You Are Now Upside Down In Your Car: DON'T DO THIS!

Today I talk about negative equity and what not to do if you are upside in a car loan!

[jeffotoole]

I wonder how many Tellurirde owners that paid 20k over just realized that they bought a Kia at 20k over. Lol. A Kia! A Kia! A Kia!!! 20k over for a Kia. People are so dumb

[rayemanuel]

I own a 2004 Toyota Corolla with 160K miles on it as well as a 2012 Toyota Corolla with 165K miles on it. Both paid off and run like new. Gives me the flexibility to invest, save, and travel. Can't ever imagine owing money on a car again.

[garynapoli]

“Owe the bank $100 that’s your problem. Owe the bank $100, 000, 000 that’s the banks problem.”.

[narutobrown]

I’ve been waiting to buy a car, but if I was in the situation I would keep the car and slowly pay it off. If I got myself in that mess I should be the one digging myself out.

[leonb]

Too often dealers and lenders decision makers make the deal no matter what to get the commission or other incentives from the loan or from selling the car. That was factors with the 2008 Crash. They will also do loans to include dealer add ons, additional dealer markup.

[tubewacha]

Banks and consumers were out of their minds last 2 years

[FeuerhammerX]

If you're underwater on a car loan, the best option is to suck it up, and pay it off as quickly as possible. You will almost always lose by trading it back at wholesale, and if you write it off, the insurance pay out will be less than your loan, so you'll end up continuing to pay for a car you no longer own.

[dystopia-usa]

Can't imagine why anyone would ever pay over MSRP for a vehicle, finance for longer than 60-72 months tops, or believe that a monthly auto payment that exceeds 8-9% of their individual monthly income is a sound financial/budgetary decision.

[mrpips]

Having negative equity doesn't mean anything until you try selling the asset. If it's a vehicle you're going to keep for awhile just keep paying on it and ignore the value. Best practice regardless of equity is to always pay more than the minimum payment and pay off loans early.

[nfoster]

Ending point makes sense, but I am in a position my car doesn't run, and I have a rental car right now.
I purchased my 2017 Kia Soul in 2021
It will cost $7, 300 to replace the engine on my Kia Soul since the timing chain went out, pcv valve needs to be replaced, and other things, and I still owe around $5, 600 on it which means taking out another loan on top of the current one which in my opinion is more risk, because if something comes up with it again, that's more money wasted

[dennisgm]

Great feeling to have the pink slips to all my vehicles. I prefer no payments over the latest greatest truck or car.

[whodat]

Banks are almost 100% at fault here. If a person can’t afford an overpriced vehicle cash, they won’t buy it. If a bank won’t lend them the money knowing it isn’t worth it, they won’t buy it. In both of these cases the dealer will have to lower the price or eat the loss. But if the bank loans someone the money and they buy it, the dealer keeps the prices high and the buyers don’t get a choice.

[heavyelement]

here's my situation. i bought my car for $25K, it has almost 200K miles on it now and was recently hit by a dump truck and totaled. now it is paid off so I'm taking my payout from insurance which is really great IMO, and buying a slightly older car with very few miles on it outright for cash. I'm not the kind of person that needs to have the the latest gadgets in my car.

[mikemccormick]

In a normal economy, cars are depreciating assets. So everybody is upside down with their disposable cars. More so now maybe.

[rntt]

Not me. Bought a 2003 Pontiac Vibe from a single owner old guy a few years ago for $1, 400. It's saved me tens of thousands of dollars in car payments.

[CarolinaCarolina-phmx]

Whatever your payment is, try to throw even more money at it each month. If you can do an extra $100, $50, or even $20, it will help. A big chunk of what you pay in the early years is interest, so if you pay more towards your monthly payment than agreed, that extra amount of money is money that reduces the PRINCIPLE - you know, the actual amount you borrowed.

[CommanderCronus]

The thought of being upside-down on a used car is terrifying.

[michaelmcmurphy]

Regardless of markets feeling the NEED to buy a new car always kept me broke. Now, with a 2006 Chevy 2500HD with 270, 000 miles and obviously paid off, I laugh at these struggles watching people buy the Chargers, Teslas, and not forecastinglife events as it pertains to where they are.
I’d rather pay $2500/yr in maintenance than a $1, 200/mo car payment.

[loverjoeyable]

It does make a lot of sense, thank you, yeah keep the current car and deal with it work two job or something to pay the car off, keep loving it the one you purchased although you felt how stupid you are to make a monthly payment that cost you double or triple in the end of the actual car price, yes It’s hurt when you realized how dumb you were, but when you signed the contract you are down there is nothing you can undo. It’s horrible feeling you will face it till you pay them off, 5, 6, 7 years from the day you drove the car home and showing up to your neighbor. Hopefully you will hit the fortune or winning the lottery so you can pay it off sooner and buy the next expensive one, just use the first experience to avoid such a horrible experiences due to stupidity or unknowledgeable after all we all made mistake some time in our lives

[williamstevenson]

I bought a new truck in April 2022 and sold it for personal reasons. And I absolutely regret selling it. I paid MSRP and got 2.14%. What was I thinking when I got rid of