Getting rid of car payements?

Question

Two years ago i purchased a 35k car I put 5k down and got 2k on a trade in. I've made 400 dollar payements a month for the past two years and the payements are to much for me to handle anymore. The car was appraised at 8k but there is still 18k left on the loan. i have tried selling it but have gotten no offers near 18k. how do i get rid of this car and still have money left to get another car

Answer 1

Looks like you have put minimal down or no down when you purcahased your vehicle.  The SUV's and domestics are hurting right now since 3 months ago they drop the value by 35%.  

There is a couple of ways which is illegal to get roid of your car.  Dump it in the Mexico border or have it stolen somewhere.  1 out of 9 people are falling in your category.  I know because I work at a dealership.  

Answer 2

You can't.

You owe more than the car is worth. You are "upside down".

As you have found - a seller is not going to pay the amount of your note. A seller will pay the fair market value of the vehicle. If your car is a truck or suv then the high gas prices would have a lot to do with it's value dropping so much. Unfortunately, a lot of suv/truck owners have found themselves in the same spot.

If the car were to be a total loss -- the insurance company does not pay the amount of your loan.  They pay only the fair market value of the car. So even if the car burst into flames (or as a prior poster suggested -- was stolen) -- you are still in the exact same hole you are in now. Owing much more than the insurance company would pay. If the car is worth 8K. That's what the insurance company pays -- not 18K.

If you have been a good customer - the bank may do a substitution of collateral. You would have to have another car/asset that you could put up as collateral for the current car loan.

You may want to talk to a loan officer at your bank. Like the mortgage crisis - I am sure they are seeing more of folks in your situation. See if they can work something out with you.

A word of warning - even if the car is repo'd - they bank will sell it for what ever they can get and still hold you responsible for the balance of the note.

Other than that -- just keep the car and keep making the payments. I know money is tight - but if you can send a little extra on the payment each month - it will help to bring the balance of your loan down faster.

Good Luck.

Answer 3

You're not going to. You have too much negative equity in the vehicle and it will be virtually impossible for you to get rid of it. You owe 10k more than the car is worth. Figure out a way to handle the payments. Get a second job, cut back in other areas.

Answer 4

1. What car did you buy for $35K TWO YEARS AGO is worth $8K now?

2. This is why you buy cars used

3. There is nothing your really can do. No one is going to let you roll $10K of negative equity on a new loan. Also, if you let the car get repoed then they are going to auction it off for like $6K and you're going to end up owing the bank the difference(plus fees).

4. This is why when you buy a car you make sure you can easily afford it. If you're spending $35K on a car you should be making well over $80K per year.  

Answer 5

Call the bank and try to do a short sale or a title in lieu of a repossesion.  If your credit suck, this will work.  Also if your credit sucks, you can just stop making payments if the bank will not agree to this.  Then they will repo your car.  They could get a deficiency judgment, but if your credit is bad, you really do not care.  If you care about your credit, you have to pay for the car.  

Answer 6

You can't.  You owe more than the market value of the car, so no one is going to buy it.

The best thing to do if you can swing it is get a second job and accelerate the payments.  Every dollar you pay above the normal payment goes directly to the principal amount.  Pay it off and drive it as long as it will start and run.  That's the only way you'll come out ahead of the situation.