Cant afford her car payments? Considering trashing the vehicle?!?

Question

My best friend just bought an expensive car! She owes like $30,000 on it! She said she went with the lowest intrest rate she found, and now she is afraid she cant afford the vehicle. I told her to sell it but she has like $10,000.00 neg. equity! She now is trying to figure out a way to total the vehicle because her loan covers the remaining cost if the car that the insurance doesn't pay (her neg. equity), and the insurance covers the rest. In other words she owes nothing. I don't know what to tell her!?! Please help. Should I help her come up with ways to total the car, or what other ways can I go about this situation?

Answer 1

Even if she does have negative equity in the vehicle, she can still trade it in. She'll end up paying a higher payment(but probably less than she's paying now) for less car but it avoids insurance fraud.

Another option is to try to use equity from her home, if she owns it to consolidate the loan for a longer term or even looking for a longer term(probably higher rate) car loan.

Going with the idea of totaling it for the insurance money.

First, very very high chance she'll get caught and you would most likely be named an accomplice.

Second, She's going to pay much higher insurance premiums for most likely the next 5 years. Quite costly.

Third, It's morally wrong. Your momma should've taught you both better to even consider it.

Answer 2

Aside from the fact that this is insurance fraud, this is still a recipe for disaster. When you total a car, the insurance company only pays out the blue book value on the car, minus the deductible. She would still be in the hole even after the insurance payment, and would have to make payments on the loan for a car she doesn't have.

I would turn in the car to the bank. The outcome would be the same as totaling the car, and its not illegal.

Answer 3

What your friend is suggesting is a serious crime. Insurance fraud is a felony. Let me get this straight, your friend just bought this car and already she can't afford it? Maybe she should handle this like an adult and get another job to earn enough to make the payments, rather than trying to weasel her way out of a situation she put herself into?

Answer 4

I know a girl who couldn't afford her vehicle anymore so she took it to the bank and told them to take it. it probably looks like a repo on her record, i am not sure, but it is a hell of a lot better than insurance fraud. She owed around 10k on the vehicle and before she turned it in to the bank she got another loan and got a 3k loan and a 3k vehicle. After the new loan was issued she turned in the 10k vehicle to the bank.

Answer 5

Well, she could kill herself or you in the process. And if she comes up with a way of doing it and the Insurance Comp. figures it out she'll owe it any way. It is not the way to deal with things .. Kind of like killing off a husband that didn't suit you.. Not rational.

Answer 6

You can kindly inform her that intentionally damaging the car to obtain an insurance payment is insurance fraud, and that you will have no part of it. Then stick to your guns and have NO part of it.

Answer 7

Stay out of it. She'll get caught and you'll be an accomplice. This is serious sh**. She should have thought about this when she singed the papers.

Answer 8

destroying a car would be insurance fraud! tell her to talk with a financial advisor to see what her options are!

Answer 9

Not too smart to advertise your intent to commit insurance fraud.

Answer 10

Try to find someone to take over the payments for her....