Questions about being under water and needing new vehicle.

[Anonymous]

Hi everyone!

I'm new to the community, but hoping to get some help here. My husband and I are needing to get a larger vehicle. We have 3 kids (8,5, and 1--all still in car seats, well the 8 year old is in a high back booster as they are all very small for their age) and squeeze them into a Chevy Malibu. We figured spending a few hundred on car seats that would make them fit would be better than spending thousands on a new vehicle. We had originally gotten that vehicle because it was to be my husband's work car to save on gas and I was to have my SUV. Well, we weren't even done making payments with my SUV when the engine exploded and it was going to be cheaper to pay off the remainder of the balance than it would be to fix it. So, we got him a super junk car to drive and I have been driving the Malibu.  It is a tight fit for everyone, but we have made it work. Our current payment is $335 a month for it. However, I have recently started a deal with trading babysitting with a dear friend of mine once or twice a week. She has been doing substitute teaching and I am getting my license to do that as well so I can not only get back into the work force a bit since I'm a SAHM, while going back to school, but also bring in some income to help pay off our debts.  We have been trying really hard to pay off our debts and will be making a large payment ($5,000) towards them when the hubby gets his bonus in a few weeks, although we still will have a lot of work left on them. With this, it has been very difficult getting kids to and from places (plus we always seem to have kids with us--we live in a very close knit community) with the limited amount of space in my car and I think it would be best to just get a larger vehicle. Unfortunately, we are upside down. I think we owe somewhere around $15,000 and the trade in is only between $8,000-$9,000. Am I just stuck? My hubby's scores are EX--694, EQ--672, Trans--666, these are all projected to go up to once we make our debt payment to upper 600s, lower 700s according to the credit analyzer on BOA. I am not wanting a bigger payment at all, in fact, smaller would be better as we have quite a bit of debt we are trying to get rid of. Thanks for any and all advice!

[Anonymous]

what type of vehicle are you looking for? and please understand that rolling over $6k adds $160 to the payment before you even have a new payment so if you want the same payments then you need to find a vehicle for about $18k and you can't roll in that much negative equity on a vehicle that cheap. they don't typically finance more than 125%. best bet is to find a NEW vehicle (2015 with rebates or 2016 with rebates) and let those rebates eat away at some of that negative equity.
how that works is let's say there's $3k in rebates. that means you're now rolling over $3k instead of $6k so financing it will be easier. plus rebates are usually from the manufacturer so the dealership can still go lower in price on top of that.

[Appleman]

If you live near a Carmax, you could have them give you a free buy offer. This way you would have a better estimate of how much upside down you really are on the Malibu.

Finding something with rebates may help you get financed but you will still be carrying over approximately $6,000 in negative equity. 

If you were looking at minivans, getting one a few years old will likely get you some good deals. Try CarGurus.com to see what might be available in the various price ranges.

No chance of keeping the Mailbu and finding a larger car? May not work for your current situation, just throwing out some potential ideas.

Goos luck and let us know how things work out.

[Anonymous]

^ your older minivan is good... except with that much negative equity it's unlikely you could get a good enough deal to roll over that negative equity. and the rebates eat away the negative equity... not still roll it over.

just buy gap and roll it. you will eventually have to pay it off one way or another so you may as well let the rebates help you. just don't trade in that vehicle until it's paid off or close to it. whatever you buy needs to be the last one you buy in the next 4-6 years.