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Underwater on a car loan (1 Viewer)

ren hoek

ren hoek

Footballguy
She made the mistake many years ago of buying a car by herself after landing a good job out of college and basically agreed to pay $18k or so for a 2011 Hyundai.  She still owes about $13k on it after everything.

Recently a family member purchased a vehicle and offered to give us their old one, a 2002 Honda with about 220k miles on it.  It's in good shape so I'm thinking we can get rid of her 2011 and just have her use that.  

I guess my question really is what is the best possible return for this car that she got a #### deal on?  Trade it back in to the dealership and hope they forgive the debt?  Sell it on the internet?  What do?  

 
Ren Ho3k said:
She made the mistake many years ago of buying a car by herself after landing a good job out of college and basically agreed to pay $18k or so for a 2011 Hyundai.  She still owes about $13k on it after everything.

Recently a family member purchased a vehicle and offered to give us their old one, a 2002 Honda with about 220k miles on it.  It's in good shape so I'm thinking we can get rid of her 2011 and just have her use that.  

I guess my question really is what is the best possible return for this car that she got a #### deal on?  Trade it back in to the dealership and hope they forgive the debt?  Sell it on the internet?  What do?  
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You can't sell it.

 
You are stuck with the loan until you can sell it for what is owed.  Whenever you can break even, ditch it.  Never ever, trade it in for another.

 
How much underwater?  You can try to sell it to a private party via Craigslist or wherever, but in the ad say it still has a lien on it and that you won't be able to get the title until the $ goes to the bank and the title comes back.  This is assuming you can get any where close to what is owed and still make up the difference.  I have seen it work, but it's difficult.

 
She'll just have to keep paying, and hope the Hyundai lasts a while - it should. There is no other choice for now.

 
Copeman said:
How much underwater?  You can try to sell it to a private party via Craigslist or wherever, but in the ad say it still has a lien on it and that you won't be able to get the title until the $ goes to the bank and the title comes back.  This is assuming you can get any where close to what is owed and still make up the difference.  I have seen it work, but it's difficult.
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About $13k owed on it.  It's not unmanageable but life sure would be easier on her- and by extension, me- if we could unload this thing on someone and just pay $5k on the loan or something.  Wishful thinking, I know.

 
Gratefully accept the Honda and flip it for whatever $ you can.  Put the proceeds toward the Hyundai loan.  

Take great care of the Hyundai.  Use it sparingly.  Cut down frivolous use of it.  Spend your time caring for it.  

Pay a little extra on the loan each month.   This is your savings plan.  Saving for freedom.  Double check that your extra will be put toward principal.  You may have to state that explicitly w each payment.  

Last and probably least, check w Attorney General in state she purchased for recourse against predatory lending practices.  

 
ChiefD said:
What is wrong with the Hyundai?
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Nothing wrong with it, it's a good little car.  It's just a huge chunk having to pay $330~ or so every month for it.  Rather have ownership of something and part ways with this thing if it were in a million years possible.

 
Buddy did this with an hyundai tiburon years ago.....  Went into the dealership with crap credit.... "no I can't afford $450/mo" (or whatever it was)...  they asked "What can you afford?"... He said "My max is $300/mo".

He walked out with a new hyundai on a 108mo note or something insane like that. I think he paid $45k for that $21k car. 

(All numbers are guestimates based on rough memory, but moral of the story remains intact... )

 
If it is a good car, I don't see any advantage of getting rid of it.  The only way to get out of it, is to trade it in and go deeper in the hole.  Just bite the bullet and increase your monthly payments and get the damn thing paid off in a couple years.  It was a bad deal and nobody is gonna bail you out for free.  Unless you have a really good insurance policy......

 
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She's had it for "many years" but she's only been able to pay off $5K out of $18K? Must be a terrible interest rate.

If so, her best move at this point would be to get a personal loan (at a lower interest rate), then pay off the Hyundai and sell it at a loss, then make payments for the next 5 years to pay for her mistake. Hopefully that will teach her not to be dumb with money.

 
:P

jon_mx said:
If it is a good car, I don't see any advantage of getting rid of it.  The only way to get out of it, is to trade it in and go deeper in the hole.  Just bite the bullet and increase your monthly payments and get the damn thing paid off in a couple years.  It was a bad deal and nobody is gonna bail you out for free.  Unless you have a really good insurance policy......
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I've just been informed it's a 2013 Accent.  No engine problems.  The doors squeak a little bit and the rear hatch is leaking.  26,000 miles.

You are probably right.  I have this dream where maybe someone pays us 8k for it, we put that towards the principal as much as possible and maybe pay the remaining 5k or something.  I don't know the logistics of how such a financial deal might work since I've never taken out a loan or been a real person, but I'm hoping we can manage something like that.

