The first time I took on debt was the spring when I graduated from high school. When I was a senior in high school, I was not 100% sure what I wanted to do with my life. I knew that I would ultimately attend college, but I was not mature enough yet at the age of 18.
After talking about it with my parents, we decided that I was going to work for a year or two before I went to school. They were not thrilled with the plan, but also did not want me to just go to college without a solid direction. Looking back, I still think that was a good idea.
Since I was going to get a job, I needed a means of transportation. I grew up in a part of Pennsylvania where public transportation was limited. To get to work, I needed a car.
I decided that I wanted a Jeep Wrangler. I started shopping by looking at the classified ads in the newspaper. After looking for about one week, I spotted a 1991 Jeep Wrangler with a hard top. My dad and I took a ride down to this local used car lot to test drive it.
The Jeep was nice, but when we were at the lot, a different car caught my eye. The other car was a 1986 Audi 5000 CS Turbo. The salesman called it a 4-door Porsche. We test drove the car and we really liked it. It was a solid driving car.
At the time, I had zero credit. My dad agreed to co-sign for the loan. He had one condition, he said if I missed a payment, he would sell the car. I agreed to his terms and bought the car.
The car had less than 60K miles and only cost $6,500. The loan payments were around $165 per month. Because that it was a turbo, the insurance was higher than the car payment.
I had the car for about 2 months before the trouble began. There were many issues, but the major issue was that if I was not driving with my foot on the throttle it would stall and not start back up. When I was at a red light, I had to slip the car into neutral, put my left foot on the brake, and keep my right foot on the gas pedal. Yes, very dangerous.
I took the car to a few different local mechanics and they did not know how to fix it. I took it to a mechanic that specialized in European auto repairs. He was not able to pinpoint the issue.
After I owned the car for about 4 months, I had to sell it. My Mother was driving it on a major interstate highway when it stalled and would not start back up. She was lucky to not have been injured or even killed. The state police came and they called a flatbed to tow it away. The car was simply not safe and had to be sold.
I took it to a dealer to find out what it was worth on a trade-in. The dealer offered me $2,500. I owed over $6000. I did not want to lose $3,500. At that time, $3,500 was a fortune because I was broke.
On my way home from the dealer, the car stalled at a major intersection. I tried to start it for 15 minutes, but it would not restart. This time the state police were not needed, but a flatbed was.
The car had to go. I spoke to the owner of the car lot who offered me $2,500. We worked out a trade for a 1986 Honda Accord with a bent frame and 115,000 miles. The salesman told me to be careful with the car because it had a bent frame that causes it to drift to the right.
This whole situation truly had me upset. I was not upset about losing the Audi. What had me worried was the amount of Debt that I now had. Plus, I felt that I had very little to show for it.
For the next four years, I had to make monthly payments on a $6,500 loan, but drive a $2,500 car. This experience left a bad taste in my mouth when it came to debt. I never missed a payment and paid the loan off. I told myself that I would never get another car loan again.
The Honda lasted about 8 years. My next few cars were hand-me-downs with well over 100K miles on them. I received one from my parents and one from my wife.
I did not buy another car until I was 35 years old. This time I did my due diligence and did some research before making the purchase. That car was certified used Subaru with a 100K mile warranty. I also paid cash.
Have you ever had a negative experience with debt? If you have, please share your experience and what you learned from it.