Author Topic: Underwater Car Loan: Best way to sell it?  (Read 5113 times)

Wolf_Stache

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Underwater Car Loan: Best way to sell it?
« on: April 23, 2014, 06:49:30 PM »
The details (these are also in my Journal):

Edited to add: The car is a 2011 Nissan Leaf

Current loan balance: $17663

Current Car worth KKB: $14000

Monthly payments: $491
Interest: 1.99%

If I can sell for $14K or more, I have enough cash to cover the $3000 difference. But will buyers go for this, since they'd have to wait on the title?

If I took out a 401K loan, I could pay off the car have the title in hand to sign over to buyers, but I'm leery of taking a 401K loan for a car. If I did this, could I just pay back the loan immediately with the proceeds from the sale?

I've been reading alot online about the best way to sell your car yourself, and most of the sites mention paying off the loan first. Or is that a myth? What have been other's experiences selling an car with an underwater loan?
« Last Edit: April 23, 2014, 07:30:05 PM by GamerGirl »

GoldenStache

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Re: Underwater Car Loan: Best way to sell it?
« Reply #1 on: April 23, 2014, 06:56:29 PM »
Have to ask..

Why sell it?

It is far easier to sell it to a person when you have the title in hand (If your state still does paper titles). 

Wolf_Stache

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Re: Underwater Car Loan: Best way to sell it?
« Reply #2 on: April 23, 2014, 07:09:13 PM »
Have to ask..

Why sell it?

It is far easier to sell it to a person when you have the title in hand (If your state still does paper titles).

1) that payment eats up a huge chunk of my budget every month
2)I bicycle commute to work
3) my new apartment I move to next month doesn't have free parking - its $200 a month for a parking permit
4)I live right next to the amtrack station, the light rail station, and a bus hub
5) Its a pain trying to find an electric charge station
6) I only drive it about 30 miles a month - because I bike or take the bus/light rail everywhere

msilenus

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Re: Underwater Car Loan: Best way to sell it?
« Reply #3 on: April 23, 2014, 07:36:24 PM »
Is there any way you could swing a $14k bridge loan to pay off the car, to get the title, to sell the car?  401k, personal loan, credit cards, lending club, et cetera?

You're in a spot where you can think of the interest on a bridge loan as an investment, with your car payment as the ROI.  As long as the loan duration is short (you sell fast) you're going to come out way ahead.

Wesmon

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Re: Underwater Car Loan: Best way to sell it?
« Reply #4 on: April 23, 2014, 08:11:21 PM »
Yes, you should get a bridge loan.  Last year I tried selling a vehicle without the title in hand and had no takers even though once I paid the loans of I had the title within a week.

The 401k loan is a great idea as long as you make yourself return the money.


La Bibliotecaria Feroz

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Re: Underwater Car Loan: Best way to sell it?
« Reply #5 on: April 23, 2014, 08:36:14 PM »
Escrow.com offers a lien payoff service; it adds up to over $200, but it gives the buyer security depending on what state you're in. Often, the title can be mailed directly to the buyer.

That place with the annoying commercials, webuyanycar.com, gave us a decent price for our car--you might check with them and see what they would offer. It would be by far the easiest and they gave us literally THOUSANDS of dollars more than the dealer offered.

Wolf_Stache

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Re: Underwater Car Loan: Best way to sell it?
« Reply #6 on: April 23, 2014, 10:07:44 PM »
Escrow.com offers a lien payoff service; it adds up to over $200, but it gives the buyer security depending on what state you're in. Often, the title can be mailed directly to the buyer.

That place with the annoying commercials, webuyanycar.com, gave us a decent price for our car--you might check with them and see what they would offer. It would be by far the easiest and they gave us literally THOUSANDS of dollars more than the dealer offered.

looked at that website. The closest one to me is over 2000 miles away.

I'll probably do a 401K loan, cause then at least I'm paying myself interest. But I'm going to get a quote from the credit union for an unsecured loan.

GoldenStache

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Re: Underwater Car Loan: Best way to sell it?
« Reply #7 on: April 24, 2014, 06:17:24 AM »
I would recommend first taking it to a Carmax.. They will give you an offer and sometimes the offer is higher than book value if the vehicle is a high demand vehicle in your area. 

You have the perfect case to be car free.. Congrats and good luck getting rid of it.

Thegoblinchief

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Re: Underwater Car Loan: Best way to sell it?
« Reply #8 on: April 24, 2014, 07:31:41 AM »
Is the loan held by a local bank?

I think others have sold the car, closed on the sale AT the bank, and the bank representative immediately released the title to the buyer with the combined funds.

Wolf_Stache

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Re: Underwater Car Loan: Best way to sell it?
« Reply #9 on: April 24, 2014, 08:24:36 AM »
I would recommend first taking it to a Carmax.. They will give you an offer and sometimes the offer is higher than book value if the vehicle is a high demand vehicle in your area. 

You have the perfect case to be car free.. Congrats and good luck getting rid of it.

Closest CarMax is 600 miles away. Looks like most of the places that do this sort of thing are east coast. There is one 'opening soon' in Spokane, WA, but even that is still 250 miles away.

Is the loan held by a local bank?

I think others have sold the car, closed on the sale AT the bank, and the bank representative immediately released the title to the buyer with the combined funds.

It is a local credit union. I was actually thinking of this exact scenario. I'll go over there today at lunch and see how long it takes to get title released once the loan is paid off.
« Last Edit: April 24, 2014, 08:30:52 AM by GamerGirl »

bwall

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Re: Underwater Car Loan: Best way to sell it?
« Reply #10 on: April 24, 2014, 09:16:59 AM »
The best way to answer your question is for you to list it for sale on Craigslist. It's costs nothing. The first couple of lookers will give you a good indication of whether or not this is an issue.

I've bought cars with liens from private individuals on Craigslist and have never had a problem.