Truck Loan Conundrum: $16k underwater, 8% interest, 85 month term

[Apostrophe]

http://jalopnik.com/what-to-do-when-youre-stuck-in-a-massive-auto-loan-1788572217

I give Jalopnik a little credit for trying to find a solution, but this is a tough one. The article is not about me, btw...

Chris

[EarlThePearl]

You know now I feel less bad about taking the dealer's 2% financing and forgoing the 1.75% I found online. It was only a difference of $3 a month but it was kind of bugging me...

[EarlThePearl]

I feel like a much better/simpler/more sustainable approach would be to save up (make some discretionary cuts) and just pay that original sucker down.

[russianswinga]

I came here to post this article. Was too late :)

[obstinate]

I feel like a much better/simpler/more sustainable approach would be to save up (make some discretionary cuts) and just pay that original sucker down.

I think this is not the case. The personal loan + the civic will be a much better situation, cash-flow and NPV-wise. If the truck owner has the cashflow to pay under the original loan terms, they can put the extra $300 into clearing the personal loan early.

A better move yet would be to buy an inexpensive, used Civic outright by taking a slightly larger loan. But I don't know if you can use a personal loan for that.

[obstinate]

I have to say, I really admire folks who can take a totally non-judgmental tone even in the presence of maximally bad decision making.

[gimp]

Good god, those are some high prices!

I thought they were talking about truck trucks - as in, cabs that haul 80,000 pounds of stuff. You know, for a true work vehicle like a truck cab, I could understand high interest rates and long terms - you need it to work, you'd rather pay more than not work, right?

These are pickup trucks we're talking about... that's insane pricing. Truly insane.

[SwordGuy]

How the heck do people buy something for NINE HUNDRED DOLLARS A MONTH for over SEVEN YEARS and only afterwards say, "Gee!  This payment sure is high!  I can't afford it!"

I mean, I try to be understanding and compassionate.   But this is so incredibly dumb as to beggar belief.

I guess I'm having an empathy failure.

I don't know how some of you come across as so sweet about it.  I'm truly impressed.

[Papa Mustache]

I feel like a much better/simpler/more sustainable approach would be to save up (make some discretionary cuts) and just pay that original sucker down.

I think this is not the case. The personal loan + the civic will be a much better situation, cash-flow and NPV-wise. If the truck owner has the cashflow to pay under the original loan terms, they can put the extra $300 into clearing the personal loan early.

A better move yet would be to buy an inexpensive, used Civic outright by taking a slightly larger loan. But I don't know if you can use a personal loan for that.

Can't put a snow plow on a Civic either... ;) His truck payment is higher than my mortgage!

What kind of cash flow does a snow plow create? Per hour for example.

I'd want out of a "deal" like this ASAP.

[paddedhat]

What kind of cash flow does a snow plow create? Per hour for example.

.

LOL, It's not the income per hour, it's what comes after the storm. I have a buddy that keeps eight one ton pickups and medium duty dump trucks on the road, during storm events in the northeast. After spending 10-20 hours in the cab, with a cell phone in one hand, running the whole circus, while plowing and deicing, he gets a few hours of sleep. He then spends the next few days dealing with the carnage. If he is REALLY lucky, he will have conquered a storm and ended up without  a single truck that  puked a transmission or transfer case, nobody who backed into anything and trashed a truck bed AND whatever they struck, and nobody that slid off a mountain road, and took a high speed ride, while screaming like a little girl, as their truck bashed down a wooded slope, backwards, resulting in a $1000 towing/recovery bill.

Profit, and snow plowing in search of said profit, are often mutually exclusive concepts.

[jjandjab]

I think it is just so crazy to me that he didn't look at the terms for the new loan  - heck I'd give him the loan for 8% over the next 85 months - and just say, "eh, guess I'll keep plowing." Or at since he was still getting a pickip truck, say I'll sell the plow and just drive this for now...

[SwordGuy]

I showed this story to my socialist friends who pretty much think all financial problems anyone ever faces are due to the structural evils of "the system".

They think this guy is a moron, too.

Now I feel better about my total lack of empathy on this story.

[Indexer]

His truck payment > my mortgage payment.

[JAYSLOL]

I feel like a much better/simpler/more sustainable approach would be to save up (make some discretionary cuts) and just pay that original sucker down.

I think this is not the case. The personal loan + the civic will be a much better situation, cash-flow and NPV-wise. If the truck owner has the cashflow to pay under the original loan terms, they can put the extra $300 into clearing the personal loan early.

A better move yet would be to buy an inexpensive, used Civic outright by taking a slightly larger loan. But I don't know if you can use a personal loan for that.

Can't put a snow plow on a Civic either... ;) His truck payment is higher than my mortgage!

What kind of cash flow does a snow plow create? Per hour for example.

I'd want out of a "deal" like this ASAP.

A quick google image search reveals you can put a snow plow on a Civic :P