Should I do it?

[radfam]

I've been debating trading in my 2015 chrysler minivan.  Currently has 93k miles and the loan has three years remaining at 18% APR (yuck!!!).  Payoff is roughly 5k more than KBB value (value at 10k, payoff at 15k).  Cap1 Auto navigator gave me a preapproval up to 40k at 4.85-11.30%.  I've found a few local vehicles I like, all 2017 used vehicles with roughly 30-40k miles, and all between 6-8% APR.  That is substantially lower than my current interest rate.  Putting down $2500-3k and would be rolling the remaining that I am upside down on my minivan.  

Is this a bad idea?  How accurate is Cap1 Auto Navigator Pre-Qualification?  I have a long history with Cap1, FWIW.

[radfam]

Adding that my scores all range from 650-675 right now.  The vehicle I am looking at would have an APR of 7.29%, with $31,362 financed after the trade in value and owed on trade in are factored in.  My income alone is >$100k/yr and my spouse is pretty close to that.  The auto loan would be in my name only so using only my income for the paperwork.

[Appleman]

No one can tell you what is right for you.

You will get the standard response that you should never roll over negative equity.

One way or another you will need to pay the negative equity. I would run your 2015 Minivan by Carmax and see what their FREE buy offer is on your van. This will likely be in the ball park of what a dealer will offer you. Just wnat you to have a realistic value on the van.

[Gladius]

Wow...that's a lot of miles for a 2015!

[Anonymous]

More debt is a silly solution to existing debt. 

If you have that much to put down already, why not save a little more to get closer to even on the equity and refinance? I believe some institutions will let you finance at 120% of the value. You're close. Also check to see which value they will use in refinancing. Sometimes it's different than what you're assuming is book value.

[sccredit]

IMO I would do it.  The Chrysler (and Dodge cousin) minivans have terrible reliability ratings and I would not want to venture into 100k+ mile territory with one.  However - as Steeler points out it may not be the smartest financial move.  Ultimately you have to be comfortable with the payment and relaibility of what you are driving.  

[radfam]

Thanks everyone! There is definitely a lot to consider. I don’t like the idea of rolling negative equity either, or simply building more debt. The van does have a lot of miles for only a 2015...we live 800 miles from “home” and it’s our primary road warrior for once per quarter trips back to visit family.

As far as the vehicle itself, we’ve had minor repairs lately (window fell from broken motor in door). It also needs the struts replaced and the transmission has begun slipping. That is quite scary considering it hasn’t even hit 100k miles yet. Can I get those fixed? Sure. I know I can also use some of the DP money and just fix what I have. I think my biggest hanging point is on the interest rate. I will never NOT be upside down in this, in my opinion. I still don’t know if that’s cause for getting a new loan and newer vehicle. It’s a lot to consider and I’m not in any real rush at this point. I do appreciate the feedback so far!

[Anonymous]

Play with the numbers, because with the lower interest it may be possible to right the ship on the equity front in the long term. Most important thing is to insure you negotiate the cost of the replacement vehicle separately from your upside down trade. Your goal should be to get price down enough that you are not paying more than high retail for the car your purchasing. It may take 3 to 4 years before your right side up but as you said it might be better then never. I think the decision will rely on a good deal for the right car. Consider finding certified used, often interest rates are better and someone else has already taken the biggest hit from the initial depreciation. Best of luck!

[Anonymous]

Play with the numbers, because with the lower interest it may be possible to right the ship on the equity front in the long term. Most important thing is to insure you negotiate the cost of the replacement vehicle separately from your upside down trade. Your goal should be to get price down enough that you are not paying more than high retail for the car your purchasing. It may take 3 to 4 years before your right side up but as you said it might be better then never. I think the decision will rely on a good deal for the right car. Consider finding certified used, often interest rates are better and someone else has already taken the biggest hit from the initial depreciation. Best of luck!