Upside Down Loans

[Kens ss]

Originally Posted by thegreatwhite

i just dont see how it could be considered a bad place financially to be upside down if your not selling the car. if you keep the car that difference between the value and the remaining loan never matters unless in a sale or total loss

If you are comfortable making your payment, and don't plan on ever selling and if you are okay in the event of a total loss not covering your loan. Then absolutely in the end you have the car you wanted, had fun and is finally paid off.

But the OP is seeking to sell or trade for new, and is already 7000.00 plus upside down.

I like to think I an financially responsible, but I sometimes question my own sanity, of carrying a loan for what is a third car just for fun and has to be parked 6 months due to bad winters? But I justify it to myself that i bought right (below loan value) put some cash down and have equity...and would probably never have the expendable cash to buy a toy like this in cash.

But it is comforting for me to know, that if I got tired of the car, the payments, or lost my job, I could easily get out from under it.

As with any debt, if you are comfortable and happy with what you bought, then why not?

[pyroguy]

Originally Posted by thegreatwhite

i just dont see how it could be considered a bad place financially to be upside down if your not selling the car. if you keep the car that difference between the value and the remaining loan never matters unless in a sale or total loss

I'm weird and proud of it, I hate all debt. Being upside down or in debt in general is bad. Forget the trade, forget the payments. The best place to be is debt free and that includes car loans. Buy a vehicle that you have saved up for and paid cash for. You'll take much better care of the vehicle and only buy exactly what you want and not settle.

Now the "norm" is to have car payments. However, if you owe more than your car is worth in the event that you want/need to trade it in for something else that is where, financially speaking, you are in the worst shape regarding that vehicle. If you are not wishing to sell/trade you vehicle in then as I stated earlier, IMO all debt is still bad, but if you need to get out from under the car then it is better off if you are not left with a bill afterwards.

It appears that the OP panicked and got into a loan to quickly after his vehicle became deemed a total loss and impulse bought instead of thought through exactly what he wanted (unfortunately been there done that). It is hard to believe that someone is $7,000 underwater one year later unless they overpaid initially or refinanced their loan somehow, or got a payday loan, or title loan.

[erickangulo]

I was $6k upside down when I traded my 2014 ls for the SS. No money down, and made up by getting $700 back from GAP and $2k from the extended warranty. Got the SS for $33k. They'll finance you, but you should probably wait unless you're getting a super killer deal.

[thegreatwhite]

ya i can definetely see how it would be better just in case of anything happening to have no debt. i dont have the money to pay off my car yet hopefully il get there one day. i think the OP in this example should keep the car until paid off i dont think rolling debt around to new loans would be good long term

[babymandm]

Let me explain my situation in more detail. And just for the record, I am female, not male...lol.

My 2010 did get totaled and I LOVED that car. I would've kept it forever if I could've. I'm not one to switch cars all the time. As I was saying, it was totaled and thankfully the remaining balance on the loan was covered and I had a small amount left over and I mean SMALL. I was pinched for a car, I wanted a Camaro, never owned anything but Camaro's since I was 16 years old. I waited for about 2 weeks before I got the 2014. But I was trying to get rides back and fourth to work from family, friends, neighbors, etc. It was rough and I needed to get something. I got a good deal on the 2014 and figured I better go for it, I really didn't have a choice, nothing else available that I seen and I never had a brand new car, so I did it. I had a few hundred for down payment but all other costs were in the loan. After the first month I hated this car. Don't get me wrong, it's not a bad car and it is a Camaro, but I just don't care for the changes that were made to the body on the 14/15. I wanted to trade it in back then but I knew it wasn't an option. I kept it in the garage all winter, it was a bad winter last year here. And the past month or so I just want to trade it in. I really want a 2013 Convertible SS. I've spoke with so many dealers and they lie to me and tell me they'll call me back and I never hear from them. Or they tell me my car is worth less than what I think it is. I can't understand how a car I bought brand new in July of 2014 could only be worth about $20,000 now. One dealer told me only $17,500. Which I think is a slap in the face. I know they're trying to take me over. Another dealer said oh we can help you, they said they had someone who bought a new car and traded it in 3 weeks later. But yet I never heard back from them and I've had my car for over a year? Just irritates me that other people have done what I'm trying to do and nobody seems to be able to be honest with me and help me. I came to the decision to make extra payments on the car and hopefully be close to where I want to be in Spring but I keep looking online and seeing cars and it irritates me. I just want to be happy and have a car that I want. And once I get this car, I will keep it forever. I am a person who won't stop until they get what they want and I have no patience so waiting until Spring or longer is killing me. And I did take the loan out for 84 months. They gave me a very low interest rate and I couldn't resist the deal. I have been paying extra on the loan since I got the car but only about $20.00 extra. Now I wish I would've done more sooner. And I can afford to do extra and I don't have bad credit or anything like that. I appreciate what everyone is saying, it helps and makes me feel better that others have been in my shoes. I like hearing everyone else's experiences and advice. Thank you.

