd only last another year and a half, I think I would have sadly bid her farewell then. But we had just moved into the house and we were flat broke. We'd had no time to prepare, all our tax-return money had gone into the move, and Jimmy was still paying off his car to the tune of $400 a month. Don't get me started.
Mulan trundled along for more than a year, but she's been showing her age. So it wasn't a complete shock when she busted another timing belt two weeks ago. It was, however, bad timing.
We had a plan. Once Jimmy's car was paid off, we would start setting aside money to buy a replacement for Mulan. Not a new car, or even a new-to-us car. A Craigslist junker for cash. Drive it into the ground, then get another one. Neither of us wanted a car payment. Unfortunately, Mulan didn't get her copy of the plan.
The Craigslist plan was out: Jimmy still had two payments left, we'd had no time to build up the cash. The repair would be $650, also beyond our capabilities unless we stiffed the rent or all our bills for a month. And I'm still working on the novella for the Kickstarter, so another crowdfunding project was out.
Enter Dad, who kindly offered to introduce me to his awesome Honda Lady. She handled internet sales at a local dealership, and had sold Dad his two Hondas, which he loves. I had frequently admired my stepmother's Honda CRV, and we thought that would be the perfect car: reliable, tough and can haul books. And maybe my credit had improved enough to get a high-mileage, used CRV with Dad as a co-sign.
So that was the new plan. Honda Lady was terrific. She had the CRVs I'd picked out on their website ready when we showed up for our appointment, and Dad and I went for a few test drives. (Wow, they are sure nicer at a dealership than they are at the bad-credit junker lots that Jimmy and I usually frequented. They didn't even photocopy my driver's license or ask for a blood sample.)
But the new plan had problems. The higher-mileage cars could not be financed for a long-term loan, because if it dies halfway through the loan term, I have a big problem and therefore so do they. Oddly enough, they could finance me with a better loan if I bought a new car.
I'd been looking at CRVs so that I could haul the booth around the country, not because I really wanted a compact SUV. No, what I wanted was a teeny subcompact with spectacular gas mileage that also could haul books, which would have to be a TARDIS. Or so I thought.
Instead, I met the Honda Fit. Definitely a teeny car, with combined gas mileage of 32mpg (so far more like 40) and stripped down of all nonessentials to a nice low price. In fact, the new Honda Fit was on sale for $15,000, nearly four grand cheaper than the used CRVs.
But what about the boooooooooks? Turns out, the Honda Fit is a hatchback that does a neat little magic trick:
That's 57 cubic feet of hauling space. And, if I travel alone, I can also fold down the passenger seat for even more space. Even cooler: the back seat also folds UP, so I can fit tall things if necessary.
Still I was dithering. A car payment is a thin slice of hell, as I recalled from paying off Mulan. Of course, then I was a single mother who had just begun her writing career. I didn't have a partner to help pay the bills, I didn't have a (thin, anemic, trickling) second income from my fiction work, and Boy was still young enough to need after-school care and babysitting on a regular basis. (On the other hand, he wasn't drinking six gallons of milk a week, either.)
We talked it over endlessly, and I veered from "this is insanely stupid" to "this is the best idea ever." And then I sat down with Mephistopheles the Finance Guy, who informed me that the car payment would be about $75 more than I expected.
Jimmy pointed out that it was still significantly less than his car payment, and I pointed out that his car payment was strangling us. Jimmy reminded me that he's due for a raise early next year; I reminded him that I'm not, thanks to salary freezes at Ye Olde Newspaper.
In the end, what kicked it over was the warranty. By buying a new car, and kicking in the extra $16 for the extended warranty, I am covered bumper-to-bumper for seven years, or a year longer than the loan. As Jimmy pointed out, that is peace of mind that we have never had. When we really examine it, the biggest financial problem either of us has had in our single lives or that we have had together has been unexpected car repairs. Even now, we know we will have to scrounge up another $500 for Jimmy's catalytic converter before he can re-register his car.
The other point that Mephistopheles made: this particular dealer gives me a lot of bonuses I've never had. Not just the free car washes for life or two years of free maintenance, including tire rotations and oil changes. But if I go all seven years of the warranty without needing a major repair, I get the extra cash back as a bonus. That's $1,685 I'll get if the gamble doesn't pay off and the car needs no work for seven years.
And it comes in blue.
It was far too easy. Sign on a piece of paper, and bingo! You have doubled your personal debt. Fifteen minutes of signing my name on papers, and Honda Lady was handing me fancy electronic keys and showing me how the gizmos work. After Dad departed (with a biiiiiig thank-you and hug from me), I stood there with Honda Lady, kind of overwhelmed.
"Excited?" she asked.
"And terrified," I replied, grinning. "I never had a new car before. I really didn't think I ever would, not with my student loans."
And she hugged me.
So now I have a new car, and the ability to drive wherever I want, and we are guaranteed at least one of our cars will be working for seven years. Sure, I'll be paying it off after Boy goes to college. But it'll help my credit, it'll get me where I need to go, and a little magnetic skull sign would look awesome when we go to conventions, don't you think?
