Overhaulin'

HELP PLEASE! What are my options with my upside down car loan?

I have a car loan that I owe $19,000 and the car is only worth $15,000. My payment is $460 a month and I cant afford it now in my current situation. I have excellent credit, a steady job history, and ideally I would just like to have a decent reliable used car with a loan around $8,000 and a payment around $100 to $150 a month..if possible. What are my options at this point?

Public Comments

1. pay off your loan or get a loan extension so you miss a month of payments until you can get back on your feet...theres nothing else you can do really, you signed a contract stating your income and now your responsible for paying off your loan, or they will reposess your vehicle...good luck
2. OK here is a valuable lesson for you. First and foremost - just do the simple math. If you bought an 8000 car, the payments wouldnt be $150/month. After taxes and fees, that $8k car is closer to $9k. so that puts you at just under $200 on a 8.9% loan for 60 months. Frankly, on a used car, the term probably wont be 60, more like 48 or 36. And I bet the APR would be higher because, well, credit it tight now. Then we have the matter of your car. What happens to that $4000 you are short? Lets assume you met a generous dealer who will pay that $15k - you still need $4000 to get out of that loan. Where does it come from? Someone has to pay it. I bet you are thinking "I'll just roll it into the new loan". Nope. Not on a $8000 car you wont. Banks are sketchy about lending more than the value of a car. If you have gold balls credit you MIGHT get a 110% advance. But even at that, those overadvance loans are scarce. Assuming a dealer bumped his head, and the banker wasnt paying attention, and you DID roll that $4000 into your $8000 car. well, you financed the taxes and fees, since you want $0 down. That means you owe about $13,000 on a car worth $8000. Sound smart? well it doesnt end there. That $8000 car is likely going to appraise around $5000 at the end of a year. Your payments wont outpace the depreciation (as you have already seen). By Christmas, plan on being over $6000 upside down. Oh, and your payments will be about $350/mo at 48 mos. The REAL world of overadvance loans means that - at 110% advance - you need to buy a $40,000 car to hide $4000. And then you will be so buried that you wont get out of that car with C4. its tough now, but you gotta tighten the belt, take a second job, do what you can to pay this thing down, and eventually pay it off. Then drive it til the wheels drop off. That is the only real option. Or repo - but you dont want to go down that path.
3. Unfortunately, when you are upside down $4,000 there isn't much you can do, unless you can sell the car and get a personal loan to pay off the difference.