Comments on: Getting Out of an Upside Down Car Loan

By: Rachel

Rachel — Sun, 25 Oct 2009 23:23:46 +0000

Unfortunately, we have no easy fix. We’ve been paying the $500 a month payments and now we are upside down about $6K. Our plan is to use our tax return and a small personal loan to pay off the difference, sell the Blazer, and buy a $5K Dodge Grand Caravan (we can get a 2005 or older, probably). That way we get safety and better gas mileage, and we will save about $400 a month in car payments.

So, there’s no easy fix. We’re having to eat the $5K, but we’ll save $400 a month for the next 4 years, so we’re still coming out better. Good luck with your car, this has been an impossible situation for us and like I said, we’re having to just bite the bullet and take the hit to get out of it.

By: angelb

angelb — Sun, 25 Oct 2009 22:37:29 +0000

Rachel, did you ever work something out for your situation? I am in a very similar situation I need to get something done fairly quickly. I am approx $10k upside down in my Tuscon. I have a rare bone disease and need a vehicle that sits up higher (like a truck) so financing a cheap used car is not really an option for me. I am now one month behind on my payments and afraid they will repo any day now. Please help, I am open to any advise out there.

By: Rachel

Rachel — Thu, 02 Jul 2009 02:26:48 +0000

Please help! We are upside down in a Blazer to the tune of $10K minimum. We can’t just sell it and finance the difference. We have 4 kids in carseats, so I literally MUST drive a big car. The reason we have our stupidly expensive Chevy is because our beater van DIED on the freeway and stranded me and my 4 kids. Not cool, and yes, we got screwed at the dealership because we were panicked. So we can’t sell it, eat the $10K and buy a $2K beater car because that is the car the kids ride in. HELP ME! Our $490 payment is KILLING US.

By: matttttttttttttt

matttttttttttttt — Fri, 10 Apr 2009 20:51:02 +0000

Adam,

Frugal dad is saying you go to your local credit union and take out an unsecured personal loan for the difference in the selling price of the car and what you owe on it. Then you go to your financing company with the enough money to get the get the title, which you can then turn over to the new owner.

i havent actually tried this method for getting a car unloaded, but i’ve been giving it some thought for a few months now. I need to know it works for sure before i do anything.

the other end of it is that you need to find a reliable car for as freakin cheap as you can, something that won’t require much work, that if the tranny does crap the bed doesnt require you import your parts from Uzbekistan, and is mechanically simple enough that practically any backyard mechanic can fix.

it sounds kinda risky, and i think it is, but if something does go wrong with the car (which probably will happen) hopefully the repair costs are less than the amount you were upside down in the first place.

By: Adam

Adam — Sun, 15 Mar 2009 20:24:10 +0000

What Frugal Dad says may have some merit, but I think he forgot one minor detail in his advice giving. When you take out a car loan to buy a car, who gets the title? You?–No. The bank who offered the loan does. And, in order to sell your car to someone else you will eventually need to obtain that title from that bank. So, I’m not sure how one would even try to sell a car that they don’t have the title for if they are selling it for less than they owe on it unless they have the means to pay any remaining difference once they got an offer from a buyer.

By: Seven Ways to Ruin Your Financial Future | Frugal Dad

Seven Ways to Ruin Your Financial Future | Frugal Dad — Tue, 23 Sep 2008 11:00:53 +0000

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By: Llama Money

Llama Money — Thu, 31 Jan 2008 18:38:06 +0000

Shan-Oh – I agree on the not buying used cars part. I couldn’t fix a car if my life depended on it, and i certainly don’t want the added risk of breakdowns. My job doesn’t tolerate late days / missed time from work, and these are things that are a reality with used cars.

But when you buy a new car, research and cash down are your friends. Trading in cars with in equity is not the answer, and will only further your troubles.

By: Shan-Oh

Shan-Oh — Thu, 31 Jan 2008 01:53:09 +0000

Hmmmm…I would like to add just one more thought on this post, as it’s a fairly common theme on these frugal living sites.

Usually buying a used car IS a good idea, but as the daughter of a mechanic, I can tell you that most people are woefully ignorant of even the basics of maintenance and upkeep that older cars require.

Older cars just plain need $$$ to keep them running. Not a lot, but it can seem like a lot when you need a new transmisison and the shop is charging you $2500 to replace it…and you only paid $4000 for the car.

If you are handy, grew up around cars or know how to rebuild an engine, then an older car is a good fit and can be VERY cheap to own. If you’re not, or you depend on that car to get you to work, and you don’t have the cash cushion to fix any major repairs, I would urge you to go with a newer car (still not brand new!) and perhaps look into an extended warranty.

That and be nice to your mechanic. Loyalty and decent conversation go a long ways towards saving you money with shop expenses

By: What Are Your Searching For | Blogging |

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