The boys love it - we've gone on a few little joyrides around town, and the sightseeing is awesome with that giant Popemobile windshield. Boy started calling it the Swag Wagon, since "swag" now means "cool" in teenspeak, and he is forbidden to drive it EVER. Best of all, since nothing was required in cash, we were able to make the last payment on Jimmy's car early and are now free of that.
Still terrified, since debt is bad. But the peace of mind is growing on me. And I can't recommend Honda Lady enough, since she was terrific to me even though the bad-credit klaxons should have been roaring over my head as soon as I walked in. If anyone local wants a referral, please let me know; I'd like to give her more business.
And Ariane? We're getting to know each other. I gave the name a test run this weekend and it suits her. People will think I named her after the heroine in Infinity, which was a car-related novella. But what only you loyal blog-readers get to know is that I named the Infinity character after my favorite perfume when I was a teenage girl, perfume they don't make anymore. I still have a little smidgeon left, and I plan to wear it at my wedding. And they said I can't be sentimental.
The stupidest financial decision I ever made was to get student loans. Young people, learn from me. Student loans of the modern era are not your parents' student loans, easily paid off five years after graduation. My student loans were bought and sold three times within six months of my graduation, all without my consent and folding the interest in as principal. Ah, the nineties. They ended up with Sallie Mae, which jacked the interest to the skies and demanded half my salary until I ended up borrowing even more money just to stave them off until I could make a deal with the U.S. Department of Education to consolidate them into an amount roughly three times what I originally borrowed. Since then, my loans have hovered over my head as an impossible debt that I cannot hope to pay off unless that Mega-Millions ticket pays off tomorrow or someone doubles my salary.
It also destroyed my credit, as did a number of medical bills that my insurance mangled over the years. I don't use credit cards; I cut them all up and paid them off beginning in the mid-nineties. I fell into a lapse of stupidity when I started touring and got a credit card because hotels were refusing to reserve rooms on debit cards; but having learned my lesson, I cut it up a few years ago and will have it paid off within the year.
Suffice to say, credit and I are not good companions. The only cars I've owned were used cars, bought for cash or via someone else's credit. My dad helped me buy Mulan the Toyota in 2004, because my toxic credit set off klaxons when we walked into dealerships. She was five years old and had 86,000 miles on her. I paid for the car, but it was Dad's good name that got it for me.
I paid off Mulan in 2009, and happily drove a debt-free car for the last four years. Mulan, who was named by Boy at the age of five, has been a trooper of a car. She has visited more states than most people, carrying me to conventions in Chicago, Kansas City, Indianapolis, Lexington, Atlanta, Nashville and more, besides wearing a track up and down I-55 to Memphis. She's hauled books across the Midwest and back, more books than a normal sedan really should be asked to carry. In all, I put nearly 200,000 miles on the old girl.
A few Christmases ago, Mulan's timing belt snapped. It was disheartening, but the first major repair for the car was not the worst thing in the world. I wrote Infinity to raise the money for the repair, which turned out to be one of my better novellas. Then right after we moved into the house, Mulan threw her transmission. That $1,700 debacle was a much larger problem. We sold everything we could think of, raised money with the only marketable skill I have (writing, you pervs, writing), and still had to borrow the rest.
If I'd known she'd only last another year and a half, I think I would have sadly bid her farewell then. But we had just moved into the house and we were flat broke. We'd had no time to prepare, all our tax-return money had gone into the move, and Jimmy was still paying off his car to the tune of $400 a month. Don't get me started.
Mulan trundled along for more than a year, but she's been showing her age. So it wasn't a complete shock when she busted another timing belt two weeks ago. It was, however, bad timing.
We had a plan. Once Jimmy's car was paid off, we would start setting aside money to buy a replacement for Mulan. Not a new car, or even a new-to-us car. A Craigslist junker for cash. Drive it into the ground, then get another one. Neither of us wanted a car payment. Unfortunately, Mulan didn't get her copy of the plan.
The Craigslist plan was out: Jimmy still had two payments left, we'd had no time to build up the cash. The repair would be $650, also beyond our capabilities unless we stiffed the rent or all our bills for a month. And I'm still working on the novella for the Kickstarter, so another crowdfunding project was out.
Enter Dad, who kindly offered to introduce me to his awesome Honda Lady. She handled internet sales at a local dealership, and had sold Dad his two Hondas, which he loves. I had frequently admired my stepmother's Honda CRV, and we thought that would be the perfect car: reliable, tough and can haul books. And maybe my credit had improved enough to get a high-mileage, used CRV with Dad as a co-sign.
So that was the new plan. Honda Lady was terrific. She had the CRVs I'd picked out on their website ready when we showed up for our appointment, and Dad and I went for a few test drives. (Wow, they are sure nicer at a dealership than they are at the bad-credit junker lots that Jimmy and I usually frequented. They didn't even photocopy my driver's license or ask for a blood sample.)
But the new plan had problems. The higher-mileage cars could not be financed for a long-term loan, because if it dies halfway through the loan term, I have a big problem and therefore so do they. Oddly enough, they could finance me with a better loan if I bought a new car.
