I'm upside down with my car for $7000 what to do....????

Question

I bought a brand new car a year ago. My car payment is almost $500. I will like to trade in for another car that worth this payment but my payoff is $20,000 and the trade in value is $13,000. So I'm upside down for $7000. This amount I will need to include it in my other loan, but again, I don't wanto to buy a car that I don't like. I want to buy the car that I like. Do you know someone can help me out with this? I live in Florida. What I need to do to have this problem fixed?

Answer 1

Trade in value from a dealer is not the same as loan value or resale value. What is the loan value?

You could sell your car privately for loan value if it is in good shape and/or it is a popular make and model. If you take the trade value, and you have good credit, you can make the trade into a vehicle that you want but your payments will be even higher. At some point in time you will have to plan on keeping a vehicle long enough to ride out negative equity.

The way to soften the blow is to look for new car deals offering heavy rebates or low interest loans. Car manufacturers are motivated to sell new cars these days.

We were into a vehicle for 20000 with a 13000 trade in value. We lost confidence in that vehicle. Our interest was high and the payments were 550. We traded into a vehicle we wanted, one that holds good resale value over time and was able to finance 32000 for 605. Absorbed the trade-in with rebates, was able to find a much lower interest rate. We know we have to ride it out but we have much more confidence in this vehicle over the long term.

Answer 2

Only time and money can fix the problem. If a lender carried over the $7,000 into a new loan, you would then be $14,000 upside down. And here is some bad news. If your car is totaled, stolen, etc., the insurance will only pay the current retail value, and you would be stuck with the rest. Probably in the neighborhood of $4,500 right now. And, since auto loans are collateral based, you won't likely find a lender willing to flip this loan. And, if you couldn't make the payments, the bank would repossess the car, sell it at auction, and you would be liable for the difference between what it brings at auction, and the payoff. And repo cars bring poor values at auction, so they might get $7,500 out of it tops. Sorry, no good news, just a big dose of reality

Answer 3

They are all right, except it could be pretty difficult to sell a car for more than it's worth, so selling it for what you owe on it, when you are upside-down in payments (meaning that the car's loan is larger than what it's worth) is going to VERY difficult,if not impossible....the thing is to look LONG-TERM at how this will affect you getting ANY car in the future at a GOOD or even DECENT interest rate. You can try to see if your Credit Union (or Bank) will refinance your High-Interest rate loan...so you can save some money long-term, but it's not a good idea to get out of loan because you are UP-side down, you can write it off as a total loss and let someone else (family or close friend in need a good vehicle and cannot otherwise get one but has a responsible job) assume or "take over" the loan payments, but then you lose all the money you've put it in so far. That is the only TRUE way to get out of the loan and not see it affect your credit negatively. However, if you stick it out, possibly refinance, you can get a NEWER model of your dream car after it's fully paid off. Sorry, if this not what you wanted to hear but I've had friends who've had the same problem and it's pretty sad but that is the reason for you to save up any pennies you can for next time you buy a new car so you can put at least 20% down. By doing that, you can ensure you won't be upside down in your payments!

Answer 4

Time is the only thing that is going to fix your problem.

When you're that far upside-down, you would need to buy a MUCH more expensive vehicle to get enough wiggle room to cover the difference on the new note. This would only compound your problem as you'd be trading a $500.00 payment for a $1,000.00 one, AND you'd be even FARTHER upside-down that your currently are.

You can shorten the time it will take to get right side up by adding to your current payment, but that's about it.

Sorry, but there is no way out of this one aside from another 2 or 3 years worth of payments.

Ignore the advice to try and sell your car. You'd have to probably come up with $3k - $5k to make up the difference and release the title. No buyer is going to buy your car without a clear title, unless they are absolute idiots. Also, you cannot sell your car on a "take over payments" basis as at least one poster has suggested. Car loans are not written this way; they are not assignable by the borrower.

Answer 5

Trade In Upside Down Car

Answer 6

You can sell your car for the amount you owe, pay off the bank.

Sell your car alittle more then what's owed to the bank, pay the bank off, and have additional money for down payment.

Depending on how long your car loan is, you can trade in and extend your payments 5 years to 7 years, etc....

Answer 7

Best thing is to wait on the new car. Keep paying normal payments. You can usuually get MUCH more sellling it yourself vs. trading in. So, say you can get 16,500 selling yourself, save up $3500.00 and then put the "for sale" sign in the window.

DON'T ROLL OVER that negative equity. You'll regret it and it will only get harder to dig yourself out with the next car.

Answer 8

Try to sell the car outright and cut the $7000.00 down a bit. You will have to talk to your lending company and advise them of what your plans are. If you sell it for say 15k you are down to 5k and they may finance this as a personal loan and allow you to buy another car without being upside down

Answer 9

I'm interested in this as well

Answer 10

There is no way to fix it. I recommend keeping your current car and paying it off. It is the best thing for you to do financially.