Best way to make sure I have a reliable vehicle

[sean]

One of my biggest concerns in the decision whether or not to file is being able to have reliable transportation for our family. We have 5 kids, so our options are more limited and more expensive.
Right now, we have a 3 year old vehicle that comfortably fits our family, but it is worth about 15k and we own it outright. In NC, the vehicle exemption is $3500. I thought about trying to finance a car before filing, so we would have a car payment, but no equity, so it would be exempt. But I'm already maxed and have some late payments on CC's, so I wasn't able to get approved for a loan.

I'm now thinking that the best thing to do would be sell the car now and buy something that is under the exemption limit. If we do that, I'm not sure what to do with the extra cash though.

Any suggestions or advice is greatly appreciated.

[debtmonster]

Any suggestions or advice is greatly appreciated.

1. Go to www.Autotrader.com
2. Put in your zipcode.
3. Hit Next.
4. Change the search area to 300 or 500 miles (whatever is the furthest you are willing to travel to get a great deal on a car - 500 is the best)
5. Click "Body Style" button to select a body style and check the vehicles that would be suitable for your family.
6. Change the year range to something like 1999, 2000, 2001 or whatever you're comfortable with.
7. For maximum price range put in $3500-3800 (maybe you can get them to come down a few hundred from a $3800 vehicle)
8. Click the "View More Search Criterial" link.
9. Change the mileage to be under 45,000 or 60,000 for a reliable car.
10. Scroll down and check the "Sort by" drop down and change it to say "Price - low to high"
11. Click "Search"

Skip anything that says "1" for mileage. That means it's well over 100,000 miles and the people lied and put that number in there to get in the search.
Skip anything that's been wrecked or has a salvage title or is a car for export.
Skip most of the adds from dealers where it says something like "$2500 down". Sometimes a dealer will sneak those in there.

In my case I see more than 6 pages of cars. There's a lot of low-mileage great deals out there if you have the cash or existing financing for a $3500 car.

The only thing with many of the cars is when they are getting close to 60,000 miles, they are due for a timing belt change which can be several hundred dollars to get serviced. Many cars with timing chains would be great if you can find them. Maybe something like the Saturn Ion's, Saturn Vue's (4-cylinder), Chevy Cavaliers or maybe some Pontiacs may have an Ecotec engine that has a chain that should last a long time. The Ecotec engine requires very little maintenance.

[StartingOver08]

Do you owe on your taxes?
Do you have resources to pay your attorney?
How about living expenses, for example, stocking up on food and household supplies.

These are just the three areas that come to mind after you sell your vehicle and have the proceeds to purchase a 'new' vehicle and left over funds.

You do need to make sure you keep a record of the transaction as the Trustee will be very interested in knowing what you sold and what you did with the money. Make sure to sell it for fair market value and not to a relative or friend, because the Trustee can undo the transaction.

[debtmonster]

Make sure to sell it for fair market value and not to a relative or friend, because the Trustee can undo the transaction.

How can people sell things at "fair market value" when nobody wants to pay that?

I've been forced to sell things for 10 cents on the dollar. Our big screen TV was $3200 back in 2006. You can buy the same thing now for $899. That makes this TV worth about $200-250. So if we were to sell the TV for $200, are we gonna get ragged on for not selling a $3200 TV for $1500?!?!
To me, that would be fair market value. But now that newer technology has replaced it, this TV is worthless to be sold to anyone.

Same thing for cars or anything else. Nobody is buying anything anymore. People are tighter than ever.

[StartingOver08]

Well - I agree that you can not get NADA or KBB for these cars. What I mean is you show it advertised, you show whatever offers you received, you have a papertrail for the sale, and you do not sell it to friends or family.

You can then show that fair market value is what you got - not NADA or KBB value.

You have to have your transaction properly documented to not have a problem with the Trustee.

[debtmonster]

Yeah, I would think you'd have to sell the vehicle for whatever the best offer is. Any time I ever traded a car in, the dealer NEVER gave me what KBB's trade-in was. It was always less.

Go to Carmax and see what they offer. What a HUGE joke there.

