Upside Down Loan

[Anonymous]

I am currently upside down in an Bridgecrest auto loan. I owe 18k and my car's blue book is a little under 10k. My payments are around 470 with a 15% interest rate. My middle auto Fico 5, 4 & 2 is 510, Auto 8 519 and 9 is 513. My husband does not have a car loan, nor does he have one on his credit at all. His credit is "good" as he has been establishing it for about a year with no late payments, a couple credit cards and furniture accounts. I make more money than he does. 

With that scenario, what are the best options to get rid of this car and get the SUV our growing family needs? Do we trade it in and roll the balance into a new loan? Do we try to sell private owner? I'm stuck. I just signed him up for an account on this site but don't know his Fico score yet. (Vantage is 699 but I know that probably doesn't mean much).

Thank you in advance for your input. 

[Harvey26]

@Anonymous How much time left on loan? Whats holding your scores down? I would trade it if you can find a good truck with good rebates to kill the negative equity GM and Ford are known for this if not then try paying it down some more. 

[incognitony]

Car prices are crazy right now. I would recommend getting a quote from Carvana, Vroom, and Car Max on your car to see how upside down you actually are. 

[kilroy8]

Auto and Real Estate markets are super heated right now. I would not buy either a house or a car until things simmer down a bit. Give it six months and then look around.

[Anonymous]

What's keeping my scores down...I started this journey a couple years ago but messed up on a credit card and 2 late payments on my car during COVID. Was doing really well until mid last year and they dropped again. I have 4 years left on the loan. I also have a child support order that I cannot fulfil the entire amount on monthly. I pay a portion every month though. 

I will look into your suggestion. 

[dunn2500]

you will get absolute top dollar for your car right now but will pay top dollar for SUV too most likely.....

[Harvey26]

@Anonymous I would honestly wait at least a year if you can and let your lates age and try to reach out and goodwill them and see if they will remove them and just continue to garden and help build and age your husband profile. 

[Anonymous]

Sell your car now and wait six months for the market to correct before buying a new SUV.

[jchester]

I apologize, in advance for the book..
So, a couple things, 1) you most likely will need to make extra payments to beat the interest rate (on your current loan).  That is, pay down the principal faster until you reach the break even point on payoff vs value.  2) I'm guessing there's a warranty (CANCEL IT immediately!  Send a certified letter (per their cancellation policy, IF the dealership even provided it) - PROMISE, they will not f' with you).  3) Too many of us undervalue our vehicles (as per KBB.com).  So, if you're in that bunch, you're vehicle may be worth more (in this market).  4) 8k is A HUGE HURDLE.  I won't sugar coat it.  You let that stealership do just that - steal years of your life.  Alas, I've personally been there (re: predatory lenders..  2, 3 or 4 of them).  Just being on this site, you're already ahead of the game.  Just acknowledge where you are, and where you want to be financially.  4) Find a vehicle with GREAT resale value (ie. Jeep Wrangler, Honda or Toyota) and get a pre-approval with a lender at a GREAT RATE.  Anything sub-15% is better than what you have.  Sub-10% would HELP you pay off your loan exponentially faster.  Wish there was a silver bullet, but fixing this will take work and dilligence.  I wish you the best of luck!!

[Gladius]

---

@Anonymous wrote:

Sell your car now and wait six months for the market to correct before buying a new SUV.

---

What is she supposed to drive in the mean time?