[Trifecta23]

This is all you need to know.

http://www.nbc.com/saturday-night-li...y-stuff/n12020

[Kens ss]

Okay, I think you cleared up some confusion. So you did put some money down and did not roll over another loan into this one.

When you say you are upside down, you mean that you are being offered less than you owe. Am I correct?

Did your loan include any of the bs the finance guys try to add on like clear coat protection, extended warranty, etc? Because if they did that money and of course tax, title and license, cannot ever be recovered.

Now with that said, It does not appear that you know truly what your cars value is, other than the low ball offers.

Here is what I recommend, Google NADAguide.com then search used car value, by entering your car year, model, miles, packages, etc. this will yield trade in and retail value. The retail value, is the amount a bank will loan (yes they use the exact same search)
take the retail value, and compare it to what you owe. This is a fairly close value of your car.

I guess I am trying to tell you your car's value cannot be based on dealer lowball trade in values.

It probably stands to reason you may have no equity since you bought new just Last year. But you may not be as 'up side down' as you think you are.
If your car is extremely clean and low miles, I would not accept any dealer offer less than $2000.00 or more from the retail nada value.
Selling privately, you can possibly get very close if not all of the retail value.
But if this your only car if you sell you would have to scramble to get another.

You most likely would still be better off paying down a couple years first though
Edited:
I did a nada search based on a 2014 LT with the RS package and assumed 10,000 miles. Results below:
http://www.nadaguides.com/Cars/2014/...D-LT-V6/Values

Based on the search you should be able to get 23000 to 24000 If your car is more than the base lt/RS it would be more. If the info I put in is not correct just do a new search and enter correct info.

[94turbolsx]

OMG, they really finance cars for 84 months now, yikes. That's alot of the problem right there. Your payments aren't high enough to keep up with depreciation. I don't mean this to be offensive at all, but these super long term loans exist for 1 reason, and thats to sell people cars they in no way can afford. Being able to afford the payment doesn't mean you can afford the car.

I would really keep the 2014 for a bit and try to pay down the loan to a break even point. Then instead of losing a ton of money on a trade, sell the car privately. Then search for a 13 SS vert. and I would really not advise another 72-84 month term or you will be substantially upside down in that car too.

[pyroguy]

First of all, sorry I said he instead of she. Didn't mean to offend.

Thanks for the clarification on the specifics though, there's a lot more sense made out of this now. Like 'Kens ss' said, did you get any of the dealership "extras" when you bought your Camaro? For instance, the undercoating, or overcoating, or extended warranty, or fabric protectant, or prepaid oil changes, or anything else that could have raised the bottom dollar of the car? Did you roll the sales tax, title, and tags fee into the cost of the car? That could be extra money sitting in the cost of the car. When you say you did have a "small" amount rolled over to this loan, what defines small? Is it $100, $500, or $2,000+? I have to agree with 94turbolsx's response to the 84 month term, holy crap! The reason why they gave you a better rate on the 84 month term is because they still make more money on you in the long term, provided you pay the payments for the full term. Yes, $20 a month extra will knock off some time at the end, but at the end of 7 years, many people consider cars to be worn out. At an average of 15,000 miles a year times 7 years that's 105,000 miles and for some reason seeing 6 figures on the odometer freaks people out so the dealership gets to sell the person another car right as soon as they've quit getting money from the last one.