[sean]

The problem is that we need seating for 7 and finding a decent minivan in that price range is a lot more difficult than finding a small sedan. That's why I was wondering if anyone had any ideas on how to end up with a vehicle worth more than the $3500 exemption.

But I appreciate the help. That's a good site and I guess if we need to go with something like a 10 year old van, than that's what we have to do. I just wish there was a way to keep a more expensive car. It seems like in the long run, with maintenance and repair costs, we'd be better off with a 10k vehicle than a 3k vehicle.

[debtmonster]

What did people do who needed seating for 7 before mini-vans came available?

I member my uncle having an old Dodge van with 3 seats in the back.

The thing is with those 10 year old vehicles with 100k+ miles, you can easily spend thousands more in repairs. They simply aren't worth it since 90% of the people out there don't care enough about a vehicle to take good care of it.

I know you can get a Honda Pilot or Saturn Outlook with 3rd road seating. They want BIG BUCKS for those cars when you compare the price to $3500. That's virtually impossible without some old junker that you'll spend thousands on repairs.

[freshstartfl]

This might be a completely stupid question, but since it's him and his wife, and I assume they're both filing, don't they get double the exemption? Or at the very least, wouldn't they get to keep two cars if each is worth less than $3500?

[sean]

This might be a completely stupid question, but since it's him and his wife, and I assume they're both filing, don't they get double the exemption? Or at the very least, wouldn't they get to keep two cars if each is worth less than $3500?

I'm still waiting for an answer to that one. I'm assuming that we would each get to keep a vehicle worth up to $3500 and for me, that's not a problem because I just need something to commute to work and back.

The problem is finding a decent, reliable vehicle that my wife and I can haul 5 kids around in. Honestly, the prospect of losing our 05 Honda Pilot is the biggest obstacle in convincing my wife that filing is our best option at this point.

[debtmonster]

The problem is finding a decent, reliable vehicle that my wife and I can haul 5 kids around in. Honestly, the prospect of losing our 05 Honda Pilot is the biggest obstacle in convincing my wife that filing is our best option at this point.

That Pilot is an outstanding vehicle. If I had 5 kids, I would do anything I could to keep it. The motor in it is strong and reliable. After my bankruptcy, I was looking to buy a Pilot. I found many good deals...

2005 Honda Pilot 68,000 miles for $10,777

2006 Honda Pilot EX with 53,000 miles $14,700

Those are the kinds of vehicles I would love to buy used. I don't need 3rd row seating, but I would love to have it in case we had a family gathering.

[sean]

I know. It's a great car and one that we probably won't have to put much money into for the next 5 years. But what can I do to try to keep it? The value is way over the exemption amount.

[Over our heads]

What did people do who needed seating for 7 before mini-vans came available?

I member my uncle having an old Dodge van with 3 seats in the back.
.

There were the larger conversion vans, and real station wagons with a flip up seat in the back end. And, most of us didn't wear seat belts in the old days, so a bench seat w/ 3 belts was holding 3-5 kids! That's not a console, it's an extra seat! That hump in the middle isn't for looks, it's fer yer butt!

But seriously I wish I had even the slightest bit of advice, but I am stumped. We have an uplander, and luckily are just a tad upside down in it. My hub's car is paid but we can skate it under the exemptions. Good luck to you!

And, just an fyi, Uplanders have one of the worst resale/trade in values, and are on the small side, maybe one of those might do you well if you can't figure a way to keep your own?

[sean]

Yeah, it sounds odd to say it, but I really wish we still owed 15k on the car and had no equity. At least then we could just continue making the payments and keep the car.

I'm almost tempted to sell it, use the 15k to pay off a bunch of credit cards, wait for them to update on the credit reports, then try to get a loan to buy another Pilot or similar vehicle. But I doubt that paying off 15k of our debt would improve the credit rating enough to qualify for a loan. Our total unsecured debt is around 85k.

[ansky0007]

Unfortunately there is no way out of this situation and no if you are married you cant double the car exemption.

If you want to keep the vehicle the only thing you can do is find the fair trade in value and offer to pay the trustee the difference between the $3500 and the fair value.