ARRRRRGGG I Owe Way More than my Car is worth!

[CrackRabbit]

In September of 1999 i bought a used '97 Saturn SL1 with 36k miles on it,and i was fairly happy with my purchase at the time seing as it was a great improvement over my first car, but now 2 years and 70k miles later i've grown very tired of my car, it just generaly seems to annoy me especialy buzzing, and vibration of the interior at idle and while going down the highway. Plus the motor isnt nearly powerful enough (though it seemed like it at the time i purchased it). I was hoping to be able to trade it in and get a brand spankin new mid-size car with a decent 4 banger or possibly a V6. After Consulting the Kelly Blue book i found out my car is worth about 4k, not bad considering how many miles it has on it, so i checked my paperwork to see how much my loan was for and how much i had paid off on it, i owe almost 9k :| , so there is almost no way a dealership will let me trade in my car Is there any way around there, or anything i can do at all? I want out of my current car but i see no solution in sight! HELP!!!!


CrackRabbit

 

[mithrandir2001]

Somethings not right. Who is your financer? What's your interest rate? Sounds like you've got one of those 18% loans that take an eternity to pay off.

 

[Soulflare]

<< Plus the motor isnt nearly powerful enough. >>



No kidding. My mom owned a SL1 and we had to Flinstone-it to make the car
climb hills... it was definitely a dangerous car to try to pass someone with.

 

[Pacfanweb]

This is normal. Everyone who buys a new or used car is still upside down after only 2 years. Especially if you traded in a car that you still owed money on....if so, you were probably upside down in that one, too.....that extra money simply gets financed in with what you pay for the new(er) one.

You can still probably trade it, but you'll be in the same fix two years from now, because all that negative equity will roll into a new loan.

I'd advise you to keep the current car at least 2 more years....by then, the car's value and what you owe will be closer to even. If you can't stand it and just have to have a new one, be sure you really like what you buy, because you won't be able to get out of it until it's nearly paid off.

 

[compuwiz1]

<< and i was fairly happy with my purchase at the time seing as it was a great improvement over my first car, but now 2 years and 70k miles later i've grown very tired of my ca >>



2 years and 70,000 miles is most of your problem. 15,000 miles per year is average. Beyond that, depreciation takes a toll. If you financed that car longer than 3 years, that is also a big source of your problem.
The problem is long term financing and accellerated depreciation, due to high mileage.

 

[tm37]

PLease tell me the total is 70K and you didn't drive 35K a year!

 

[Muadib]

Your payment book shows the payoff every month? That's rather odd, at least for here it is. Are you sure you have the right payoff amount?

 

[wyvrn]

The high milage drags down the value. Check the worth of your car with 40k less miles on it (15k a year avg.), probably a lot more.

 

[olds]

It's typical to owe more than a car is worth. They don't hold their value like a truck or SUV. How do I know this? My fiance is sitting right next to me and she is a fleet manager at the local Chevy dealership.

 

[b0mbrman]

That's horrible...but that's what always happens with credit

 

[compuwiz1]

The only kind of payment books that show balance are those with precalculated finance charges, rule of 78ths, etc. Call the lender and ask for a net payoff balance, not gross. Also get the per diem. That is the daily interest that accumulates from the day the payoff is quoted until it is paid off.

 

[CrackRabbit]

Thank you for the replies, I can understand about the resale value being low because of the high milage, and yes i actualy did drive 70k in two years (I used to live 30 miles from my job x2+ trips a day= lots o miles). As for having the pay off amount correct, this is what my papers say, Amount Financed $10,570, Finance Charge $4,262, Total of Payments $14,883. Im going with the 14,883 as the amount i owe subract my current payments to date from that = apx. 9k. If thats wrong please let me know so i can stop freaking out! Pacfanweb I understand that in about 2 years i will have the amount owed down to about what the car is worth, but i dont know if i can stand the car that long!

 

[kranky]

You probably don't owe as much as you think. The finance charge on your loan papers assumes you carry the loan to completion. Since you want to pay off early (possibly), you'll have to ask your bank what your payoff amount is. That will be a lower amount, since you won't really be borrowing the entire amount for the whole loan period.

If you post your interest rate, length of loan, and payment amount, someone can use an online loan calculator to make a pretty good guess on your payoff amount.

 

[Pacfanweb]

Call your loan company and get the actual payoff. You might be surprised. Or maybe not. And yes, the miles are killing you as far as value goes.

