Went to the dealership this morning for some routine service on my Jeep Cherokee. While I was waiting in the lobby, one of the salespeople came up to me and asked me some questions about my vehicle (including if I still owed on its loan) and if I might be interested in trading in toward a new car. I politely declined, but now all day I've been thinking about how appealing that sounds! I had filed BK7 in Dec 2018; I was allowed to keep the Jeep since my remaining loan balance was still pretty close to the depreciated value of the vehicle. I did *not* reaffirm the loan (which was through a CU), but I've been keeping current with payments. As of today, I owe about $9200 on the loan.
Just to see where I'm currently standing, I ran a pre-approval through Carvana -- they've offered me terms of 8.9% APR with as little as $0 down over 72 months, which admittedly is not awesome but frankly is better than I was expecting. I also got a trade-in offer from them for about $12,000 on the Jeep, which coupled with the outstanding loan would end up being $2800 TIV toward a new loan through them. So that's all well and good... I haven't decided if I want to push forward now or wait a little bit longer, but because of my situation with the original loan being IIB and not re-affirmed, I wasn't sure if this is even a possibility for me and if I need to just wait out the remaining 2.5 years on my original loan and own the vehicle free-and-clear before I can trade it in.
I know there's a third option since I didn't reaffirm -- just stop paying the Jeep and let the CU repossess, and take out a new loan without a trade-in -- but I feel for me that is a method of last resort, and since I'm not underwater I'd like to use the TIV toward the new loan if at all possible.
[EDIT: fixed typos]
Check Cap One SP prequal...
Thanks for reminding me to try the CapOne pre-qual link. When I did that, I was pre-approved for new-vehicle loans at better rates (high 6% in my case) and opened me up to dealerships instead of just Carvana.
In response to my own question about the trade-in vehicle that was IIB, I was able to confirm with a person in the CU's collection department that it would be permissible to trade in the vehicle toward a new one as long as the dealership was going to pay off the original loan. However, the concern in my case was that the PLOC I had with that CU that had also been IIB *could* be used to invoke their cross-collateralization clause that would prevent them from issuing the title to the dealership. The collections person made sure to emphasize that they were within their rights to do so if they chose, but she made the decision to allow the trade-in so that I could go ahead and get the new vehicle. And, if I'm being frank, probably also to get me out of their hair and off their books while ensuring that they got the full amount due on the vehicle, since she also informed me that I would not be able to do business with them again due to the loss incurred on the PLOC. To which I say, fair enough.