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Upside down car payment

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Anonymous
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Upside down car payment

What would be the best options to get out of this car if possible.  I have an upside down payment -$5, 000...my interest rate is 1.99; the car is a 2013 Encore Buick, with 24000 miles, I purchased it with 16000 miles  in April 2014.  I've  had a few problems with the car, battery died, brakes sound like the pads were bad sometime; service rep claim a pebble or something got in the rotary; car stopped recently; service manager claims steering wheel probably locked it.  Dealer assured me it was nothing.  My interest is relatively low 1.99%;  60 months of payments (excluding the ones I've paid up to this point). In retrospect I now know it was a bad deal from the gate.   I feel if I am having issues now it going to get worst as time goes on.  The dealer tried to offer me a lease and/or another car 2015 with higher payments.  No way was I going to let me sucker me again!

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2 REPLIES 2
SamsungHDTV
Established Contributor

Re: Upside down car payment

Yes it looks like you got a really bad deal on the purchase price. But your interest rate is good. Its so easy to mark up used cars because comparables are sometimes harder to come by.

 

First option is to stick it out and hope for no more problems. Second option, trade it in but you will lose financially. Dealer will buy under what its valued, and then you will pay mark up on the new car.

Message 2 of 3
StartingOver10
Moderator Emerita

Re: Upside down car payment

Agree with prevous poster, best thing to do is to stick it out for now.  Trading your vehicle now is jumping from the pan into the fire IMO. Good thing you didn't fall for the dealers "solution" to come back and get deeper in debt! You have good instincts. Most of us had to learn this the hard way too. The only good thing about learning the hard way (life experience) is that you won't ever forget it and all your future deals will be much better deals because you will know where to look for the tricks and traps.

 

I also think you might want to find another mechanic - someone that you know and trust. If you don't have one, check with friends and family to see if they have one. Don't bring it to the same dealership where you purchased the vehicle. If they have a warranty, see if it will be honored elsewhere. If not, get a refund on the warranty. That will help with some of the negative equity.  Also, can you make additional principal payments on your vehicle? That will also help to get rid of the negative equity. One more suggestion, check private party value of your vehicle. You might be in a better position than you think. If you are even or nearly even, consider selling it yourself private party and start fresh with a new(er) purchase somewhere else. Otherwise keep it until you have actual equity.  

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