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Message
Best options for being underwater on car?
Posted on 5/20/16 at 2:33 pm
Posted on 5/20/16 at 2:33 pm
Bought a 2013 vw before all the negative crap came out on them last year. Now the blue book is saying its worth 3k less than we owe.
Our interest rate on it is less than 2%.
Even though we have a low interest rate, should we make extra payments to get from being underwater?
My guess is it would depend on how long we plan to keep it, correct?
Our interest rate on it is less than 2%.
Even though we have a low interest rate, should we make extra payments to get from being underwater?
My guess is it would depend on how long we plan to keep it, correct?
10
Posted on 5/20/16 at 2:38 pm to LSU6262
Correct! Underwater/upside down only effects you when you trade in or vehicle is totaled and you can get 'shorted' the amount you owe (if you do not have GAP).
Posted on 5/20/16 at 2:51 pm to LSU6262
Isn't there a huge class action settlement coming to VW owners? Might that make you whole?
I have not kept up with the details, only heard a few talking points about the CA settlement by having CNBC on in the background while I work.
I have not kept up with the details, only heard a few talking points about the CA settlement by having CNBC on in the background while I work.
Posted on 5/20/16 at 2:54 pm to LSURussian
quote:
Isn't there a huge class action settlement coming to VW owners? Might that make you whole?
Any time you see "class action" and "made whole" you should have doubts
Posted on 5/20/16 at 2:54 pm to LSU6262
quote:
Bought a 2013 vw before all the negative crap came out on them last year. Now the blue book is saying its worth 3k less than we owe.
Our interest rate on it is less than 2%.
Even though we have a low interest rate, should we make extra payments to get from being underwater?
My guess is it would depend on how long we plan to keep it, correct?
Yep, you need to drive that til you pay it off.
Posted on 5/20/16 at 2:55 pm to LSU6262
In most vehicle loans you're going to be underwater at some point. I wouldn't worry about it at all.
Posted on 5/20/16 at 2:55 pm to LSU6262
In most vehicle loans you're going to be underwater at some point - especially with a great interest rate like yours. I wouldn't worry about it at all.
Posted on 5/20/16 at 4:44 pm to LSU6262
Underwater is a term of art, considering FMV is what someone will pay for it.
I guess I'm different in that I never buy a car without the intention of driving it at least as long as it it takes to pay it off, if not much longer.
I also buy GAP insurance to protect against having it totaled for less than FMV.
With your interest rate so low, why not invest the money you would pay towards principal in a no-expense or very low expense index fund, and if at some point you need it, you have it.
A rate of less than 2 percent means you are paying less than the rate of inflation. That's a great place to be.
I guess I'm different in that I never buy a car without the intention of driving it at least as long as it it takes to pay it off, if not much longer.
I also buy GAP insurance to protect against having it totaled for less than FMV.
With your interest rate so low, why not invest the money you would pay towards principal in a no-expense or very low expense index fund, and if at some point you need it, you have it.
A rate of less than 2 percent means you are paying less than the rate of inflation. That's a great place to be.
Posted on 5/20/16 at 7:42 pm to LSU6262
quote:
3k less
Might seem like a lot but there are people who are worse off than that.
Posted on 5/21/16 at 1:59 am to momentoftruth87
GAP insurance is the GOAT, it saved my arse after my last wreck with an uninsured motorist
Posted on 5/21/16 at 1:17 pm to LSU6262
If you're impacted in the TDI mess, sit tight. VW will offer a buyback before the end of the summer, with cash on top of the cars value, pre-scandal. You may come out ahead of the game on this one. Depending on the model, you might be able to opt for a no-cost-to-you fix plus some cash.
Posted on 5/21/16 at 5:35 pm to LSU6262
quote:
ow the blue book is saying its worth 3k less than we owe.
Youre better off than id say 87% of folks.
Posted on 5/22/16 at 9:37 pm to LSU6262
No. Your interest rate is comparable to inflation, there's really no reason to pay early. A loan with interest that low should always be stretched out as long as possible.
That said, it is probably not a bad idea to make sure your insurance is in order and/or you have the means to deal with the car being totaled. But there's no need to use that money until you really have to.
That said, it is probably not a bad idea to make sure your insurance is in order and/or you have the means to deal with the car being totaled. But there's no need to use that money until you really have to.
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