Upside down on two car loans

[Anonymous]

Just trying to see what my options are at this point:

I owe about $18k on my car which is worth about $14k as trade-in, so I'm about $4k upside on this car loan.

DW owes about $13k and her car's trade in value is about $9k so she's about $4k upside down too.

We really only need one car, since I ride the train to/from work and we would love to have only one car payment instead of two.

My FICO8 score is 641, I haven't pulled up my Auto FICO score yet but I had one car CO'd/Repo'd in August 2010

What are our options at this point?

[StartingOver10]

What is the private party sale value?  Have you tried to get an estimate from Carmax to buy one of the vehicles?  What is the make, model, year and milage?

[ds3]

Sell one of them privately, add whatever you have to to make up the difference, and pay off the loan. It's pretty simple...take the hit now, or keep paying for 2 cars that will ultimately cost more in interest.

[Anonymous]

Car #1 - 2014 Nissan Sentra 3,500 miles

Car #2 - 2013 Kia Rio 47,000 miles

[ezdriver]

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@StartingOver10 wrote:

What is the private party sale value?  Have you tried to get an estimate from Carmax to buy one of the vehicles?  What is the make, model, year and milage?

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I agree. Trade-in values are WHOLESALE numbers as dealers will resell that vehicle for a profit. private sale is the best way to go. Carmax will give a number between wholesale and retail ... but the car has to be in nice condition to get closer to the retail with them.

One other option is to search for someone to take over the payments ... with the current loan company approving them.

[StartingOver10]

Be very, very cautious if you attempt to have someone take over your payments. Lots of scams involving this very thing.  You are safer selling one of the vehicles as discussed earlier and bringing in the difference in cash. Much less difference on a private party sale - maybe none especially since you have a virtually brand new vehicle with extremely low miles.

[Anonymous]

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@StartingOver10 wrote:

Be very, very cautious if you attempt to have someone take over your payments. Lots of scams involving this very thing.  You are safer selling one of the vehicles as discussed earlier and bringing in the difference in cash. Much less difference on a private party sale - maybe none especially since you have a virtually brand new vehicle with extremely low miles.

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How does a privately sale work, since we don't have a title to either vehicle? I understand we would be responsible for the difference betwen the sale price and the payoff amount, I'm just not sure how that process works?

[Anonymous]

The dynamics have now changed, DW totalled her car in an accident. She is OK but the insurance company declared it a total loss and picked up the car for salvaging. It appears that GAP insurance will cover most of the negative equity on the Kia Rio.

Since we only need one vehicle, we are not planning to replace hers and we'll just keep my Nissan Sentra

At this point I'm considering the following plan:

- Open an account with DCU and perhaps get a credit card from them (My FICO 8 is at 659)

- I have an auto CO scheduled to fall off July 2016 and my BK falls off soon on September 2015

- I will wait until BK to fall off then apply for auto refi with DCU 

Based on what I'm reading in this forum I could get a much lower APR with DCU (I'm currently at 12.99% with Cap One)

With a lower APR I could keep making the same monthly payments ($420) and pay the loan faster

My score should also increase over the next couple months as I'm paying down my credit cards (currently at 51% Utilization)

Any thoughts, comments?

[Anonymous]

Glad DW is Ok, sorry about the accident.

Very fortunate you had the Gap insurance.

Your plan to stick it out with one car and refinance when your scores are better seems like a good idea to me.

As a side note, have you verfied you have the Gap insurance on the remaining car?

GL

[Anonymous]

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@Anonymous wrote:

Glad DW is Ok, sorry about the accident.

Very fortunate you had the Gap insurance.

Your plan to stick it out with one car and refinance when your scores are better seems like a good idea to me.

As a side note, have you verfied you have the Gap insurance on the remaining car?

GL

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Yes thank you, I double checked my GAP coverage. I will probably ask for a GAP refund when I refi.

I originally purchased overpriced GAP from the dealership for $750 for 72 month loan, the GAP cost was added to the loan amount so I've been paying interest on it.

I can probably get a better GAP premium from DCU