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Owe more than it's worth... I'm upside down and I can't get up!

1160 messages,  Last post on Oct 22, 2009 at 7:11 PM

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What is this discussion about? Car Leasing

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#31 of 1160 grand by jratcliffe Jan 03, 2004 (1:29 pm)
No worries - weird things go on up there in the frozen north, I know. Landru, thanks for the clarification - I had never heard of Waiver of Depreciation, sounds like an interesting option...
#32 of 1160 Upside down Volvo owner by ptrekker Jan 06, 2004 (8:00 am)
Best option is to suck it up and keep paying for the Volvo. You have been paying it for years. In another 20 months, or in about spring of next year by my calculations, you will own a very nice car free and clear.   The other option would be refinancing which might be possible, but would ensure that you would remain upside down longer. Maybe stretch it out for another year with a better interest rate, but by then you are financing an 8 year old car.   Rolling 5k of negative equity into another car would be a bad, bad move. That means you would be paying 20k for a 15k car.
#33 of 1160 And that 20K by eharri3 Jan 06, 2004 (2:03 pm)
IS before you calculate the finance charges on the inflated price of the new car.
#34 of 1160 expanding on ptrekker's comment... by ms_mayor Jan 06, 2004 (3:14 pm)
ptrekker says rolling the neg. equity is like paying 20K for a 15K car...   Very true, and that 15K car will be worth even less once you drive it off the lot.
#35 of 1160 Negative equity by kyfdx HOST Jan 08, 2004 (8:28 am)
No one can make negative equity "go away". If you pay MSRP for a car that usually sells for $2K less than MSRP, and roll the amount into the loan, you'll soon find you are the same amount upside down.   In regards to the Volvo, you either paid too much, put down nothing, or just got unlucky and bought a quickly depreciating car. Whatever reason, the cheapest way out of your dilemma is to just keep paying on your current loan. Anything else you do will just compound the problem.   In regards to the Subaru: You aren't paying $560/mo. for the Subaru, you are probably paying $380/mo. plus another $180/mo. for the negative equity you rolled into the loan. Trading the car for another car will not fix that problem. To fix your problem, you have to pay off your debt. Keeping your current car is almost always cheaper than buying another one. Try to separate the payment from the car. They really don't have anything to do with each other. The large payment is a result of past mistakes. Learn from them, rather than compound them. For both of you, its better to just suck it up and make the payments.   I've been there, and it can be fixed, but it takes discipline and its not fun.   Good luck, kyfdx Replies to this message: sandymess (Feb 26, 2005 8:46 am)
#36 of 1160 Upside down Subaru owner by tblazer503 Jan 21, 2004 (2:56 am)
I gotta agree with the consensus... If you took out a 60 mo loan, guessing you made about 12 payments or so(said you had it just over a year), your total payments for 48 more months is about 26,880. The KBB private party value of an '02 Limited Outback 24k Excellent(no problems at all) is 20k. Which means taking out intrest, you are probably still at least 3-4k upside down. gas probably isn't killing ya on it, and I doubt insurance is... so it's difficult to justify trading it unless you can make a substantial difference on the payment while keeping your insurance/maintenance/gas bill at bay....
#38 of 1160 by kirstie_h HOST Feb 09, 2004 (11:32 am)
A midwestern newspaper is looking to talk with recent car buyers who had negative equity in their trade-ins. (In other words, your old car was worth less than the remaining loan balance.) Please respond with your daytime contact info to jfallonedmunds.com by 5pm Eastern Monday, Feb 9. Thanks! Jeannine Fallon PR Director Edmunds.com
#39 of 1160 My Two Cents by wsm6674 Feb 13, 2004 (1:47 pm)
Sorry about your difficult situation. My advice seems to be a bit out of step with what others have been saying, but is probably what your Parents (or Grandparents, depending on your age) would have to say:   Sell the Volvo for as much as you can get for it and buy a good-running, if not pretty or fast, used car you can keep for a few years. If you keep the used car cost down to $2,500 or so (which can be done) you'll need to come up with $6,000 to $8,000 in cash or loan. Pay off any loan as quickly as possible (at $500/month it would only be two years at most), then keep the used car another two or three years and save that $500 each month towards a better used car, or if you must, a new car that you will never be negative in.   That's my advice -- Scott
#40 of 1160 And pray by janz Feb 13, 2004 (3:06 pm)
that the $2,500 car lasts 5 years...

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