Overhaulin'

What's best thing to do with my expensive car with its upside down loan?

Can't afford high car payments because of lousy cut in take-home pay. What is my best course of action? Owe about $13,000; Blue Book is about $5,000. Have no money to put down on new car and credit is getting worse with each passing week due to difficulties paying credit cards. Is there anything I can do here? Can I trade it in? Can you willingly let your car be "repossessed"? Then I NEED my car--a car--too...My car is only half paid; 3 more years of pricey payments...

Public Comments

1. Hopefully you have an emergency fund for times like this. Don't know your entire situation but a voluntary repossession may be your best course of action. The emergency fund should be there to purchase a cheap vehicle. Since it sounds like you are already out of cash then you need to do just that, build any cash you can. If your getting paid, then food and shelter come first, other than that don't spend anything. No cable, no cigarettes, no alcohol, no movie theaters, no soft drinks (drink water). At about $1000 you can find a cheap vehicle from a private seller. I have bought many decent ones around there. Once you get the new one, voluntarily let the old one go and immediately drop you insurance down to liability on the new one. You should get money back from your insurance company (hopefully you have insurance). Rebuild from there. If you end up having to file bankruptcy, then don't dwell on it, just do it. Many will say your credit will bury itself, but that is not true. Lending companies know you can only file bankruptcy once every seven years and they will extend very limited credit (try not to use credit, it costs too much!). Best of luck.
2. you are stuck! Depends on what you want to do. Can you consolidate all your debt into one payment? That would save you lots of money. Dont let your credit go to crap. It is very hard to build it back up. You could trade your car in on a cheap one but it might now drop your payments much...
3. You have credit, so get a smaller vehicle payment, after u get a smaller vehicle payment call finance company and ask where you need to take it to give it back. with each day going by your value is depreciating but the loan amount is appreciating due to interest, once it is givin back your depreciation stops. tell them you can only afford to give them 100 a month towards your balance owed and DO NOT MISS or BE LATE. You can lease a toyota corolla for 1600 down 195 a month for 3yrs. A highlander for 2700 down 281 a month for 3. I would bet on the corolla. Do Not Tell Your having Fin. Prob. when geting a diff. car. D Not Give old one back till you have a nw one. he he
4. Keep paying and take on another job. YoOu can let your car be repoed all you want, but what good does that do you? You have no vehicle then you are STILL paying on this one as you have to pay the leftover amount after it sells at auction for some ridiculously low price.
5. You can willingly let your car be repossessed. It is still a repossession and you will owe the difference between what the lender sells the car for and the balance of your loan, and it will damage your credit for 7 years. You will have difficulty buying another car after that. Really, with as much negative equity that you have, the best option would be to keep the car and find a way to keep making the payments. If you let this car go, you'll be in worse shape than you are now, without a car.