The $9,600 Question

Okay hotshot, pop quiz. If you had to pony up $9,600, would you want something to show for it or be empty handed?

That’s exactly what I thought. But that’s the situation we found ourselves in today after getting an appraisal from Carmax for the leased Kia Optima, the car that I said we would probably get rid of since we can no longer afford it with my unemployment benefits being exhausted.

By the way…fuck you, Congress!

Ahem. Anyway, the Carmax appraisal for x-thousand dollars left us with a deficiency of $9,600 which means that if we sold them the car for what they offered, we would be responsible for the $9,600 remaining. It would be the same situation if we sold it to a private party. The salesman told us that the best way to pay it off would be to get a loan through our financial institution.

Here’s the problem with a loan.

I haven’t started my new job yet, so I have no source of income and Ann’s alone wouldn’t suffice. Taking those facts into consideration, a personal loan was not in the cards. Additionally, there would be interest tacked onto that loan so it would probably be hundreds if not thousands more. No loan.

Our other option would be to file for Chapter 7 bankruptcy. The problem we had with this one was, well, BANKRUPTCY. It just looks ugly and stays on your record for quite some time and while we’d be able to keep the car and pay it according to the terms of the filing, BANKRUPTCY. It makes more sense than selling it and paying the deficiency, but we don’t need to get lawyers involved in our lives when it’s only a car we’re dealing with here. It’s not like we’re losing the house.

The least appealing option was to have it voluntarily repossessed which also involves legal action and fees, and the lienholders – in this case, Kia – are always quick to demand the deficiency. I haven’t been entirely successful at pulling money out of my arse in the past so I don’t think reaching up there for an extra $10,000 right now would do any good.

And oh, by the way. We’ve made numerous calls to Kia to see if they could help us and up until today, they’ve been fiendishly avoiding lending us a hand. The only reason I got a response today was because I’ve been tweeting my disgust about how they are handling the situation and trust me, nobody likes 140 characters against them. Social media works, people.

Except for Toys R Us. They r kind of dicks and never respond.

Also worth noting. In past situations where we were strapped for cash due to unemployment or other reasons, every other lienholder worked with us. Ford, Nissan, and Toyota were all stellar in helping us.

Kia? You can’t squeeze a dime out of those cheap bastards.

Anyway, none of these were very appealing options, and the problem was that we were trying to get rid of the car as soon as possible so we had no idea what we were getting ourselves into. We didn’t really think of much outside of letting it be someone else’s problem and ridding ourselves of it, not taking into consideration what it would actually cost us in the process.

Then I crunched some numbers and felt a little better about things. Here’s what I came up with.

No matter how we got rid of the car, we’d be responsible for the remaining balance of $9,600 if we sold it at the Carmax appraisal price, and some of those options would see us either in front of a judge or paying interest, neither of which I wanted us to do.

I figured out that we have 24 months left in the lease. At our current payment of $400, guess what? The balance we have to pay is $9,600 over those 24 months. It’s the same damn thing.

So here’s how it’s going to work. We’ll have to come up with next month’s payment somehow even if it means borrowing it (note: I accept PayPal). That will carry us into March, at which point we will get our taxes done. We’ve managed to get decent refunds in the past (kids do that to you) and since not a lot changes with our situation, chances are we’ll get another bonanza this year.

Taking some of that money, we could continue making payments on the lease while I start working and getting some regular income (including working other odd jobs on the side). Once I’ve got a regular paycheck, we can start to pay back the money we borrowed and saving for more car payments.

This fantastic plan will help us avoid everything: bankruptcy, lawyers, repossession, listing the car on Craigslist, etc. In addition, we get to keep the car and when the lease is up, we give it back to Kia and walk away or finance the remaining balance.

Keeping the car for the time being is a better idea because we have something. If we gave it up, our credit would take a hit and ruin our chances of getting something else down the road. In keeping it, we get little gold stars next to our credit rating and have something to show for the $9,600 we’ll be paying for the next 24 months, regardless if we intend to keep it after the lease is up.

But once the lease is up, we may just walk away from it. You see, Kia has been such a pain to deal with that I no longer want to put up with them as a corporation or as a dealership. And leasing? No way. I’ll never lease another car again. It’s just not worth all this hassle.

As for The $9,600 Question, why pay for nothing? Might as well make it work and have something to show for it, right?