Overhaulin'

what is the best thing to do when I am upside down in my car loan.?

I have a 2007 Jeep that I owe $18,000 on. Ive had the car since 9/4/07...but my car payment of $415.00 a month is killing me as well as gas prices. I want to trade down for a less expensive car payment how do I go about this and what options are out there?

Public Comments

1. I'll be looking forward to reading all of the answers because my girlfriend is in the same boat... she owes more on her van than what it's worth.
2. You will lose your behind if you trade it now. Gas guzzlers are in very low demand. Don't expect a dealer to give you a good price on a trade. Why would he want it. He would be stuck trying to sell a vehicle that is not in demand. Financially, you will be better off keeping it. The money you will lose on the trade will far exceed the money you are paying for fuel. As the saying goes, "You will be throwing good money after bad" Say you lose $4,000 in the deal. You will have to save $4000 in fuel to make up the difference. Even if your new vehicle gets 15 more miles per gallon than your Jeep, it will take you several years and over 100,000 miles in your new vehicle to break even. You should suck it up. Keep it until it is paid off. This is the only way you will come out ahead. Drive the speed limit. Accelerate slowly Decelerate slowly Keep the tires correctly inflated Do not allow it to idle for more than a couple of minutes No long warm-ups. Start and drive off. Remove any unnecessary items. Get rid of any junk you are carrying around Plan and combine tripe when possible Carpool if possible. I know this last part is too late. Put a little more thought into selecting your next vehicle. Make sure it fits your needs, not your wants. As you have just learned, you will not like a vehicle that you cannot afford to drive.
3. trade down and add what is owed to your loan, or like my son is doing he got a 2nd job to pay up what he was upside down on to buy him a hybrid car for college. I know it's sucks he says but seems to be working out for him the last 4 months and he was 7k in the hole.. whew!
4. You are upside down on your loan - and you want to dig a bigger hole by TRADING it in??? Until you decide to work at fixing your problem - it is just going to get bigger and bigger. ==== You are making 3 biggest mistakes when selling and buying a used car (1) trading in - instead of selling it privately (2) going to a used car dealer - instead of private seller (3) getting used car dealer financing. You are giving the used car dealer a blank check to screw you - with all that mixed up in one big deal. ==== Separate the 3 - into 3 separate deal - so you know exactly what is going on. (1) sell your car privately - if you own money, find out from your loan company / bank how to sell it. You will most likely have to do a 3 way transation at the bank office AT THE TIME of sale (you , buyer, bank) - FIND A WAY !! (2) go to a bank and secure a loan (3) go find a car sold privately. Good Luck...
5. The only real option is if you have great credit you can lease while upside down and hide more inequity with lower down payment. If you have really great credit you can refinance up to 125% of loan as either trade in or keepig car and refinancing. Your interst will go up 2 poits but still will be less. if marginal credit then you are stuck bascally. There is no way to get lower payment. Owing 18,000 and paying 415 though is lower then average car payment in america and is 400 a month for 5 years with excellent credit so what I am saying getting more then or less then 415 by maybe 5 or 10 dollars is not going to be worthj it.
6. The only wise thing to do is keep making payments and keep the car you have. You are going to really get hammered if you try to trade down and the money you will lose would make a lot of payments and buy a lot of gas.
7. By rolling negative equity into the loan for even a less-expensive vehicle, you will perpetuate your negative equity situation and probably not end up with a smaller monthly payment. Already you're several thousand dollars upside down in the Jeep. Buy a cheaper car and you'll be even more so. You'll also have a car you will never be able to get rid of until the loan is paid off.
8. I was in the same boat as you, I just traded in my 05 Linclon Aviator for a 2008 Mini Cooper Convertible and I am getting 3x the gas mileage now. I used an automotive consultant company, they helped me figure out the deficiency on my aviator and got me a fantastic deal on the new car! I am paying much less for the new car and saving gas all at the same time! Here is their website www.autobyel.net
9. Ouch. That's painful. Sorry to say, but you're kind of stuck right now. I would make a few more payments and try to hang in there till winter. If the winter months are bad where you live, you might be able to sell it for not as big a loss. If you can afford it, go out and buy a $2K Geo Metro or something and park your Jeep 3 days a week. That will at least save you in gas and it's better than taking a much larger hit. You might be able to find a used car dealer who will give you about $10K for it. If you buy a more fuel-efficient used car from them that costs $5K, then you'd only be financing $13K (adding the $8k difference to the price of the car). But for $5k, you will probably get an older car with a lot of miles on it, so be careful. Whatever you do, good luck. A lot of people are in your same situation.