Overhaulin'

What's the best thing for me to do... upside down on my car loan?

So here's the deal... I owe $4600 on a car that's booking for $3,300 (with a couple MINOR mechanical problems) and $3,800 in good condition. I had a guy offer me $3,500 for it. But I don't really want to take that much of a loss. It gets better though... I found a car that's priced for almost $2000 less then what it books for. So my bank said they'd roll over the remaining amount on my existing car to the new car... IF that's what I decide I want to do. My husband thinks I should wait and pay the car down some more. But the problem is that it's our primary vehical. The longer I keep the car, the more miles that get put on it, and therefore is worth less and less everyday. SO... Does anyone have any advise for me? =) The main reason I want to get rid of my car I've got now is because I'm expecting and my car is a coupe... Not so great with a car seat... =)

Public Comments

1. It might really save you hassle to just get an automobile loan price on the web to verify what todays rates are. You might be pleasantly happy. Also if your credit is not so great, a lot of online loaners are more able to help people. What I usually tell folks is that an online quote at http://auto.lowratetoday.com is the way to go.
2. I think $1100 isn't a whole lot to be upside down on the old car. $3500 offer from the guy is somewhere in between Good/Ok condition so I think that's fair. Since you are able to get the newer car for $2000 less than it goes for, you are essentially saving some money (not as much as you would like, but certainly less). You are right about one thing, even if you pay down the old car some more, it will still depreciate since you still have to drive it everyday. Make sure to have a mechanic double check the car you plan to purchase. You want to make sure you are moving on to another car that is in good condition before you make the final decision.
3. If you think the best way to get out of debt is to add more, then go ahead and roll over what you owe into a new loan. If you don't, accelerate your payments until your current car breaks even, sell it to get out from under it, paying it off, and buy something used for cash that you can afford.
4. Sounds like you got a good offer for your current car even you don't want to take a loss. So, if you keep it longer, will it all of a sudden increase in value? Or do you expect someone to pay $4600 for a less than $3300 car? The bank is willing to finance you. Can you afford the new payment? Apparently the bank thinks so. & yep, a coupe will be a pain with a car seat. Tell hubby he's gonna be the one putting baby in the seat everytime you go somewhere.
5. Never roll negative equity into another loan! That's paying interest on top of interest. You will immediately be upside down again. Keep the car until the amount owed is more in line with the value.
6. Car is the worst investment. Most of the time people are upside down on it, unless it's paid off. People always lose money on it (unless driving it for 10 years). Yours is not a huge loss - of course, if you can afford to lose that amount. Just accept cash the loss and get a new car and make the payments on the new car. Like you said, more you waiting, the older the car gets, you won't really win much $ back on it and than you will have to find an other buyer, which is not easy all the time..