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Message
Upside-down on a car note, advice
Posted on 5/22/17 at 1:18 pm
Posted on 5/22/17 at 1:18 pm
I come to y'all hat in hand, needing some advice on how to fix a (totally self-inflicted) situation I am in.
I owe ~18,000 on a car worth ~13,000 (trade value). 3.75% interest rate with around 5 years of payments left. Normally I would just pay this out to the end and deal with it, however I am growing concerned reading reviews on the specific year model of this car, that I have some potentially very serious transmission problems coming up in the near future, and I want to dodge that bullet.
What is the best way to get around that 5k hole I am in, while still getting out of the car before it really fricks me on repair costs (european, yes, again, I realize this is a self-inflicted situation). Should I pay 5k cash to the bank and even out my equity and then trade? Should I go to a dealer with this upside-down car and trade? Should I try to private sale the vehicle, something I would love to avoid, and pay the difference to the bank?
What say the minds of Money Talk? I have room to move on the monthly note from a DTI standpoint, that's not so much the problem, it's just this fear of a 10 grand transmission. Car is off warranty. Credit is in the low 700s.
I owe ~18,000 on a car worth ~13,000 (trade value). 3.75% interest rate with around 5 years of payments left. Normally I would just pay this out to the end and deal with it, however I am growing concerned reading reviews on the specific year model of this car, that I have some potentially very serious transmission problems coming up in the near future, and I want to dodge that bullet.
What is the best way to get around that 5k hole I am in, while still getting out of the car before it really fricks me on repair costs (european, yes, again, I realize this is a self-inflicted situation). Should I pay 5k cash to the bank and even out my equity and then trade? Should I go to a dealer with this upside-down car and trade? Should I try to private sale the vehicle, something I would love to avoid, and pay the difference to the bank?
What say the minds of Money Talk? I have room to move on the monthly note from a DTI standpoint, that's not so much the problem, it's just this fear of a 10 grand transmission. Car is off warranty. Credit is in the low 700s.
9
Posted on 5/22/17 at 1:23 pm to sealawyer
Did a specific dealer quote you $13,000 on trade?
Posted on 5/22/17 at 1:42 pm to sealawyer
quote:
10 grand transmission
What kind of car? No way a trany cost 10k.
Posted on 5/22/17 at 1:42 pm to sealawyer
There's no guarantee that you'll end up experiencing transmission failure. Since you are upside down in the car, the only way you'll realize a hit is "IF" something catastrophic happens with the car. Your car might last you 5 years past the time you have left to pay on it before experiencing any type of engine or transmission failure. If it was me, I would roll the dice and pay it off and try to get from under water, but if you have the money in the bank (difference between the trade or private sale and the loan value) to do that now and aren't willing to take the risk you can do that as well.
This post was edited on 5/23/17 at 8:47 am
Posted on 5/22/17 at 1:50 pm to iknowmorethanyou
Did a specific dealer quote you $13,000 on trade?
KBB and NADA research.
KBB and NADA research.
Posted on 5/22/17 at 2:00 pm to sealawyer
Are there any dealers you trust a specific value of your trade?
Posted on 5/22/17 at 2:16 pm to sealawyer
What kind of reviews are you reading? There's typically 2 types of reviews, those who hate it and those that love it. I always try to take most reviews with a grain of salt and remember they are usually outliers.
If it were me, I'd ride it out. You know you're underwater on the car. You don't know if you will have transmission problems. You cost yourself no real money by keeping the car. It's a theoretical loss at this point. If you sell it now you will lose $5,000 of your real dollars.
If it were me, I'd ride it out. You know you're underwater on the car. You don't know if you will have transmission problems. You cost yourself no real money by keeping the car. It's a theoretical loss at this point. If you sell it now you will lose $5,000 of your real dollars.
Posted on 5/22/17 at 3:25 pm to sealawyer
I agree with Hammond. Just b/c you are reading reviews these cars have bad transmissions, doesn't mean your's is going to fail. IF you are worried about it, change the fluid, have it serviced, and take care of it in how you operate it. Any vehicle you read about online for any year, is going to say it's prone to some sort of costly problem. But that might be 1 out of 100 or 1 out of 1000.
You're buried in that car in such bad equitity you need to make more than the mininum payment if you can, and maybe in a couple years sell it to a private party to break even on it, if you want the cheapest quickest way out without losing money.
You're buried in that car in such bad equitity you need to make more than the mininum payment if you can, and maybe in a couple years sell it to a private party to break even on it, if you want the cheapest quickest way out without losing money.
Posted on 5/22/17 at 3:38 pm to sealawyer
quote:
18,000 on a car worth ~13,000 (trade value)
If you bought used that's not that far off. The in between price would be the private seller, but the dealership is going to take your trade in and sell it for $15-16k most likely.
So your first option is to private sell it. All you have to do is take 4 pictures and put it on craigslist with the miles and price and see where that takes you. It can take less than 60 minutes to sell a car if its priced right, there's a great chance you could sell it for $14-15k pretty easily. Just sell it for $1-2k under what a dealer would.
So that right there is $1-2k of your hole. As said, you can't worry about potential issues. A transmission is not a definite issue.
Posted on 5/22/17 at 3:39 pm to sealawyer
Do you have GAP insurance and in driving distance of a body of water?
Posted on 5/22/17 at 4:16 pm to sealawyer
Is buying an extended warranty an option? If you're that worried about the transmission, find a warranty that will cover it and let it ride. If you sell the car, i believe you can cash out the remaining warranty.
Posted on 5/22/17 at 7:29 pm to DownSouthDave
Sell it for another overpriced car with a lengthy payment plan.
Really though, you can increase your payments to mirror the depreciation, so it doesn't happen again.
I imagine you got a decent rate, don't feel like you got to pay it off. Just drive it a few years after pay off.
Don't buy a new car until you figure out your finances
Really though, you can increase your payments to mirror the depreciation, so it doesn't happen again.
I imagine you got a decent rate, don't feel like you got to pay it off. Just drive it a few years after pay off.
Don't buy a new car until you figure out your finances
Posted on 5/22/17 at 8:54 pm to Rust Cohle
"Don't buy a new car until you figure out your finances"
Posted on 5/22/17 at 10:33 pm to sealawyer
Can you buy an extended warranty? Might be worth it in this case.
Posted on 5/22/17 at 10:58 pm to baldona
Good advice, IMO.
And not to go off topic, but I'd still love to know what $15K +/- car has a $10K transmission (even including labor)???
And not to go off topic, but I'd still love to know what $15K +/- car has a $10K transmission (even including labor)???
Posted on 5/23/17 at 11:03 am to Jag_Warrior
quote:
And not to go off topic, but I'd still love to know what $15K +/- car has a $10K transmission (even including labor)???
He just said it was a fear. An irrational fear maybe, but still just a fear.
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