Author Topic: Upside down 5k on a car  (Read 1250 times)

AlotToLearn

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Upside down 5k on a car
« on: March 30, 2019, 10:28:46 AM »
Hi All,

I am new here but wanted to share my current situation to get advice. I currently am financing a 2017 *luxury sports car* that was purchased for 39k preowned 9 months ago. I bumped into MMM and this forum after scouring the web for personal finance advice, and realized my nearly 600 dollar car payment had to go.

I took the car to both carmax and the original dealer seeking to sell it or trade in, and the best offer I recieved would leave me with 5k negative equity.

I am willing to cut my losses and sell the car, and then move down and get something else. Problem is, I would have to finance a car as I would use my savings to pay off the negative equity.

Would buying a preowned 11-14k late model Honda or Toyota with plans to pay off in 12 months be worth spending 5k to get rid of 35k worth of a sinking debt?

Fishindude

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Re: Upside down 5k on a car
« Reply #1 on: March 30, 2019, 10:32:22 AM »
Would buying a preowned 11-14k late model Honda or Toyota with plans to pay off in 12 months be worth spending 5k to get rid of 35k worth of a sinking debt?

In my opinion, YES.
Honda and Toyota get promoted a lot on here but I don't think make or model matters near as much as having something low cost and / or paid off.

Askel

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Re: Upside down 5k on a car
« Reply #2 on: March 30, 2019, 10:42:59 AM »
I'd also look to see what you can get selling the car yourself. Carmax and the dealer are probably offering pretty close to wholesale which is probably much less than the vehicle would actually sell for.

If you don't need to get out from under it RIGHT NOW, I'd put it up on craigslist for what you owe on it or maybe a bit more. People are going car crazy right now, somebody might buy it. 

BicycleB

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Re: Upside down 5k on a car
« Reply #3 on: March 30, 2019, 11:02:00 AM »
I agree with attempting to sell it personally.

With a car at that high of a price, it might be worth setting up a Square account. Perhaps a purchaser would value the ability to put their $37,000 purchase on a credit card, or set of credit cards! For you, it would be about a 2.5% cost paid in the event of the sale.

https://squareup.com/pricing

I've never sold an expensive car, just sharing ideas because I assume some buyers in that range would need financing.

RWD

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Re: Upside down 5k on a car
« Reply #4 on: March 30, 2019, 11:04:07 AM »
Agreed with selling it private party. You'll get a lot more than as trade-in or from CarMax. Most likely it will be roughly enough to pay off the loan. Most likely buying a used Honda or Toyota will be cheaper from a private party as well. So you can save money on that side too.

I don't know your financial situation so I don't know how much impact the change will have for you. But in absolute dollars you'll likely save a couple thousand per year in depreciation alone. Depending on the vehicle your fuel, maintenance, and insurance could be cheaper too.


I've never sold an expensive car, just sharing ideas because I assume some buyers in that range would need financing.
Buyers can line up financing without help from the seller. It's pretty easy. When I sold my last car I met at the buyer's bank and they did all the paperwork and handed me a check at the end.

AlotToLearn

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Re: Upside down 5k on a car
« Reply #5 on: March 30, 2019, 11:10:08 AM »
Thanks guys for the tips already. Some additional color:

This car will likely be a challenge to sell privately, as it is a two door and I have done some research/leg work on the current market. There are 30 of the same make/model for sale at dealerships across the country, with an average time listed on the market of 47 days. All the cars listed over 30 days have dropped their price at least 3,000, which would be close to what Carvana was offering.

I don't want to make two car payments at the same time. One camry I like fits in my *new* budget and I can potentially throw commission checks over and pay that loan off by Christmas if I am aggressive. That said, Paying and insuring two cars is not something I have any interest in.

The total monthly cost (payment, average gas, insurance) for the car I want to unload runs close to $800/mo. The car I would be buying all in cost is easily half that, if not less. We are talking 20 mpg to 38 mpg and insurance difference of 28%.

Archipelago

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Re: Upside down 5k on a car
« Reply #6 on: March 30, 2019, 11:18:50 AM »
How many dealerships have you contacted for pricing? You could always check out more.

AlotToLearn

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Re: Upside down 5k on a car
« Reply #7 on: March 30, 2019, 11:32:44 AM »
Pricing re: selling my current car? Technically 3: CarMax, Carvana, and the original dealer I bought the car from.

cincystache

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Re: Upside down 5k on a car
« Reply #8 on: March 30, 2019, 03:08:17 PM »
Yes, try selling it private first as others have suggested, if it doesn't sell in a month or two then take it to carmax, pay off the 5k underwater and get your used car in the 10k range. At least try the private party selling route, it's worth 5k if you get lucky and can sell it quickly.

AlotToLearn

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Re: Upside down 5k on a car
« Reply #9 on: March 30, 2019, 03:59:15 PM »
Just came back from another dealer to get an appraisal - they offered even lower ($28.5). Citing there isn't really a market for the car and they would likely sell it at an auction.

RWD

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Re: Upside down 5k on a car
« Reply #10 on: March 30, 2019, 04:29:58 PM »
What kind of car is it?

AlotToLearn

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Re: Upside down 5k on a car
« Reply #11 on: March 30, 2019, 04:30:38 PM »
Infiniti Q50

ForeverPoor

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Re: Upside down 5k on a car
« Reply #12 on: March 30, 2019, 09:14:36 PM »
Infiniti Q50

Good luck... my friend plopped down $37K for his Infiniti and has around 85K miles on it. Told me he made a deal with the financial service to pay it all off so he can stop the monthly payments and then get rid of it before it hits the 100K mark.

cincystache

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Re: Upside down 5k on a car
« Reply #13 on: April 06, 2019, 05:51:54 PM »
Clean it up,take some professional pictures and put in on craigslist.


HipGnosis

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Re: Upside down 5k on a car
« Reply #14 on: April 07, 2019, 11:36:35 AM »
Only if you have enough savings to pay off the car AND put a down payment on the next one.

If you do;  shop around craigslist, cars.com, CarGurus.com, etc. to get a good knowledge base of what the cars you want are going for AND what your car might sell for.   Go see a few cars.  Go talk to someone selling something like yours.  Learn what the private sale value is.
There are websites that buy cars - I've never dealt with them, but worth checking into.
Talk to a credit union (join as needed) to get pre-approved for a used car loan.

When you find a good deal on a car, buy it.  You can cancel the ins on your Infinity (stop driving it).
Then clean up your Infinity and post it for sale (w/ good pics). 
If it doesn't sell in 6-10 weeks, take it to wherever gave you the best offer.