 
It's not all about interest rate at this point.  It's about dollars of interest left to pay.  If she's years in, most of each payment is going to principal.  If the personal loan results in less dollars of interest paid, it would make sense.  

 
Ren Ho3k said:
About $13k owed on it.  It's not unmanageable but life sure would be easier on her- and by extension, me- if we could unload this thing on someone and just pay $5k on the loan or something.  Wishful thinking, I know.
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That's not how loans work unfortunately, especially on depreciating assets like cars.

Just keep paying for another few years and eventually it will be behind you.

 
220k miles is a lot...even for a Honda. She'll be putting money into that car for repairs. 

You say she has a good job. If she still likes driving the Hyundai, I suggest she just work diligently paying it off. Refinance at your local credit union if need be.

 
munga30 said:
Gratefully accept the Honda and flip it for whatever $ you can.  Put the proceeds toward the Hyundai loan.  

Take great care of the Hyundai.  Use it sparingly.  Cut down frivolous use of it.  Spend your time caring for it.  

Pay a little extra on the loan each month.   This is your savings plan.  Saving for freedom.  Double check that your extra will be put toward principal.  You may have to state that explicitly w each payment.  

Last and probably least, check w Attorney General in state she purchased for recourse against predatory lending practices.  
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I like the idea of selling the Honda.  Not going to be much money from that sale; but, putting that money towards the Hyundai will help you reach your goal of paying off the Hyundai loan.  I do not see any other way around it.   

 
[scooter] said:
She's had it for "many years" but she's only been able to pay off $5K out of $18K? Must be a terrible interest rate.

If so, her best move at this point would be to get a personal loan (at a lower interest rate), then pay off the Hyundai and sell it at a loss, then make payments for the next 5 years to pay for her mistake. Hopefully that will teach her not to be dumb with money.
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:goodposting:

 
Would there be any point whatsoever to going back to the dealership and seeing how much of the loan they might forgive to give the car back?  I figure they're just going to be scumbags again but not sure how this stuff works.   

I don't see us getting much more than $2.5-3k for the Honda though I guess it would help.  

Thanks for all the pro tips here big guys I appreciate it 

 
Just tough it out, pay more/take out a personal loan with a lower interest rate, and finish paying off the car. Hyundai are reliable cars. She didn't overpay by too much if it cost 18k, especially if it's fully loaded. 

Once that car is paid off, maintain and use it until the wheels fall off. She should be able to use it for another 10+ years. 13k can be knocked out in a 2-3 years and after that she'll have no car payments for another decade at least.

 
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Ren Ho3k said:
Would there be any point whatsoever to going back to the dealership and seeing how much of the loan they might forgive to give the car back?  I figure they're just going to be scumbags again but not sure how this stuff works.   

I don't see us getting much more than $2.5-3k for the Honda though I guess it would help.  

Thanks for all the pro tips here big guys I appreciate it 
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Whatever you do, do not go to the dealership.  They will just try to sell you another car! 

Have a garage sale, sell your old baseball card collection, set up a lemonade stand and get Ice T to sit there and sell lemonade for you.  Raise some real actual cash and use it to pay off as much of the deficit so you are no longer upside down.  Once you are even you have multiple options, but until then you are at a disadvantage in every possible transaction.  You cannot borrow your way out of this.  The problem is the debt, not the interest rate.  Read a Dave Ramsey book. 

 
Tell them to "#### off", that they can have the car back and if they EVER set foot on your property to try and collect anything that they think they are owed....they better be loaded for bear. 

 
How does X a month (whispers over MSRP) sound?

I can afford that, where do I sign?

Right here! Congratulations!

:wall:

 
Ren Ho3k said:
Nothing wrong with it, it's a good little car.  It's just a huge chunk having to pay $330~ or so every month for it.  Rather have ownership of something and part ways with this thing if it were in a million years possible.
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Wow.  For $20 more a month we're driving a Mercedes.  It wasn't new but only had 18k miles.

 
Ren Ho3k said:
Would there be any point whatsoever to going back to the dealership and seeing how much of the loan they might forgive to give the car back?  I figure they're just going to be scumbags again but not sure how this stuff works.   

I don't see us getting much more than $2.5-3k for the Honda though I guess it would help.  

Thanks for all the pro tips here big guys I appreciate it 
Click to expand...
The dealership has absolutely nothing to do with the car now.

Why are the dealers scumbags?  People need to do a better job reading and understanding legal documents they sign.

The value of the car is irrelevant unless you absolutely need to sell it.  Just keep paying it off until there is equity.

 
My first car out of college car payment was $337 per month.  I put no money down.  I drove it for 13 years, 8 1/2 with no payments.  I'm missing the issue.

