Any idea how to get out of an underwater vehicle?

bartoe · ‎03-04-2016

My husband and I own a vehicle that we owe $18k on. We have GAP insurance so if the vehicle is totaled we pretty much won't be paying out of pocket (we also have something through our auto insurance as well to help cover the gaps).

We initially contacted the credit union that it's financed with and they pretty much won't do anything. Heck in order for us to reamoritze it we needed abut $5k to put down on the vehicle! They refuse to refinance the vehicle into my name (never applied but when we explained to them that we wanted to move it from his name to my name they told us they don't "do that sort of thing".

Our payment is $332 and we are trying to get rid of the vehicle. Dealership will give us $11k which puts us at -$7k negative equity. I've been thinking about putting it up on CraigsList and a few other places so we can get rid of the vehicle and buy a much cheaper/reliable vehicle.

We also would be happy to refinance it elsewhere and pay a lower payment (if we can). It's just frustrating! I hate how some credit union's will work for you and others won't!

StartingOver10 · ‎03-04-2016

In my experience it is rare for a lender to refi their own loan from a higher interest rate to a lower rate. That is why you would need to go to another CU or another lender for the refi. Are both of you on the title or just your husband?

Gmood1 · ‎03-04-2016

Was the vehicle in question bought with a trade in that had negative equity? You can either try to sell the vehicle on your own or just suck it up and pay it off.

If you trade the vehicle in, it will snowball the negative equity and return to haunt you when that vehicle has worn out its welcome.

Another bank or CU could be an option. Though you still may have to come up with a down payment to bring the loan right side up.

IMO unless the vehicle is a lemon, just tough it out and pay this one off as fast as possible. For the next vehicle do your best to keep it out of negative equity by not rolling a older loan into it. If that was the case. Or save for a substantial down payment on the next vehicle.

The dealer will always lowball you on a trade in. Then roll that amount you still owe into the next vehicle. You'll never recover if this is done. And you'll always be upside down on any vehicle you buy.

settleordelete · ‎03-04-2016

I see two options here: Keep the car and finish the payments or sell it and borrow the difference to pay off the loan.

I've been where you are trying to go and I don't wanna go back.

Anonymous · ‎03-05-2016

Why need to get car out of husband name and only in yours? How old is vehicle? You know if you get rid of this car and get a new car you will be negative again? I will say just keep it and drive it depending on situation of why want to get rid of

C7LT1 · ‎03-06-2016

The cheapest way to get out of this vehicle is to sell it for top dollar to a private buyer and borrow the difference to payoff the loan.

Don't go off KBB or NADA value look at the used market and price it accordingly.

If the difference is too big then pay down the loan and sell or trade it when you can break even.

DONT ROLL IT INTO A NEW AUTO! It will put you deeper in the hole.

Sorry to say but whatever you are trying to do may have to be put on hold.

In the garden until June 2018

Bankrupt2019 · ‎03-06-2016

As an added point, you're probably going to have a tough time selling it considering the bank holds the lien and title on the vehicle in question. they are not going to release the title until the loan is paid in full.

Chris679 · ‎03-06-2016

@Bankrupt2019 wrote:
As an added point, you're probably going to have a tough time selling it considering the bank holds the lien and title on the vehicle in question. they are not going to release the title until the loan is paid in full.

You mean you would give someone your money for a car if they promised they were going to take your money and go pay it off? What if they pinky swore?

OP you need to buckle down and pay it off, there is no shortcut.

Bankrupt2019 · ‎03-07-2016

@Chris679 wrote:
@Bankrupt2019 wrote:
As an added point, you're probably going to have a tough time selling it considering the bank holds the lien and title on the vehicle in question. they are not going to release the title until the loan is paid in full.
You mean you would give someone your money for a car if they promised they were going to take your money and go pay it off? What if they pinky swore?

OP you need to buckle down and pay it off, there is no shortcut.

well, maybe if they pinkie swore I would consider it

dfitzg · ‎03-07-2016

Im in the the finalizing stages of a Refinance now. I went into my loan upside down at a high interest rate a year ago ( Bad trade and bad credit).

My solution to get out was to find a lender that would refinance for the max amount (in my case 120% of the retail) and pay your balance down to that number.

It seems to be working for me not sure if this might work in your situation.