What are my friends options when he cant afford monthly car payments?

Question

my friend bought a car, he put a 70k down payment on it and financed the rest,which was probly like 30k.which is to be paid off in 2 years i think.but now he cant afford his monthly payments.the payments are a tleast 1k a month.to date he paid about 80+k and owes about another 20k,he already missed 2 payments he dosent want to lose the car and the money,can they take the car and he will lose all the money he put into it? can he refinance?to make smaller payments per month and pay off the rest in more then 2 years? or just sell the car if he can intime? what kind of options does he have if any?

Answer 1

He can sell the car for one.  he won't lose everything, but that depends on what the car is worth.  If it's worth $30k, he'll at least have $10k leftover after the sale.

But yes, they can certainly repossess it for missed payments.  Or he could try to refinance with another company, although it may be difficult to do so being more than 60 days late on his current auto loan.

If it's me, I sell the car as soon as I can, bring it to Carmax if I have to.  Then I take whatever money is leftover and get into something MUCH less expensive.  Clearly buying a car that expensive wasn't the wisest financial decision.

Answer 2

He can contact the company and talk to them about his financial woes. It's not uncommon for an agreement that works for everyone to be reached. They would rather have a little more money than no more money.

Answer 3

What kind of fool spends $70K on a car they know they can't afford.

Your friend has one option. Sell the car.  Before the bank comes and gets it and he loses everything.   He has plenty of equity in it with the large down payment.

Answer 4

Let me get this straight, your friend bought a 100k car, but 70k down and can't afford the car payment on the other 30k?

He can sell it if he did put 70k down. The amount he gets for the car should pay off the note.

But yes, he can refinance the car note and get a lower payment. It just depends on the car, his financial info, and this credit.