220K miles is not a dependable car, that's why they are always great deals.  As long as you're okay pushing it the rest of the way in to work.

 
Vanilla Guerrilla said:
My first car out of college car payment was $337 per month.  I put no money down.  I drove it for 13 years, 8 1/2 with no payments.  I'm missing the issue.

220K miles is not a dependable car, that's why they are always great deals.  As long as you're okay pushing it the rest of the way in to work.
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The problem is she could own something right now and get around just fine, albeit in something a little less trendy, instead of being handcuffed to a $300 monthly payment for 4 more years.  

Her monthly payment every month seems to be $313.52.  Am I reading this right that $41-$55 of this payment each month is going toward interest?  And the 'payment amount' by comparison is what's going toward principal?  

https://gyazo.com/ac58e2cbfe2ada15b992d43a541a3422

 
Ren Ho3k said:
About $13k owed on it.  It's not unmanageable but life sure would be easier on her- and by extension, me- if we could unload this thing on someone and just pay $5k on the loan or something.  Wishful thinking, I know.
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You have to be kidding right?  Why in the world should the bank or whomever be responsible for "her" bad choices.  Is this an EM alias?  People honestly cannot be this stupid.

 
Donkey Derp said:
The dealership has absolutely nothing to do with the car now.

Why are the dealers scumbags?  People need to do a better job reading and understanding legal documents they sign.

The value of the car is irrelevant unless you absolutely need to sell it.  Just keep paying it off until there is equity.
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Well, not every dealership is littered with scumbags and I didn't mean to paint them all that way.  But the lack of a real consumer-friendly marketplace for cars (unlike virtually every other commodity or service in existence) leads to situations exactly like this.  Getting pressured into a #### deal by a guy that knows the system better than the kid he's selling stuff to.  Her mistake was choosing new over the used market.  

https://youtu.be/uMWmYJOa-BM

 
Ren Ho3k said:
Would there be any point whatsoever to going back to the dealership and seeing how much of the loan they might forgive to give the car back?  I figure they're just going to be scumbags again but not sure how this stuff works.   

I don't see us getting much more than $2.5-3k for the Honda though I guess it would help.  

Thanks for all the pro tips here big guys I appreciate it 
Click to expand...
First, I assume her loan is not actually with the dealership.  Even if it was, it was most likely sold elsewhere and someone else is holding the note now/

Secondly, what is it exactly that you have ever heard about car dealerships that would lead you to believe they would ever do this?

 
All right, so I like the idea of taking out a personal loan.  We both have good credit so I imagine we could get something that beats the hell out of paying (presumably) $50 or so a month in interest for 45 more months.  We'll probably give this a shot.  Thank u all 

 
Ren Ho3k said:
All right, so I like the idea of taking out a personal loan.  We both have good credit so I imagine we could get something that beats the hell out of paying (presumably) $50 or so a month in interest for 45 more months.  We'll probably give this a shot.  Thank u all 
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not sure of your situation but...get the personal loan and then (have her?) pick up a PT job 10 hrs/week and apply that to the loan. It will be paid off in no time!

 
An argument could be made, if the Honda was well maintained, that you take a loan out for the delta on what the Accent is worth vs what's owed on it (sounds to be about $4500?) 

Sell the Hyundai private party, use the loan to pay off the difference to get the title -- then you're "paying" $4500 for the 2002 Honda and you're off the hook for the Accent.  

 
Ren Ho3k said:
All right, so I like the idea of taking out a personal loan.  We both have good credit so I imagine we could get something that beats the hell out of paying (presumably) $50 or so a month in interest for 45 more months.  We'll probably give this a shot.  Thank u all 
Click to expand...
What is the interest rate on your current auto loan?  Unsecured personal loans will often carry a higher interest rate.  

Refinancing auto loans is cheap right now through a credit union.  Find out what the maximum amount a credit union will refinance your loan (if the interest rate is absurd) and pay off the negative equity with cash.  It stinks, but it's a life lesson.

Dealers have an incentive to let the car buyer drive away with the highest interest possible.  It is imperative people understand their credit and  shop for the best pre approved auto loan BEFORE walking into a dealership.

 
[icon] said:
Buddy did this with an hyundai tiburon years ago.....  Went into the dealership with crap credit.... "no I can't afford $450/mo" (or whatever it was)...  they asked "What can you afford?"... He said "My max is $300/mo".

He walked out with a new hyundai on a 108mo note or something insane like that. I think he paid $45k for that $21k car. 

(All numbers are guestimates based on rough memory, but moral of the story remains intact... )
Click to expand...
Ah, he fell for the old 4 square "how much can we squeeze out of you" trick.

 
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