cancel
Showing results for 
Search instead for 
Did you mean: 

Need help with trading in a car that's 8k underwater

Auto Loans for ANY Credit Situation. Immediate Response.
Advertiser disclosure
New Member

Need help with trading in a car that's 8k underwater

Hello everyone haven't posted in a while but I'm currently wanting to trade in my 2012 fusion that's co signed and start new on my own. Only problem is I owe 11,000 and kbb says the cars worth 3 to 4 thousand. So I'm pretty negative at the moment. The cars got over 100,000 and giving me issues left and right and just dont want it anymore. Can anyone give me some advice on how to handle this problem?
Message 1 of 7
6 REPLIES 6
Senior Contributor

Re: Need help with trading in a car that's 8k underwater

Welcome to the forums - I'm not sure how you got into a loan that has you owing $11k on a 2012 model year 100k mileage vehicle, but it sounds like you are paying dearly for that choice. You can maximize your return by selling it directly rather than trading it in, but with "issues" that's not going to be easy. Most dealers will play with the numbers (discounts, rebates, etc) to get an underwater vehicle rolled into a newer vehicle, but that will just delay the lack of equity and probably put you further behind the 8-ball. 

 

The best advice I can give you, and I'm sure it's not what you want to hear, is to double up or triple up on your payments to get the loan balance down at least to a break-even trade in range. If you just roll the negative equity into a new loan - assuming you can find a lender, the payments are going to be higher and your interest rate is going to be high too - that's a disaster that'll haunt you. 

Message 2 of 7
New Member

Re: Need help with trading in a car that's 8k underwater

Well I've had the car loan for 2 years now the original price was 16k but like I said now its 11k. I have a approved 16k loan right now but I dont know if that will help any.
Message 3 of 7
Valued Contributor

Re: Need help with trading in a car that's 8k underwater

You'll have to look for something with massive rebates right now.  It won't so anything to get rid of the negative equity, it will only make a new car approval easier.  

Ch 7 Discharge 3/12/2018
Cap One QS1 $3,500, Wayfair $5,000, Blaze MC $3,000, Kohls $2,000, BBVA $2,500
Infiniti Financial lease

Message 4 of 7
Valued Contributor

Re: Need help with trading in a car that's 8k underwater

Another option if you can afford it, just go buy a second car. When you get even on this car sell it.

Message 5 of 7
Frequent Contributor

Re: Need help with trading in a car that's 8k underwater

Sounds like you bought a used car on a 6 year loan.  Never do that unless you have a really low interest rate where you make more investing the money than paying it off.  Long term loans will cause your situation where you remain underwater on the loan for a large portion of the loan period and seem designed to keep you in that loan while paying all that extra interest.

 

You may want another car, but make sure you can afford a much shorter period on whatever you get.  I personally prefer 3 to 4 year loans, only going longerwhen I get a really low interest rate like I mentioned above.  Usually the temptation to get a longer loan is killed when I look at how much extra interest I'll pay over the entire loan period.  If that is the only way I can afford that vehicle, than I start looking for a cheaper car as I'm clearly buying more than I can afford.

 

I would not rollover the loan when you still owe more than half what you paid for a vehicle.  You'll be even more underwater on the new vehicle than you are on the existing one and if the same thing happens, you'll be in even worst shape to deal with it.  I would recommend making larger payments to reduce what you owe on it by about half before trying to sell/trade it.  Also, interest rates have been going up over the past year and I don't see an end to that.  So unless you have better credit than you had before, you'll likely be paying more in interest on the new loan which would incline me to keep my existing one.

You also may want to look for a cheap 2nd car that is reliable and buy that until you get your existing one paid off as it gives you something else to drive when the existing one has issues.  I know there are cheap reliable cars out there as last year I sold my last vehicle to my brother for $800 since that was what the dealer wanted to pay me for it.  But it was a very reliable vehicle and my brother is totally happy with it. 

Current FICO8: EQ:777, TU:754, EX:761 | 2x 30 day lates 4.5-6yrs ago
AAoA: 10 years; AAoOA: 13 months; Credit Length: 21 years
INQ Eq: 3 / Tu: 5 (4 for auto) / Ex: 9 (5 for auto)
Message 6 of 7
Established Member

Re: Need help with trading in a car that's 8k underwater

I owe $17500 on a 2013 toyota avalon limited hybrid with 162k .....trade in is $7500

its all relative

Message 7 of 7
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.