As far as the trade in value, the dealerships are a little low because they are trying to get every dollar that they can out of you for their own profit. If your car is a 2LT/RS with all of the options in excellent condition, KBB.com estimates its value around $23,000 for trade in. If you're selling it private party you can get about $25,600 for it. That is provided it is loaded, excellent condition, and around 10,000 miles on it.

Good luck with your search for your dream Camaro. Even though it sucks to say it, there are other cars out there that are pretty awesome to drive too. The Pontiac G8 was a car that was on the same platform as the Camaro, and the GT version is about $20,000 and still has a 6.0L V8.

[DRKS1D3]

OP, I get what you're saying, but don't run yourself through the wringer over a CAR. It is a CAR...a mode of transportation. You're not happy with the car and want something different? A 2013 Vert SS? There are more important things in life than putting yourself in a financial squeeze over a vehicle. "Well, I finally got my dream car...now I just have to eat Saltine crackers 3 times a day, shut my central air off and keep my major appliances unplugged for 18 hours day. Whew, it will be well worth it though.". Good luck with the whole ordeal!

[bork_bork]

Originally Posted by DRKS1D3

OP, I get what you're saying, but don't run yourself through the wringer over a CAR. It is a CAR...a mode of transportation. You're not happy with the car and want something different? A 2013 Vert SS? There are more important things in life than putting yourself in a financial squeeze over a vehicle. "Well, I finally got my dream car...now I just have to eat Saltine crackers 3 times a day, shut my central air off and keep my major appliances unplugged for 18 hours day. Whew, it will be well worth it though.". Good luck with the whole ordeal!

Best advice you can get right there. I did it when I was 20 years old and ended up having to have my parents bail me out so it didn't get repoed

[PalmerGA]

Originally Posted by babymandm

Let me explain my situation in more detail. And just for the record, I am female, not male...lol.

My 2010 did get totaled and I LOVED that car. I would've kept it forever if I could've. I'm not one to switch cars all the time. As I was saying, it was totaled and thankfully the remaining balance on the loan was covered and I had a small amount left over and I mean SMALL. I was pinched for a car, I wanted a Camaro, never owned anything but Camaro's since I was 16 years old. I waited for about 2 weeks before I got the 2014. But I was trying to get rides back and fourth to work from family, friends, neighbors, etc. It was rough and I needed to get something. I got a good deal on the 2014 and figured I better go for it, I really didn't have a choice, nothing else available that I seen and I never had a brand new car, so I did it. I had a few hundred for down payment but all other costs were in the loan. After the first month I hated this car. Don't get me wrong, it's not a bad car and it is a Camaro, but I just don't care for the changes that were made to the body on the 14/15. I wanted to trade it in back then but I knew it wasn't an option. I kept it in the garage all winter, it was a bad winter last year here. And the past month or so I just want to trade it in. I really want a 2013 Convertible SS. I've spoke with so many dealers and they lie to me and tell me they'll call me back and I never hear from them. Or they tell me my car is worth less than what I think it is. I can't understand how a car I bought brand new in July of 2014 could only be worth about $20,000 now. One dealer told me only $17,500. Which I think is a slap in the face. I know they're trying to take me over. Another dealer said oh we can help you, they said they had someone who bought a new car and traded it in 3 weeks later. But yet I never heard back from them and I've had my car for over a year? Just irritates me that other people have done what I'm trying to do and nobody seems to be able to be honest with me and help me. I came to the decision to make extra payments on the car and hopefully be close to where I want to be in Spring but I keep looking online and seeing cars and it irritates me. I just want to be happy and have a car that I want. And once I get this car, I will keep it forever. I am a person who won't stop until they get what they want and I have no patience so waiting until Spring or longer is killing me. And I did take the loan out for 84 months. They gave me a very low interest rate and I couldn't resist the deal. I have been paying extra on the loan since I got the car but only about $20.00 extra. Now I wish I would've done more sooner. And I can afford to do extra and I don't have bad credit or anything like that. I appreciate what everyone is saying, it helps and makes me feel better that others have been in my shoes. I like hearing everyone else's experiences and advice. Thank you.

