Home > Auto Loans > We Bought a Car & My Wife Lost Her Job. Now What?

Comments 0 Comments

A reader reached out to us recently with a question that is the stuff of nightmares:

I bought my car last Wednesday brand new. I find out today my wife was getting furloughed and we won’t be able to afford the note, what options do I have?

When your financial resources change for the worse, buyer’s remorse is just about a given. Heaven knows you would not have made the same decision if only you had known what was about to happen. If you signed the contract though, you’re legally on the hook.

But that may not mean our reader is out of luck. If, by chance, he bought the car at Carmax, he almost certainly can return it. “There is no ‘cooling off’ period when you buy a new car,” explains Philip Reed, senior consumer advice editor for Edmunds.com. “This means that, unless you purchased the car from Carmax, which has a stated return policy, you are legally required to make all the payments in your contract.”

However, dealerships can unwind a deal, and it’s not unheard of. “It is completely up to their discretion,” Reed said. Still, a car that has been driven, if only for a few days, is no longer a “new” car, and has probably lost value. And if our reader had a trade-in, it may also be gone.

Unfortunately, a furlough just after you’ve taken on a new debt falls into the category of life throwing you a curveball. It’s a lousy break, but it happens. It’s not unlike having a piece of gravel hit your windshield, and wishing you’d left home a little earlier or later. You couldn’t have known, but you’re stuck having to deal with it. The best you can do is to assess your financial situation as well as you can when you prepare to make a big purchase. So, as you’re checking your credit score and your financing options, also take a look at how much wiggle room there is in your budget, especially if you have reason to believe your income might drop. If there are clues your job may not be secure, of course, you may want to hold off (or look for a cheaper option) on a big purchase.

An emergency fund can help, but if you don’t already have one, that information is not useful now. If the dealership will unwind the deal, that is the easiest solution. If not, then you have to decide whether to try to sell the new car (and almost certainly end up owing money but saving on insurance and car payments) or figure out how to make it work. Even so-called “voluntary repossession” can damage your credit, so that is not a good option either. (Checking your credit scores can help you keep tabs on how certain financial events affect your standing — you can check your scores for free many ways, including through Credit.com.)

Even though financial resources are limited now, it may be useful to try to make an educated guess at how long this is likely to last. If it is a time-limited cash crunch, and the dealership won’t unwind the deal, your best bet may be to make those painfully high payments for a few months until the employment situation changes.

More on Auto Loans:

Image: iStock

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Our Owners

Credit.com is owned by Progrexion Holdings Inc. which is the owner and administrator of a number of business related to credit and credit repair, including CreditRepair.com, and eFolks. In addition, Progrexion also provides services to Lexington Law Firm as a third party provider. Despite being owned by Progrexion, it is not the role of the Credit.com editorial team to advocate the use of the company’s other services. In articles, reporters may mention credit repair as an option, for example, but we’ll also be sure to note the various alternatives to that service. Furthermore, you may see ads for credit repair services on Credit.com, but the editorial team isn’t responsible for the creation or implementation of those ads, anymore than reporters for the New York Times or Washington Post are responsible for the ads on their sites.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team