Author Topic: Underwater on a 9-year-old car  (Read 5422 times)

mugwump

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Underwater on a 9-year-old car
« on: April 17, 2012, 11:41:52 AM »
I just bought a 9 year old car from a private party.  We paid several hundred over blue book because it was in beautiful shape and has great gas mileage.  But the owner couldn't give us the title right away, because he still had a loan on it.  He had had it more than 6 years, and the loan was still apparently about a thousand or so over blue book value!!

Instead of smacking him in the face, we quickly bought the car.  But I still can't wrap my head around the concept.  I haven't had a car loan since 1985.  (For you young ones, I wasn't very mustachian back then, but I was paying 15% interest Great incentive to pay off a loan).

The only thing I can figure is he must have borrowed extra money to pay for the other two larger cars sitting in his garage.

Parizade

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Re: Underwater on a 9-year-old car
« Reply #1 on: April 17, 2012, 08:26:30 PM »
yikes mugwump, what if he doesn't pay off his loan? Will the bank repossess the car from you?

arebelspy

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Re: Underwater on a 9-year-old car
« Reply #2 on: April 17, 2012, 08:51:21 PM »
Yeah, hopefully mugwump acquired a clean title.

Really shows you the folly of both purchasing new cars (how quickly they depreciate) and financing cars.  Financing a depreciating asset is bad news.
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adam

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Re: Underwater on a 9-year-old car
« Reply #3 on: April 18, 2012, 06:18:33 AM »
Let me tell you how this happens (from prior experience).

You buy a new car and within 8 months you decide you don't like it any more or for some other reason you decide to trade it in.  You trade it in on another car, not even necessarily new, and since you're upside down the dealer helpfully rolls that negative equity into the new vehicle loan.  Then 1 year after that you go through the process again, and you just keep adding negative equity until you're eventually upside down on a 9 year old car.

(I finally broke this cycle myself shortly after getting married.  Now I have one paid for car and one that is worth what we owe on it.)

mugwump

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Re: Underwater on a 9-year-old car
« Reply #4 on: April 18, 2012, 08:00:14 AM »
Yeah, hopefully mugwump acquired a clean title.

The man is transparently honest--no problems there.  He paid off the loan Friday (after his paycheck came in), and we are now waiting for the clear title from the bank. Besides, we know where he lives and works...

Rich M

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Re: Underwater on a 9-year-old car
« Reply #5 on: April 19, 2012, 10:45:09 PM »
I just bought a 9 year old car from a private party.  We paid several hundred over blue book because it was in beautiful shape and has great gas mileage.  But the owner couldn't give us the title right away, because he still had a loan on it.  He had had it more than 6 years, and the loan was still apparently about a thousand or so over blue book value!!

Instead of smacking him in the face, we quickly bought the car.  But I still can't wrap my head around the concept.  I haven't had a car loan since 1985.  (For you young ones, I wasn't very mustachian back then, but I was paying 15% interest Great incentive to pay off a loan).

The only thing I can figure is he must have borrowed extra money to pay for the other two larger cars sitting in his garage.

Hope you are happy and he is too.  Glad he took care of it.

mugwump

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Re: Underwater on a 9-year-old car
« Reply #6 on: May 01, 2012, 09:16:46 AM »
Got a clear tiltle and put in my second tank of gas.  Got 41 miles per gallon (NOT a hybrid).  The more I drive the car, the more I like it.

James

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Re: Underwater on a 9-year-old car
« Reply #7 on: May 01, 2012, 09:26:57 AM »
Got a clear tiltle and put in my second tank of gas.  Got 41 miles per gallon (NOT a hybrid).  The more I drive the car, the more I like it.

Inquiring minds need to know, what model?...  :)

mugwump

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Re: Underwater on a 9-year-old car
« Reply #8 on: May 02, 2012, 03:49:15 PM »
2003 Toyota Echo.  Smaller than most cars, no electric windows, etc, 4-door sedan.

James

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Re: Underwater on a 9-year-old car
« Reply #9 on: May 02, 2012, 08:09:24 PM »
2003 Toyota Echo.  Smaller than most cars, no electric windows, etc, 4-door sedan.


Thanks, sounds like a great little car, can't wait to sell my minivan and downsize into something like that.  I downsized my truck to a subaru already, but would really love a truly high mpg car to go with it.  Better yet I'd like to move into town and drop down to one vehicle, but unfortunately no one wants to buy our house...  :)


I made a mistake 7 years ago and bought a new van on credit, bugged the hell out of me that I was underwater for most of the life of the loan.  Won't make that mistake ever again.  But I'm trying to wrap my head around being underwater at 9 years, that's just amazing.

mugwump

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Re: Underwater on a 9-year-old car
« Reply #10 on: May 03, 2012, 08:48:59 AM »
We lived with one vehicle for five months before getting this one.  It was doable, but in the suburbs it wasn't easy.  And I'll never get my husband to move.