CAR QUESTION: Upside down in payment... what to do?

[Vic]

Originally posted by: JulesMaximus

Originally posted by: afropick

Originally posted by: JulesMaximus

Originally posted by: afropick
Looks like most of you guys seem to be leaning toward me keeping it. That's probably what I'll do. This repair bill is gonna be $700 bucks this time around though and the parts are gonna take about two weeks to come in. I hate to pay that and continue to have those kinds of problems in the future.

I don't want a total crap car either. My father-in-law says I should get this 2001 Dodge Intrepid -> $8,975 -> 32,010 miles, but I dunno... I wish I'd never gotten into a car payment.

2 weeks to get parts? Man, that's insane. Can you drive it during that period?

Nope, the mechanic highly recommended that I don't drive it... and two weeks is nothing... it took almost a month for front brake pads to come in! Took about three weeks for some part that was causing problems for me when changing from park to any other gear.

Wow, that's crazy. I'm guessing that if the timing belt breaks it will do major damage to the engine and this is why he's telling you not to drive it.

Assuming he can fix this problem for $700 does your mechanic think it will go for another year or until you can get it paid off? If not then, as much as I hate to recommend this to someone in your situation, your best bet may be to get rid of it. :Q

His mechanic is full of it. Timing belts do not give warning signs before they break. That's why they're supposed to be replaced at a regular interval.
If I took my car to a shop because it was running a little rough/noisy, and the mechanic told me that the reason was because my timing belt needed to be replaced, I'd run out of that dishonest shop FAST clutching my wallet.
Now if he said that the timing belt tensioner needed to be replaced, that would be a different story.

 

[waggy]

Originally posted by: JulesMaximus

Originally posted by: Skoorb

Originally posted by: amdskip
Get an Accord/Civic thats used. Take good care of it and it will go at least 200,000 miles with minimal maintenance.

Yep, either that or maybe trade in and buy a new kia, just because they have such a long warranty.

Trade one crappy Korean car for another crappy Korean car? Worst advice ever!!!

Actually Kia and Hyundai are getting good reviews now. they have been since 2000.

for the price fo the car you get a decent little vehicle. For someone like the OP who has financial restraints its not a bad idea.

But then if i was the OP i would just fix his car and drive it until its at least paid for.

This is one of the reasons i dont buy new cars. you are upside way to long.

 

[Jzero]

Originally posted by: waggy
This is one of the reasons i dont buy new cars. you are upside way to long.

You have to pick cars with good resale value AND make a big enough down payment.

I put $4000 on my Civic 2 years ago. I was only upside-down for a couple months. By now I'm a good $3k in the green.

 

[RossMAN]

Originally posted by: Vic
Never trade in a car with negative equity, unless you are able and willing to buy out the negative equity in cash. Otherwise, you are trading in the negative equity to compound it with additional negative equity that is sure to occur with the new vehicle. In other words, you are financing yourself deeper and deeper into a hole, with only a depreciating item as security.
I keep all my cars until they are paid off. Then I never trade them in, but sell them private party. This way, when I buy my new car, I can negotiate the dealer for the lower price with a minimum of complication and distraction.
Your car is only worth $2k. Do the minimum amount of repairs to keep it running and drive it until the wheels fall off. Then buy a new one.

edit: for example, you say your car is still running, and your only complaint is that it is running a little loud. Based on the information you have provided, I would not do that $700 in repairs (on a car worth $2k!), but just turn up the stereo and keep limping it along.

This reminds me of those Joe Korasami ads I keep hearing on the radio how they'll buy and finance any car, NO MATTER HOW MUCH YOU OWE.

At the end of the ad, in SUPER FAST LAWYER babble they say "negative equity may be added to the amount financed".

LOL

I can just imagine someone owing $39k on a Ford Expedition (which is only worth $28k), to finance a $12k Kia ... I wonder what their amount financed would be

 

[AgaBoogaBoo]

How much can you get for the car?

Just take this as a lesson for the future

 

[nakedfrog]

Buy a 75-82 Ford LTD-based car (Grand Marquis, Crown Vic if it's gotta be nicer) for $300-$700. For the price of 1 or 2 payments, you'll have something paid off that should be able to be driven into the ground. Bad gas mileage, sure, but it's better than a car payment.

 

[fredtam]

Originally posted by: Vic
Never trade in a car with negative equity, unless you are able and willing to buy out the negative equity in cash. Otherwise, you are trading in the negative equity to compound it with additional negative equity that is sure to occur with the new vehicle. In other words, you are financing yourself deeper and deeper into a hole, with only a depreciating item as security.
I keep all my cars until they are paid off. Then I never trade them in, but sell them private party. This way, when I buy my new car, I can negotiate the dealer for the lower price with a minimum of complication and distraction.
Your car is only worth $2k. Do the minimum amount of repairs to keep it running and drive it until the wheels fall off. Then buy a new one.

edit: for example, you say your car is still running, and your only complaint is that it is running a little loud. Based on the information you have provided, I would not do that $700 in repairs (on a car worth $2k!), but just turn up the stereo and keep limping it along.

This is somewhat true, however;

First I would say keep your car and pay it off. With a year and a half left you are primarily paying on the principle side of the loan so making payments over and above your payment will not help you a whole lot. This money would be better used by putting it in the bank so that you are prepared for unexpected expenses.

