Dave Says: Bought a Car I Can’t Afford

Dear Dave,

I think I made a big mistake when I bought my car. I’m having a hard time affording the $500 a month payments because I only make minimum wage at my job and work 35 hours a week. My boyfriend, who was supposed to help me pay for it, has moved out and left me. I owe $20,000 on the car, but I know it’s still worth about $19,000. What can I do?

--Rachel

Dear Rachel,

Sell the car! You went car crazy and bought a vehicle that was WAY out of your league.

Right now, your entire financial world is wrapped up in paying for this thing and depending on a boyfriend to help make the payments was a mistake, too. When he left, so did the financial support.

At this point, all you need is enough credit to cover the hole that you dug. Go to your local bank or credit union and try to get a very small loan from them – about $3,000. If the car will sell for $19,000 then get it sold and use $1,000 to cover the difference. Then, take the remaining $2,000 and buy yourself a little junker. We’re not talking about anything cool, just basic, ugly transportation. Then, pick up a part-time job on the side and work like crazy for a few months to get that loan paid back as quickly as possible.

I’ve got a feeling this was a painful lesson for you, but there’s a good side to it all. If you do something stupid and determine never to do it again, it means you’ve learned a lesson that will last you for the rest of your life.

-Dave