Truck payments are ‘swallowing’ 21-year-old in debt – but an expert said two options will help him ‘breathe again’
Almost all 18-year-olds have made poor financial choices, but one guy has disclosed that his choices have kept him in debt for years.
Nolan, a 21-year-old from Orlando, Florida, said that after living paycheck to paycheck for so long, he feels hopeless.
He said, “I feel like I’m swallowed in the truck payments, I can’t breathe,” to Jade Warshaw and George Kamel, co-hosts of The Ramsey Show.
“I want to be able to rent an apartment and then get to the buying a house stage and I feel like I’m running out of time, and I have so much debt and not enoughmoney,” Nolan said.
He started having financial issues when he was eighteen and had to pay $679.83 a month for a truck, plus insurance.
With more than 40 months remaining in the 75-month plan, he still owes a staggering $30,000 for the truck, but the worst part is that it’s only worth $20,000.
READ MORE ON DEBT
George responded to Nolan’s predicament by saying, “A guy making $30,000 should not bedriving a truck worth $20,000, you know that now.”
The financial expert went on to say, “The goal is to get rid of it, not to pay this thing off.”
George offered Nolan two choices to accomplish this: either visit the credit union or save the $10,000 he’s “upside down on.”
“You get a loan for $15k, you have the difference in the $10k, that means you can get rid of the truck and sell it, then you have $5k extra to get yourself a little beater car,” George said.
Jade went on to say that while they would typically never advise someone to take on more debt in an attempt to address a financial issue, Nolan’s case is an uncommon exception.
“It’s better to be in $15,000 of debt than $30,000 of debt,” she stated.
“Ultimately, although it seems like we’re getting a loan we are still lowering the debt substantially,” she said.
Man ‘missed being in debt’ after selling beloved Corvette – but little-known equation helped get it back with no payments
The financial experts also advised Nolan, a self-employed carpenter, to attempt to increase his pay.
He clarified that although he typically works 40–60 hours a week, he only earns about $600.
“What you’re doing is not bring in the right amount of money, so you might need to change what you’re doing,” Jade responded.
“Or, you don’t have the right price set and you’re not charging enough.”
Other listeners gave their suggestions when he shared his financial issue on the call-in show.
Someone said: “Bro needs to focus on himself and an actual job, those random sidejobsaren’t really cutting it, or sell the truck and get a beater.”
Read More on The US Sun
Another concurred: “The gig isn’t paying the bills, so he needs a steady job.” Don’t borrow any more.
A third, meantime, remarked: “Why do impoverished people like brand-new, high-end cars? I acquired a 20-year-old automobile when I was broke.
Financing for vehicles
Personal auto loans, Hire Purchase (HP), and Personal Contract Hires (PCH) are the three primary forms of auto financing.
A car loan is one of the easiest ways to finance your new vehicle.
In order to purchase the motor, money must be borrowed.
You must determine the amount you require from the lender, which could be a bank or a building society, as well as the duration of the loan.
However, you can drive as far as you like with a personal auto loan, and you are not required to have any interior damage repaired unless you so choose.
A convenient way to spread expenses over monthly installments until you eventually own the car is through hire purchase.
Since you’re making consistent payments to eventually purchase the car, HP repayments may be a little higher than with other choices.
On the plus side, though, you won’t be penalized if your credit history isn’t stellar.
Because HP finance is backed by the car’s worth, the finance company may take the car back if you can’t make your monthly payments.
The third excellent choice is PCP financing, which means that the car will belong to the financial company during the term of the agreement rather than you.
Over the predetermined period, you will be required to make regular installment payments and provide a deposit.
You can easily return your motor or swap it in part for a new one if you decide it’s time to part with it.
Note: Every piece of content is rigorously reviewed by our team of experienced writers and editors to ensure its accuracy. Our writers use credible sources and adhere to strict fact-checking protocols to verify all claims and data before publication. If an error is identified, we promptly correct it and strive for transparency in all updates, feel free to reach out to us via email. We appreciate your trust and support!