Sadly yes the Daewoo is a bad car choice along with Hyundai. The depreciation is outrageous and when you added the negative equity of the civic you only made things worse. When buying a caryou should also consider the amount of miles you drive. Right now you are a little over mileage and that doesn't help. One of the reasons your car depreciates as fast as it does is because it is harder to sell a high mileage Daewoo. People usually don't think twice about buying a high mileage Honda, Toyota, or Nissan so they hold their resale value well.


OK. Now you may want to try for a new car. $4500 inequity is not impossible to break you out of.

1. Look around for dealer incentives and customer rebates to help cancel out your negative equity.
2. Since from the beginning you know you are going to be in an inequity situation make sure you look for a car that is dependable and and retains a good resale value.
3. Try to keep your inequity at no more than $2000because usually dealers can easily break you out with rebates if you want to trade the car in in the future.
4. Again make sure it is a reliable make in case you want to keep it.
5. Another thing you have going for you is being a student and I'm assuming you probably now have good credit. This will help get a low intrest rate to keep the payments down.

Edit:

Also if you are going to trade it wait until October. Usually as the New models are coming in
the rebates are better and the dealers are willing to take less profit. Most people think buying the previous year model means it will be woth less and cause further inequity. However the add for miles usually balances this out ie. your 2004 with 1000 miles is worth more than the guy who bought it at the beginning of the year model and has 15000 miles.

 

[Vic]

Originally posted by: RossMAN

This reminds me of those Joe Korasami ads I keep hearing on the radio how they'll buy and finance any car, NO MATTER HOW MUCH YOU OWE.

At the end of the ad, in SUPER FAST LAWYER babble they say "negative equity may be added to the amount financed".

LOL

I can just imagine someone owing $39k on a Ford Expedition (which is only worth $28k), to finance a $12k Kia ... I wonder what their amount financed would be

The financially stupid always get confused about the abstract aspect of money, and turn money into something that can be imaginary (i.e. they imagine it away). And suddenly negative equity becomes not a burden, but an asset.
All of this falls easily into the key aspect of sales, which is to maximize profits for your employer while convincing the customer that they are getting a great deal and/or benefit. Negative equity becomes a tool which can be used to "harm" the customer, and the company's ability to deal with the negative equity provides both benefit and differentiation, i.e. the company can do something that none of their competitors can (or so they can convince the customers).
And an easy mark becomes even easier. Why do you think car that dealerships advertise to what would (at first glance) appear to be such an undesirable demographic?
If you ever hear a salesperson (and ALL mechanics are salespeople too) use any variation of "harm" (something that might stop you from getting the deal or the benefit they are selling) followed by "but the good news is" or "here at BLANK we specialize in working with people with your type of challenge", etc. then RUN don't walk out the door.

 

[StageLeft]

Vic's money advise is of course spot on.

I also am surprised that a bad timing belt would make a car run rough. If you have no timing belt your car doesn't run (at all). But, if the timing belt works, then it works. It's not an item that can degenerate AFAIk, unlike a timing chain which CAN rattle before it dies. But unless the timing belt is frayed and smacking around in the engine making sounds (and it wouldn't be rough), then how can it make the engine run roughly...?

 

[waggy]

Originally posted by: Jzero

Originally posted by: waggy
This is one of the reasons i dont buy new cars. you are upside way to long.

You have to pick cars with good resale value AND make a big enough down payment.

I put $4000 on my Civic 2 years ago. I was only upside-down for a couple months. By now I'm a good $3k in the green.

Right. I would buy a new Honda product. But any other car? heck no.

 

[JulesMaximus]

Originally posted by: Skoorb
Vic's money advise is of course spot on.

I also am surprised that a bad timing belt would make a car run rough. If you have no timing belt your car doesn't run (at all). But, if the timing belt works, then it works. It's not an item that can degenerate AFAIk, unlike a timing chain which CAN rattle before it dies. But unless the timing belt is frayed and smacking around in the engine making sounds (and it wouldn't be rough), then how can it make the engine run roughly...?

Well, the tensioner may be making the noise but the mechanic is probably quoting to replace the belt and the tensioner at the same time since he a) knows something about these cars b) has to do basically the same amount of labor to replace the tensioner as he does to replace the belt or both. Most cars with timing belts go to 60k miles or therabouts before the manufacturer recommends replacing it. This is typical. If the tensioner is making noise though it probably means that the bearing is going bad and is about to fail. If the tensioner fails you can bet the belt will break and this is what will happen: Link.

Some cars, like my Rodeo, will shut off without damaging the piston or the valves if the timing belt breaks. I'm guessing the Daewoo will not. Another car that was notorious for this was the FIAT X-19 I think FIAT recommended replacing the timing belt every 26k miles (if I remember correctly-I almost bought one of these cars once) and they meant it. If the belt broke while the engine was running you could count on thousands of dollars worth of engine damage.

 

[Mallow]

Sounds like your trying live beyond your means. Take a step down.

 

[afropick]

GREAT NEWS EVERYBODY!!!

My actual mileage was about 59,760 and apparently as of about August of 2003 the dealers that are still in existence have been able to honor the warranties.

So somehow I've lucked up and the dealership is going to fix this whole timing belt dissaster, under the 60,000 mile warranty!

Hopefully I won't have any more problems for the next 18 months or so and I'll be able to pay the car off and take one step closer to getting completely out of debt!

I appreciate everyone's advice... thank you all!

 

[woowoo]

Now
Start making $50-$75 a month extra payments.....