I'd been looking at CRVs so that I could haul the booth around the country, not because I really wanted a compact SUV. No, what I wanted was a teeny subcompact with spectacular gas mileage that also could haul books, which would have to be a TARDIS. Or so I thought.
Instead, I met the Honda Fit. Definitely a teeny car, with combined gas mileage of 32mpg (so far more like 40) and stripped down of all nonessentials to a nice low price. In fact, the new Honda Fit was on sale for $15,000, nearly four grand cheaper than the used CRVs.
But what about the boooooooooks? Turns out, the Honda Fit is a hatchback that does a neat little magic trick:
 |
| Hello there, Literary Underworld (we have cookies) |
That's 57 cubic feet of hauling space. And, if I travel alone, I can also fold down the passenger seat for even more space. Even cooler: the back seat also folds UP, so I can fit tall things if necessary.
 |
| This is somebody else's picture, because I'm too lazy to go outside and fold up my seats just to show you. |
Still I was dithering. A car payment is a thin slice of hell, as I recalled from paying off Mulan. Of course, then I was a single mother who had just begun her writing career. I didn't have a partner to help pay the bills, I didn't have a (thin, anemic, trickling) second income from my fiction work, and Boy was still young enough to need after-school care and babysitting on a regular basis. (On the other hand, he wasn't drinking six gallons of milk a week, either.)
We talked it over endlessly, and I veered from "this is insanely stupid" to "this is the best idea ever." And then I sat down with Mephistopheles the Finance Guy, who informed me that the car payment would be about $75 more than I expected.
Jimmy pointed out that it was still significantly less than his car payment, and I pointed out that his car payment was strangling us. Jimmy reminded me that he's due for a raise early next year; I reminded him that I'm not, thanks to salary freezes at Ye Olde Newspaper.
In the end, what kicked it over was the warranty. By buying a new car, and kicking in the extra $16 for the extended warranty, I am covered bumper-to-bumper for seven years, or a year longer than the loan. As Jimmy pointed out, that is peace of mind that we have never had. When we really examine it, the biggest financial problem either of us has had in our single lives or that we have had together has been unexpected car repairs. Even now, we know we will have to scrounge up another $500 for Jimmy's catalytic converter before he can re-register his car.
The other point that Mephistopheles made: this particular dealer gives me a lot of bonuses I've never had. Not just the free car washes for life or two years of free maintenance, including tire rotations and oil changes. But if I go all seven years of the warranty without needing a major repair, I get the extra cash back as a bonus. That's $1,685 I'll get if the gamble doesn't pay off and the car needs no work for seven years.
And it comes in blue.
 |
| Shiny! |
It was far too easy. Sign on a piece of paper, and bingo! You have doubled your personal debt. Fifteen minutes of signing my name on papers, and Honda Lady was handing me fancy electronic keys and showing me how the gizmos work. After Dad departed (with a biiiiiig thank-you and hug from me), I stood there with Honda Lady, kind of overwhelmed.
"Excited?" she asked.
"And terrified," I replied, grinning. "I never had a new car before. I really didn't think I ever would, not with my student loans."
And she hugged me.
So now I have a new car, and the ability to drive wherever I want, and we are guaranteed at least one of our cars will be working for seven years. Sure, I'll be paying it off after Boy goes to college. But it'll help my credit, it'll get me where I need to go, and a little magnetic skull sign would look awesome when we go to conventions, don't you think?
The boys love it - we've gone on a few little joyrides around town, and the sightseeing is awesome with that giant Popemobile windshield. Boy started calling it the Swag Wagon, since "swag" now means "cool" in teenspeak, and he is forbidden to drive it EVER. Best of all, since nothing was required in cash, we were able to make the last payment on Jimmy's car early and are now free of that.
Still terrified, since debt is bad. But the peace of mind is growing on me. And I can't recommend Honda Lady enough, since she was terrific to me even though the bad-credit klaxons should have been roaring over my head as soon as I walked in. If anyone local wants a referral, please let me know; I'd like to give her more business.
And Ariane? We're getting to know each other. I gave the name a test run this weekend and it suits her. People will think I named her after the heroine in Infinity, which was a car-related novella. But what only you loyal blog-readers get to know is that I named the Infinity character after my favorite perfume when I was a teenage girl, perfume they don't make anymore. I still have a little smidgeon left, and I plan to wear it at my wedding. And they said I can't be sentimental.
Awesome. Happy for you. My car died today and got a quote of $900 to get it running again. It has around 150,000 miles on it and is probably worth about $2200 but this idea of making a car payment again makes me groan as well.
ReplyDeleteWow, that sucks. :( I suppose it comes down to what kind of car it is: my old Chevy or the Ford wouldn't be worth a $900 repair at 150K, because it wouldn't last very long. But a Honda or Toyota at that age has another 100K or more in it, so the $900 would be worth it. I do not envy the choice. :/
ReplyDeleteCongratulations on your new baby (You've seen that commercial on TV right?) I had a Honda once - I loved her but unfortunately my family outgrew her and we couldn't afford two cars at the time so she was traded in.... somewhere there is a Honda Accord with a lot of memories!
ReplyDelete