[PalmerGA]

Originally Posted by thegreatwhite

so is it safe to say that being "upside down" on a car loan is only bad if you want to sell the car or have an accident and your insurance only pays for the "value" of your car which is lower than what you still owe on the loan.

I can assure you, being upside down on a car loan is NEVER a good thing. First: if you're upside down on a car loan, you couldn't afford it to begin with. Second: if you can't provide a down-payment that will cover tax/title/license expenses, you couldn't afford it to begin with. Lastly (and this is the real killer), if you have to finance the payoff on your trade-in, you couldn't afford it (or especially the new car) to begin with.

OP, I assume you are fairly young (no offense to responsible young car owners). If that is the case, NOW is the time to straighten out your finances. Bite the bullet NOW and keep paying on your present car until it is at least worth what you owe on it (preferably more). Rolling over loan balances onto new loans will KILL YOU in the long run. You may NEVER be able to recoup if you continue to live on the financial edge. Cut your losses now (or as soon as possible) and you will be MUCH better off down the road, when you are looking for a home, second vehicle, etc.

**NOTE: I am not a financial advisor, economics professor, or the like. I learned the hard way. Been there.... done that. I was upside down on several vehicles in a row up until some 25 years ago. Finally kept one long enough to get even on the new loan, paid extra on the premium, and paid the car off early. Traded and added some cash for the next car and have been paying CASH (+ trade in) for every vehicle for the past 15 years (3 vehicles in all). NO PAYMENTS from the get go. It's a very liberating feeling. Good luck.