Good to be Turned Down

Wendell and his wife have a low income, and they need another car with a new baby on the way. He talked to a bank about a car loan, but he was turned down. Now he isn't sure how he's going to get another vehicle.

QUESTION: Wendell in Kentucky and his wife have a low income, and they need another car with a new baby on the way. He talked to a bank about a car loan, but he was turned down. Now he isn’t sure how he’s going to get another vehicle.

ANSWER: If you are scratching and scraping to get by, you don’t need a car payment. That’s going to make things worse, so I’m glad you were turned down. A car payment is not going to do anything but sink you. It’s like standing in a boat and shooting holes in the bottom. It’s going to make a mess of your life.

I would start with thinking of ways that you can save up and get a second car, even if it’s a beater, just to get around. That, of course, has everything to do with your income. More than anything, you’ve got a career crisis. If you get the income changed and heading in the right direction, then you get to solve a lot of these other things pretty quickly.

But I think it’s a blessing that you got turned down for this loan, because the last thing you need with an income where you work for cash and she has a $13,000 income and you have a baby on the way is a car payment. That would just be a mess for you. I wish I had an easy answer for you; I just don’t.

The truthful answer is you have to find some ways to get your income up. You know that already. As the income comes in, you just set aside large chunks of it to pay cash for a car. If you can pay car payments, you can save a car payment. If the payment is $200 and you do that for five months, you have $1,000. That’s a little beater car to get you around.

Limp along until you get the income rolling again so you can move way up in car. But thank goodness you were turned down.