Overhaulin'

i am seriously upside down on a car loan what are my options?

Public Comments

1. Keep paying for it. If you were to trade it in, the difference would be added onto your next loan. Or, if you have GAP insurance and collision coverage, total the thing.
2. If you don't need a new car, just keep paying it down. Buying a new car will only makes things harder for you. If you trade it in at a dealer, they'll just add what you owe to your new car payment.
3. You sound like you purchased a car without a positive credit report and got a high interest rate. Or you want to get another car and cannot get out from under this loan, because you would owe more than the car is worth. Your best bet, and only legal bet is to pay off the loan. If you total the car, as the other person suggested, you might see yourself looking through bars. I have a friend who had a similar problem. He did the right thing and paid off the note. There are not a lot of options today in the financial market we are in.
4. You honestly don't have any except to keep paying on it until you have equity. But that can take years. A lot of people who are upside down on their cars are in that predicament because they rolled negative equity into another car loan. Rolling negative equity into another loan is the worst thing you can do. You'll be paying interest on the new car plus interest on the balance of the old car throughout the entire life of the loan. You'll never get out from under it until the loan is paid in full. And that's what puts a lot of people in such a horrible negative equity situation. The other situation is the market. Currently, trucks and SUV's are taking a beating in resale value. It's so bad that Dodge is offering 50% off on all their new full size trucks! And that depreciates the value of their used trucks even greater than usual. If this is your case and you want a more prudent car, think of how much you'll have to roll into a new loan. How much interest will you pay just on that portion during the life of the loan. Then calculate the MPG of both vehicles and the miles you'll drive annually. What is the difference in gas costs between the two during the term of the loan? You may find that you won't break even after 60 months! You'll have to drive even longer in the higher MPG vehicle to make up for all the money it cost you to trade down. A final thought, banks and lenders will only loan up to 10% over sticker price of any vehicle. So if you're that much upside down and don't have enough down payment to counter it, it'll take the total tab on the new car far over 10% of MRSP and you'll be declined.
5. This gets asked in here 10 times a day. There's only one option - PAY for the car! That's why you're upside down. It's because you've been driving around, enjoying the car, but you haven't paid for it. Get it? If your car payments were 3 times larger, you wouldn't be upside down. Instead, you chose 3 times longer. You still gotta pay, either way. So - here's the plan. Pay for the car. Then, drive it another 15 years without making a car payment. You'll love it!
6. Your option is to keep paying on it. Eventually you'll own it. Anything else you try to do will cost you big money and your situation won't improve.