Overhaulin'

I am in an upside down car loan. Is there a way out?

A year ago this month i bought a 99 pontiac for about 4600 total and still owe about 2500 on the loan now. Kbb says my car is only worth 1500 on a trade in and NADA says about 3200. Which is correct? Kbb said that the value to sell it privately is only 2500. Am i better off keeping the car and paying it off or trying to trade it in? I cannot afford to just sell it because its the only car i have.

Public Comments

1. Why did u pay nearly $5000 for a 10 year old Pontiacrap???? You overpaid by at least $3000. Thats why u are upside down now. I would keep it cause the dealer might give u $500 for it if ur lucky.
2. I politely disagree with the other poster. I don't think you paid far too much. A bit too much, but if the car was low mileage, in nice shape, then it was likely worth it. Besides, the clock can't be turned back now anyway. The Sunfire is a reasonable used vehicle provided it is maintained. My advice would be to keep the car. $2500 is not a lot to owe, you'll have it paid off relatively soon. By keeping it, you'll be able to save some more money as a downpayment for your next vehicle. Best of luck.
3. Well, ignore the books. (Although you should have looked at them before you bought) No easy way out except keep paying. Maybe double up on your payments. Besides, if you were looking to BUY it now, they would charge $3500 so from that perspective, you are ok. Anytime you buy a car at retail, you will be $1500+ upside down as soon as you buy. Dont panic over the cars trade in value. Its worth far more than that to you.
4. N is right. Most cars don't keep the value of how much you owe on it until, of course, you pay it off. Cars aren't like houses, they do not go up in value, they are not an investment (except for classic cars, I suppose). There were many times when my car was "upside down" while I was paying it off. Trade in values are usually less than private sales too. The only reason you should trade the car in is if you want to add that unpaid balance to your new car loan, which would be dumb, IMO. Don't worry about the "book value" because if the car gets you around, it's worth paying it off.
5. I'm not sure what Mikey is getting at...your car was worth about $1500 in reality last year when you bought it. He might be on a crack pipe, who knows. I'm not sure what possessed you to buy it for $4600 when a little looking around--even at Craigslist--would have given you a decent idea of what they go for. You have to hang onto this car. Nobody is going to tack $2500 onto a new car for you, because nobody here thinks you have the credit to do that, anyway...since it sounds like you hit up a buy here-pay here lot, as no bank would have lent you that money for a 10-year old Pontiac!