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Smart Shopper 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
You are in the Smart Shopper Forum. Your Hosts are kirstie_h & tidester
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No, you are not 'trying to do damage control'. You are wanting someone here to reinforce what you want - to buy another car, which will inflict more damage, by burying you further in this next car. Keep the car. With $5,000 negative equity plus the cost of another car, I don't see how you could reduce your payment amount. |
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You are alot more than $5,000 in the hole because the next 20 months will require at least 10 cents per mile driven in maintenance and repairs. Plus your payments and all the other associated costs [gas/insurance/tag/tax] The State of Texas uses 8 cents per mile for their fleet and Volvo might run 12-15 cents. |
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| I'm not trying to get anyone to "reinforce what I want"! I LOVE the Volvo and don't want to give it up. I am just seeing if there is a way to help the families monthly budget! What a nasty response from bolivar! | |
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| that his response describes 90% of people trading a car with a loan - being in the car business, I see it every day. | |
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Leasing isn't as great of an alternative as it used to be. Rebates and 0.0% financing have driven residual values down to the point where leasing is often just as expensive as purchasing the car. This is the case unless you are looking to lease a Honda, VW, etc which have retained high residual values. Do what you feel will be best for your personal financial situation but remember that whatever vehicle you choose you will be stuck with for years to come. Therefore, make sure it is something that you can live with and will have reasonable repair/maintenance costs. |
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20 payments of 456 equals 9120 (less than a payoff of 9244 which would not include 20 months interest.) 9244-5700 = 3544 upside down (a lot less than 5000). might be fuzzy math, but it looks like you would have to pay $350 a month for a $250 a month vehicle for 36 months. |
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First, keep in mind that the negative equity situation you are in is based upon a dealer's opinion. If you have only shopped one dealer, you may be surprised to find how wide of a range of estimates you will get for your car. If it is in great condition and is a popular color (red and white are near the top of the list) some dealers will pay more for it than others. Your $5K negative equity may suddenly become $3K or less at the right dealer. Second, the BEST way to get rid of a car (legally) is to sell it yourself. If you don't want to have strangers coming to your house, consider running it on ebay. I'm amazed at the range of cars that are selling on there for much more than they seem to bring in my local market. Also keep in mind that if you are exposing your vehicle to millions of people on ebay, rather than hundreds or thousands in your local paper or Auto Trader. If you go the online route, do your homework first. Investigate what cars like yours are bringing on ebay. Make sure your car is in great condition and spotlessly clean; I'm continually amazed at how a good looking car will bring more money than a similar car with a new engine or transmission that only looks fair. Take some excellent photos of your car in an attractive setting, such as an upscale resteraunt, large or historic building or an easily recognized landmark. Make sure the photos show your car inside and out, including the engine area. Do NOT use a Polaroid or any camera that takes poor photos. Shoot the car on a clear, sunny day and do NOT put the car in the shade when you take the photos. MOST importantly of all: shoot the car CLOSE. Fill up the viewfinder with the car; if the car looks like a speck in the photo, positive things like its' condition won't show up well. Write your narrative carefully, completely and accurately. For example, if you are in New Jersey and your car has heated seats but you overlook mentioning that in the narrative, it could cost you a sale. If it has all-wheel drive or traction control, that could also be a huge plus to a potential buyer in snow country. If you don't know what some options or features are called, use your owner's manual, a sales brochure or look at the wording used in other ads. Finally, be REASONABLE about your price. If a retail book says your car retails for $10,000, I've seen buyers think their car is worth that and not a penny less. But, if your car is high-mileage, not equipped properly or in sub-par condition, or in an area where that model isn't popular, then getting that price is more of a fairy tale than it is likely to be reality. As I mentioned earlier, investigate to see what cars like yours are actually selling for. All of the dealers in this forum will tell you that the retail books, no matter which one you use, are at best guidelines, and sometimes more like wishful thinking. Good luck! Joe |
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Okay, so I'm in a similar bind with our car ('02 Subaru Outback) - we bought it a bit over a year ago (new), rolled over our previous upside down loan so now we're even further in the hole. The payments are obscene - 560/mo - and as my husband is about to quit his job we are in a quandry over what to do. The things that are hitching our giddyup - the other car we have is a 98 Chevy s-10 that is totally paid off but only seats two and it seems like we need a 4-seater of some sort. Also, we love to take the car into the mountains - we live in Colorado - and for backpacking/skiing/etc. it's very practical and reliable. We have a couple options that I'd like advice on: a) trade-in to a dealer, take the hit on the neg. equity, and lease something for lower monthly payments (or buy a reliable (honda civic?) used car until my husband gets a new job) b) paydown the existing loan with savings money and then re-fi (or not - just suck it up and pay down the remainder on a month to month basis)? c) sell it ourselves - although this seems unlikely as the car is in the upper teens/low 20s value-wise and I for some reason have the impression that people don't like to buy high-dollar vehicles from individuals. d) suck it up and do nothing and keep paying it off month to month. Any thoughts or suggestions would be helpful. Thanks!
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you're in a position only cash can cure. There are only two real choices - drum up the cash and pay against the payoff (have it ready) after you sell it privately; or keep it and make the payments. There's really no other way around it. Not to be personal, but quitting the job may not be a great idea when you know you've got the bills to pay. Don't want to over-simplify. |
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I'll toss in my two cents as I think it can help a couple of people here. I purchased a Nissan Quest S this afternoon. I traded in a 2001 Malibu LS with 35,500 miles with 31 payments to go and a 1996 Explorer V8 with 146,500 miles and a huge dent in the tailgate (estimated damage of $1800). The Explorere was free and clear. The Kelly Blue book value was $6,625 for the Malibu and the Explorer was basically worth nothing to dealer. They offered me $8100 for the Malibu and $1500 for the Explorer plus discounted the minivan by $1900. (Yes, this dealership is looking to clear his lot by tomorrow.) I'm buying a friend of mine's car. We got lucky. I was able to roll that negative equity into a car that we really wanted and we had a delaership that was willing to worl with us because they wanted to move the cars off of their lots. It is possible to get rid of some of the negative equity. Not all of it but now I still have one car payment. It's a higher payment then the Malibu but we can afford it. And it is much better then having two car payments totaling over $750. And again, it's a car we are very happy with and had as our number one choice. This worked for my situation but i did a lot of research before I entered into this deal. I would also add what some others have said in different forums, "Do not buy a car because it has the bes or largest rebates". If that is the reason you are buying a car, you will be extremely disappointed. That is why I bought the Malibu over the Accord back in 2001 and I regretted it. good Luck and I hope this helps you. P.S. - jillia - I agree with driftracer. Now may not be the best time for your husband to quit his job. Personally, I did this for my family. Two kids and we do travel quite a bit on the weekends (both families are 2 hours away). The Explorer was damaged and with 146k miles on it, a major repair was just around at the corner. The Malibu was too small and neither of us was very excited about the car. |
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