Bottom line, you either stick with this car until the value/debt is better, or trade it and roll the negative into a new(er) one.

FWIW, on some new Fords, there are 4000-6000 dollar discounts, but not on small cars. Maybe other manufacturers have similar discounts. Unfortunately, probably not on the better selling types, though.
If you could find a big discount on something you like, the discount $$$ (which is part rebate, part dealer discount) could help with some of that negative equity.
Just a thought.
I did this for a fellow who bought an Expedition the other day. Owed 3 payments on his lease, (500+ each), Expedition had 6k discount, he still got 4500 bucks off the new one.

 

[Pacfanweb]

Kranky is right, you owe less than what the rest of the payments add up to.

 

[CrackRabbit]

Pacfanweb ,Actualy i was looking at a Ford Taurus SE as a car i might like to own. hmmm i think im gonna call up my lendor tomorrow and see what they say. Again Thank you all... if you have more advice please keep it coming, i can take all i can get.

 

[sitka]

'89 Caprice Classic
$1200 bought yesterday, paid cash.
Little old lady driven.
Soothing woodgrain interior.
Frame.
Big seats.
Like riding on a cloud.

Can$ edit

 

[Pacfanweb]

I believe there's a 2000.00 rebate on the Taurus, plus however much you can get them off the price.

 

[Freejack2]

That's nothing new. I'm a year into my payments and the payoff is $2500 more than the car is worth.

Also you have a 100hp sohc car with cheap crappy 14" tires (I've had to drive on those tires, trust me they are cheap and crappy), no variable speed power steering, and god help you if it's an automatic. As if that wasn't enough it wasn't until 99 they quieted the car up a LOT.

The newer SL2, SW2 series cars come with 15" sport touring tires and the SC2's come with 15" performance tires (which suck too but they are easily replaced with good performance tires), variable speed power steering, and a nice peppy (apparently more torque than a honda civic EX's 127 hp engine) 125hp dohc engine.

The Sx1 series cars leave much to be desired, but the Sx2 series cars are pretty fun to drive, especially with a 5 speed.

Well too late for you to do much about it now, but if you get a friend who wants a Saturn, tell them to stay way from the Sx1 series and pay the extra money for the Sx2 series.

 

[vi edit]

Just as a forwarning, if you buy a brand new American sedan, you will be in as bad, if not worse shape than you are now the second you drive off the lot. Domestic resale value is HORRID. The second you sign those papers over, that car is worth about 2/3rds what it was before you walked in that door.

Honda's, Toyota's, and most Volkswagens do MUCH better on their resale value comparatively.

 

[CrackRabbit]

I understand that, but the insurance on Toyotas and Hondas are higher (at least for the models i would want) Its a lose/lose situation in that respect, but it could be worse.

 

[Evadman]

I bought my truck for $25k out the door last january, and right now I owe 21k on it, with a value of only 17k Welcome to vehicle loans.

 

[Pacfanweb]

<<Honda's, Toyota's, and most Volkswagens do MUCH better on their resale value comparatively. >>

Yes, their resale value is better, but every person who buys one of those cars is upside down the minute they drive off the lot, also.

 

[Freejack2]

<< Pacfanweb ,Actualy i was looking at a Ford Taurus SE as a car i might like to own. hmmm i think im gonna call up my lendor tomorrow and see what they say. Again Thank you all... if you have more advice please keep it coming, i can take all i can get. >>



Take a look at the Honda Accord V6's, though you can probably get a hell of a deal (to the tune of $5000 savings) by buying even just a 1 year old used Ford Taurus.

Edmunds 2002 Ford Taurus SE TMV new price:
Price after dickering: $18,788
Edmunds 2001 Ford Taurus SE Used Car (with about 12000 miles on it) Price:
Private Party: $11,738
Dealer: $13,326

 

[vi edit]

<< <<Honda's, Toyota's, and most Volkswagens do MUCH better on their resale value comparatively. >>

Yes, their resale value is better, but every person who buys one of those cars is upside down the minute they drive off the lot, also. >>



True. But check out lease residuals. A honda vechicle still has a 57% residual after 36 months/45,000 miles. An equivalent ford or GM vehicle will be downwards of 40% or worse. It skews even more in the Honda's favor the closer it is to new.

You might loose 15% on a Honda, but it might be 25%-30% on Domestic. Take that 10% to 15% and multiply it by $25,000 and we're talking some cash that is forever thrown down the hole.