Well we've all heard the expression that "hindsight is 20/20" so, what do think you should have done after totaling your 2010? This may seem like a pointless question at this stage of the game, but hopefully this thread has turned into a learning experience for others who may be thinking about buying a car they simply cannot afford. Like many of our stories here, perhaps your story will help someone else stay out of a similar situation.

Your story, though unfortunate, is TOTALLY your own fault. You had to have another Camaro because that's "all you've had since you were 16". So you got one - a brand new one - because you "really didn't have a choice, nothing else available that I seen and I never had a brand new car".

So now you have a new car that "after the first month" you hate. At least you "got a good deal". Seriously? You took out a EIGHTY-FOUR month loan to be able to afford it. You do know 84 months is SEVEN YEARS, right?

You, young lady, need some serious help with managing your finances. You have no idea how reality works when it comes to money and now you are stuck for seven years with a car you hate. And that $20 a month you are adding to your payments... you may as well buy a case of beer with it and get some enjoyment out of it because you're just pissing it away. You might pay off your car in 82 months paying $20.

No dealers have called you back because none of them are going to touch your loan. THEY know you made a terrible deal and they are not going to help you get out of it.

Good luck to you. This is going to be a long and painful lesson for you.

[babymandm]

I did not purchase any of the extra things they offered, but I did roll in the tax, tags, fees in with the loan. And I didn't roll over any money on this loan, I meant I had a small amount of money that was given back to me after the loan was paid off from the totaled car. The amount they gave me for my car that was totaled paid off the remaining balance of the auto loan along with a few extra dollars in my pocket. Thank you for the links to NADA and KBB. I did do both sites and I got the amounts that you got, which is why I feel I'm being taken advantage of by these dealers offering me $17,500.00 for mine. I might have made a mistake and it was only because I needed another car and I get what what your saying about me "having to have a Camaro", but I've always been a Camaro girl and I always will. And I can afford what I have, I just want what I want. Thanks for everyone's help and opinions, positive and negative. I appreciate it!

[Red2014SS]

Originally Posted by babymandm

I did not purchase any of the extra things they offered, but I did roll in the tax, tags, fees in with the loan. And I didn't roll over any money on this loan, I meant I had a small amount of money that was given back to me after the loan was paid off from the totaled car. The amount they gave me for my car that was totaled paid off the remaining balance of the auto loan along with a few extra dollars in my pocket. Thank you for the links to NADA and KBB. I did do both sites and I got the amounts that you got, which is why I feel I'm being taken advantage of by these dealers offering me $17,500.00 for mine. I might have made a mistake and it was only because I needed another car and I get what what your saying about me "having to have a Camaro", but I've always been a Camaro girl and I always will. And I can afford what I have, I just want what I want. Thanks for everyone's help and opinions, positive and negative. I appreciate it!

Dealers have bills to pay - labor, electric, advertising, etc. They have to low ball you or they go out of business. They just need room to make a profit when they resell your trade. I don't think anyone is trying to take advantage of you. I think you bought a brand new car with very little down, paid on it for a short while and now you are upside down. Don't feel bad about it... it's just the way things work.. Every single person who has done what you've done is in the same position, no matter what car they bought or what dealerships they've visited.

Generally speaking, all brand new cars depreciate the most in the first two years. Luckily, the Camaro has won the KBB award for highest resale value for several years running. In other words, it could be worse... you could've bought a new Kia, or some other car that has tanked in value a lot worse than yours.

Try to enjoy your new car. Pay on it for a couple more years. Depreciation slows down a bunch after the first two years. You will slowly catch up and get even, especially if you can pay a little each month towards your principle loan amount. If you really feel the need to get out of your car, you need to sell it to a private individual. That way, there is no middle man taking a cut. I hope this made you feel better.