How does one get out of a car loan whe there's 4K in negitive equity?

Question

Have 2004 Forester XT, 60K miles(on now) bought car in 2/06(18k miles then). Due to credit my payments are 401/month. How can I get of this mess?
Can I pay the difference and sell the car . So I can take my loss and get the car I really need?

Wow...thanks.....guys......superb ideas!

Answer 1

There are a few ways to get out of negative equity on a car. Let's assume it is worth $12k trade-in, $14k retail, and you owe $16k.
Your first thought may be the best choice, if you can afford to pay the difference and sell the car to another person by advertising it, you will have a paid off loan and be rid of it. In the above example you would only have to come up with $2k. The downside is you need to be willing and able to go without a car for a week or so because you want to be able to sell it to the first person who will pay you a reasonable price. Something to keep in mind is you will need to pay to have the car detailed and any glaring defects repaired so you can get the most money out of it, then pay for advertising and to keep it clean. When someone is ready to buy it you may need to repair items they find wrong which you overlooked.
A second option is to trade it in. In this case if you can pay the $4k difference in the above example you will be 'starting over' on the next vehicle. The downside is you pay more, but the upside is you don't invest the time or money to sell the vehicle and you don't have any time without a vehicle. As an added bonus, many states do not charge you sales tax on the value of your trade-in, so this may help reduce the difference in what you give up by not trying to sell it.
There are variations on the trade-in option. For example, depending on credit (now - not when you got the car), you may be able to pay $1k now and finance the other $3k in with the new car (or vice-versa). Another option would be to buy a brand new car with rebates and use some/all of the rebates to help pay off your trade in. Of course this means you will be paying some of that negative equity (plus interest) with each payment on your new vehicle over the next 4-6 years.

Hope this helps you sort it out.

Answer 2

This is a problem faced by 75% of people who finance a vehicle. Most do so without putting any or little money down in the beginning giving them an immediate negative equity. I know that doesn't comfort you much, but know you are far from alone!

The only real way you can get rid of the loan is to trade the vehicle in on a lesser vehicle and roll over the negative equity. You can also sell the car and pay the difference, however, that may take some time and you probably don't have a title or if you do it has a lienholder on it making it cumbersome to sell. Don't take it to a dealer to sell it. You will get thousands less if you do.

Go to kbb.com and look up the private party value of your car. Be brutally honest about your cars condition so that you get an accurate price. If you are going to sell it, ask a little bit more than what it tells you to leave room for negotiating. Make sure the tires are in good shape and detail it with a que tip to make the car look great!

The very best thing you can do is get out of a payment before it destroys your credit so selling probably is your best option. Try AUTOTRADER.com for a great place to advertise. I think they charge 40-50$ and it runs til sold. They have branches all over the country.

Good luck. I have been in the auto industry for many years. If you need any more assistance or questions, feel free to email me. [e-mail].

Answer 3

Your suggestion is the quickest way...if at all possible, pay off the negative equity of 4K and sell the car. Then get another car with more affordable payments. Only other way is to trade down to another car and roll over the 4K but still allow for lower payments...this will give you some time to pay down the negative equity. 4K over three years would add 120.00 or so a month to a car payment. It's a common problem.

Answer 4

You pay the creditor (in full) and sell the car. You took the car, and now you have to pay for it.

People do this all the time, so there are a couple of ways to do it. The best way is to take the buyer to the bank, pay the bank, and get them to release your title right at that moment.

What you don't want to do is trade it in. Car Dealers will work very hard to sink you farther into debt with a bigger equity hole than you've got now.

Answer 5

Keep the auto until it's to the factor wherein it's automatically undrivable. In this economic climate only a few men and women have the posh of wasting countless numbers of bucks in coins on a frivolous acquire like a brand new auto until it's obviously vital. Just for the reason that you "wish" a more recent mannequin is not any motive to make a foul economic resolution and lose a ton of cash. Live with it for somewhat longer and shrink that terrible fairness to a extra fair degree.

Answer 6

Hi,

Maybe with your Good Looks You Can Do Modeling,
and pay off your debt and get Better things.

Answer 7

I DON'T SEE WHAT YOU CANT, JUST READ YOUR CONTRACT AND SPEAK WITH THE DEALER.

ONCE EVERYTHING IS OKAY MAKE SURE AND RECHECK ALL OF YOUR PAPERWORK.