Author Topic: Getting Rid of TWO Financed Cars!  (Read 2222 times)

Rekon

  • Stubble
  • **
  • Posts: 124
Getting Rid of TWO Financed Cars!
« on: July 07, 2014, 09:32:34 PM »
Thanks to this thread http://forum.mrmoneymustache.com/ask-a-mustachian/help!-financial-dilemma/we have decided to cut our expenses! But most importantly my wife and I believe we made some dumb decisions and want to get out of our auto loan debt so we can save faster for a down payment on a house! Hence why I started this thread to focus on getting out of my auto debt...  We've decided to try and get rid of both financed cars and replace them with an older (2009-2011) used civic that we will buy cash.

Here are the details:

2011 Acura TSX (purchase)*
KBB Private Value:  $19,798
Original Balance: $26,109.49
Current Balance:  $17,755.25
Payment:  $498.29 (35 payments remaining)
Interest Rate: 3.49%
*This car has been rear ended (air bag deployed) and the accident shows up on CarFax.

2013 Acura ILX (lease)
KBB Private Value:  $22,737
Payoff Amount:  $21,407.42
Original Term:  36 Months
Payment:  $272.63  (21 payments remaining)
 
Just to test the waters, I took my cars to the dealer today and I've received the following offers:

Acura TSX $12,000
Acura ILX $19,000

Horrible offers right? 

I contacted the lease company and basically the only way to get out of the lease without damaging my credit is to sell the car for the payoff amount ($21,407.42).

I was hoping the dealer would give me a reasonable offer so I wouldn't have to hassle with selling it in the market.  Plus, I'm not exactly sure how I'm going to do the transaction when someone wants to purchase the car.  For the purchased car I can head to the bank with the buyer and do the transaction there.  However, the lease transaction will be a bit more difficult as it would be contingent on me paying out the lease.

I've put ads for the cars on craigslist last night and I haven't received any bites yet.

Please help my mustache grow thicker! :)  Please share your experiences getting out of leases or financed vehicles.  All advise is appreciated

neo von retorch

  • Magnum Stache
  • ******
  • Posts: 3340
  • Location: SE PA
    • Fi@retorch - personal finance tracking
Re: Getting Rid of TWO Financed Cars!
« Reply #1 on: July 08, 2014, 08:33:18 AM »
KBB Trade-In value on the TSX is more like $18,000+

Any dealer who likes profit would probably pay at least $17,000+ after some negotiation. (They'll estimate $1k+ in getting the car ready for sale, and want some profit, but can expect to sell it for $21,000+ so there's TONS of breathing room.) You just have to seem confident and know what you're talking about. Of course, it will be better to sell it private party, but while I give that advice, I have a hard time following through in person. (My advice is to be stronger than me. A few hours of showing your car to buyers can make you a couple thousand dollars!)

When I traded a late model car recently, I was originally offered $15,000 by one dealer. Then $15,400 by another. But I stood my ground until they gave me $16,200. That's not as big of a leap as $12->$17k but I think your first experience was a dealer trying to take advantage of your eagerness to offload two cars. Make it clear you are not desperate or strapped, but rather just looking for ways to save.

EDIT: Just noticed your comment about being rear-ended. I don't have any experience with that, so I guess you can ignore my guesses on what the car would be worth to a dealer.
« Last Edit: July 08, 2014, 08:48:31 AM by neogodless »

frugaliknowit

  • Handlebar Stache
  • *****
  • Posts: 1662
Re: Getting Rid of TWO Financed Cars!
« Reply #2 on: July 08, 2014, 08:47:44 AM »
Calm down and one thing at a time.  Contact the lender of the "owed" car and speak with them as to procedures to sell the car.
Is there any way you could pay off the balance just so you can sell it (out of emergency fund or "gulp" borrow it to close the deal?)?

Sell the car privately at low to mid retail (as much as you can get).  Do the transaction at the buyers bank (that way, you know the cashiers check or cash you receive are real). 

Worry about the lease later (you might have to hold that for the term).  Once you have the first car sold, maybe you could buy the leased car for the purpose of selling it, then payback where ever you got the money (auto loan, emergency fund, gulp, credit card...).

Rekon

  • Stubble
  • **
  • Posts: 124
Re: Getting Rid of TWO Financed Cars!
« Reply #3 on: July 08, 2014, 06:43:29 PM »
Calm down and one thing at a time.  Contact the lender of the "owed" car and speak with them as to procedures to sell the car.
Is there any way you could pay off the balance just so you can sell it (out of emergency fund or "gulp" borrow it to close the deal?)?

Sell the car privately at low to mid retail (as much as you can get).  Do the transaction at the buyers bank (that way, you know the cashiers check or cash you receive are real). 

Worry about the lease later (you might have to hold that for the term).  Once you have the first car sold, maybe you could buy the leased car for the purpose of selling it, then payback where ever you got the money (auto loan, emergency fund, gulp, credit card...).

I think I would have to do the transaction at my bank - not the buyers...  since my bank has the pink slip.