Need some financial advice - PeachParts Mercedes-Benz Forum

Ben300SD · #1 06-05-2003, 01:06 AM

I finally received my nomination, and assuming nothing goes wrong I will be leaving for the south Pacific on October 11 to do two years of service with the Peace Corps. I have one little hang-up, though, and it is my 1991 300D. I paid too much for the car two years ago when I purchased it ($13000, gasp). I am embarrassed to admit it, but I still owe about $7500 on it.

I need to sell this car before I leave, as I can't make payments on it since I will have a negligible income. The car sellers' market is crap right now. Blue book retail on my car in excellent condition is about $9800. My car's A/C compressor is broken, it will need a new parking brake cable shortly, and the hood has some slight damage from some dip***** that backed into it while it was parallel parked several weeks ago. Basically, I doubt I will be able to get $7500 for it in its current condition, and I don't have money to throw into it.

I asked my Peace Corps recruiter if the government offered any sort of help for this situation, but he was at a loss to provide me with any direction. I HAVE to pay off the $7500 loan before October 11, and I have no idea how I'm going to do it. Selling the 76 300D is not an option, as it will be used while I am absent. The money from the sale of the motorcycle will pay off a student loan that I have. Any suggestions or ideas on how to get rid of this thing for $7500, or how I can negate the situation?

CJ · #2 06-05-2003, 06:53 AM

Did you try puttiong an ad in the paper or even on mercedesshop.com??

Chris Blanchard · #3 06-05-2003, 08:56 AM

I think you will have trouble getting $7500 for it, unfortunately. I just bought a 92 300D w/147k for $7k. Everything on this car works, has full dealer records, even a new windshield, brakes, injectors, alternator, and battery.

If _I_ were looking at your car, my "number" would be more like $5000-5500, due to the miles, AC problems, and hood damage.

Where did you get your "blue book" number? I hope you are not seeing the full retail figures and thinking you can get that, as there's no way someone (knowledgeable) would pay that in a private transaction (and let's face it, a diesel with 200k miles on it will probably not be sold to a diesel or benz "rookie").

I'm not trying to be discouraging, rather I want you to be realistic about your situation so you can have reasonable expectations for how this can play out. Look on the bright side, you're going to the SOUTH PACIFIC FOR TWO ENTIRE YEARS. That will be an extremely memorable trip for the rest of your life and getting hosed in a car transaction will be forgotten in a few years!

Chris Blanchard

TX76513 · #4 06-05-2003, 09:16 AM

I need to sell this car before I leave,
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If this is the bottom line - you may have a problem getting out from under a car that you are backwards on. If you have a place that the car could be properly stored (mechanically put in mothballs), there are some options financially you could consider (and your banker). ABL's or assett based loans or on the consumer side maybe called "lease back". Esentially you lease the car to yourself and set the monthly payment with a balloon at the end of term - what you are doing is paying the interest only and pay the principal off at the end of the agreed term. Primarily this option is determined by your own personal credit score and a friendly banker helps. -- If all is bleak come October do a VSV (voluntary surrender of vehicle) as opposed to default. When you return from SP it's very easy to write all the credit bureau's and ask comment be entered to explain the Peace Corp (which is a very impressionable thing to do). Most lenders would probably overlook that entry. My .02 cents JK

blackmercedes · #5 06-05-2003, 10:21 AM

Quote:

Originally posted by Ben300SD
I finally received my nomination, and assuming nothing goes wrong I will be leaving for the south Pacific on October 11 to do two years of service with the Peace Corps...

First Ben, let me say congratulations to you for being so giving of yourself. In the days of self-absorbed culture, you are becoming a rare bird. I am glad to hear that you have chosen this path. Your family should be proud.

Now, to your problem. I don't have much to add, other than you should sell the car for what you can get out of it. It can take time to find the right buyer, and time is something you lack. First, go to some used car lots and see what they'll give you "cash on the spot." This let's you know the liquidation wholesale value of the car, and ensures you don't undersell to a private party during negotiations.

Next, advertise the car everywhere you can afford. You probably have a free "Recycler" or "Bargain Finder" publication, and use those. Price the car properly, or you'll get little play.

Suppose you sell the car for less than the outstanding loan. You should talk to your bank about your particular situation, and see if there's some creative financing they can help with. The problem will be that the remaining balance is unsecured, but talk to them.

I have some other advice: don't be embarrassed to say you paid lots for a car. We're car nuts. We get it. Most of us have had the difficulty of falling for a car too, ya know.

Lastly, what about family? No BS, if you were my son and I had to refinance my house to help you out of a financial jackpot so that you could do what you're doing, I wouldn't have to think twice about it. Not for a second. The dollar amounts aren't high, thankfully.

#6 06-06-2003, 12:50 AM

Do you trust anyone well enough that, if they need a car, they could use the car while you're away while also making the payments?

If you do something like that, get any agreement in writing. No exceptions.

Just a thought.