Emma, my Chevy pickup, is 21 years old now.  It’s time to give her a happy retirement in the country with her first owner and her primary mechanic for the last several years.  We knew that time was coming and after much longer we would end up walking.  My mom’s long-time boyfriend has offered me a good price for Emma, and has also brought my attention to a very well cared for Jeep that has just come up for sale.  His family was looking to sell the 2005 Jeep Liberty Sport, and knew that I was looking for a reliable vehicle to replace my truck.

Retirement

The whole process was actually terrifying due to our already tight budget.  At first, my boyfriend and I had tried to take money from our retirement savings to each pay part of the cost to buy the Jeep right out.  Turns out our retirement policies are 403(b) and you can’t take money out unless it’s a medical or housing emergency, or if you quit working for the company.  We’ll be fine if either of those things happen, but not if we need reliable transportation for two working adults.  I was clued into an assistance fund through work, but that was similarly only available for medical and housing emergencies or unanticipated missed wages due to unforeseen disaster.  Also good to know that sort of assistance is available, but not going to help with the vehicle.

Bad Idea

We all knew I wouldn’t get another offer nearly this good if I didn’t snatch it up. My mom offered to pay the difference on the condition that I do everything in my power to pay her back, which didn’t include a set monthly payment.  My boyfriend put his foot down.  He didn’t want to see me killing myself over a night job and diet of beans and rice.  That had every possibility of building resentment for everyone involved.  Never get into a loan situation from a friend or family member.  It’s just bad.

A Loan

When all those options were exhausted, we decided to try to get auto loans.  My bank didn’t offer auto loans for private sellers, only dealerships, so I looked to Wells Fargo.  I put in an application and waited to hear back, but everyone told me that A+ Credit Union would have better rates.  I didn’t return the calls from Wells Fargo, because I wanted to know what I could get from A+, but they never called or even gave me a reference number for my application.  While I waited, the owner started getting antsy and needed to know for sure I was going to be able to do this.

Join the Club

I decided to look into Lending Club.  I like the business model.  I put in my information and based on what they already knew about me, they had a selection of offers for me.  I took a higher amount than was necessary for the Jeep, because we still had a number of other costs surrounding the transaction.  The only thing left to do was prove the information I gave them about my income with a W2 and last 2 paystubs.  The paystubs were easy enough to get, but the new W2 hadn’t come out yet, so I was worried they would see my 2014 income and think “No, you definitely can’t afford this.”  I submitted the documents and they put it into final review.

The Waiting Game

The next day, I was asked if I’d heard anything about the loan.  I planned to call them after work, but I found their FAQ section that said it could take 7 days for the final review and then up to 4 days for the amount to be direct deposited to the bank.  I ended up finding out the next business day after the holiday.  Approved!  I could give the owner a definite answer.  I would still have to wait for the deposit to pay him for the Jeep, but I knew for sure I would be able to.  (Sidenote: the day I found out the loan was approved, I also received a letter in the mail from A+ turning me down)

Planning

Finding out for sure we would have the money was one thing, but then we needed a plan on how we would pay it back.  The reason we didn’t want to take out a loan was because our budget left no room for repayment.  We did, however, have one last payment to make on our new bed to get rid of that monthly expense.  If we used the remainder of the loan for that, we could immediately have at least half the monthly payment taken care of by our usual budget.  There was enough left after that to give us a monthly cushion to put towards it, so it would leave us with $27 each to come up with from our personal income each month to make the payments.  Basically, one restaurant meal each. Not bad.  This will actually work.

Fear and Doubt

I was pressured by everyone to increase my insurance, which made sense, because I’d hate to be utterly screwed if anything happened to the Jeep while I was still paying the loan.  For auto loans, you are required to have full coverage, but Lending Club treats it as a personal loan (interest comparable to a credit card, but no insurance requirements).  I’ve been very fortunate so far *knock on wood* not to call upon my insurance in the 16 years I’ve been driving, but I started to have fears and doubts about all the bad things that could happen on the road.  I went to my insurance provider’s website to get a quote on the additional coverage.  It was going to throttle me, but then I looked to see what other expenses, beyond the bed, that I could eliminate to help with the loan payments.  One that I’m very eager to drop is CareCredit.  My minimum payment is $49 on a $668 balance.  That’s as much as almost $2000 debt on any credit card.  So I worked out a new budget that got rid of some of the monthly cushion, but would give me back that monthly expense.

The Other Side

In addition to the CareCredit debt being paid off, I am indeed getting a raise this year.  Between those two things, I would be able to pay the loan payments, the increase to full coverage, and have a little bit left compared to my normal budget.  We’re going to be okay!  It was a little scary for a while there, but we’ll be okay.  This tale did not include the woes of redoing the budget several times to work out comfortable payments for my boyfriend (who would be coming up with car insurance that he previously did not have, in addition to the new loan payments) and redoing the budget again after remembering other expenses that would devour a large chunk of the cushion that was meant to help ease the strain of the monthly payments, or the sheer frustration of trying to communicate vocally, one word at a time, when understanding required a visual representation of the entire plan.  I honestly thought it was all going to fall apart over a couple hundred dollars, but between Notepad and Calculator, I plotted it out to be beneficial for everyone.  This will work.  We are getting a Jeep.

Now we just need to think of an appropriately nerdy name. 🙂