Offtop: Vehicle Loans

Options
cr8ivewonder
cr8ivewonder Posts: 44 Member
in Chit-Chat
Long story short-recently divorced, and have a pile of debt related to this.

One of my bigger debts is my vehicle. Wanting to trade it in for a smaller monthly payment and better gas mileage. I have zero savings available, so I need to finance the entire thing.

However, my outstanding balance is more than the vehicle is worth, according to Black Book (I'm in Ontario, Canada) and autotrader.ca. Ranges $6-$10k more than what is listed on those websites.

I've considered keeping the vehicle, but I travel for work and the gas is killing me. It's also approaching 100k, and will need some investments soon-tires, brakes, etc.

Anyone have experience with purchasing a vehicle and rolling the outstanding debt balance into a new auto loan? I really don't know what to do. I live in a rural area with no public transportation, so going without a vehicle isn't an option.

Replies

  • Timshel_
    Timshel_ Posts: 22,834 Member
    Options
    Unfortunately most dealerships will let you roll-over debt from one vehicle into another, even if way beyond value. So when you are upside down in one, you will be doubly upside down in the next. And when they know they have you in a hard spot they will also bump up the interest rate. If there is ANY way to keep from rolling over the debt into a new loan/car that would be the best choice. Alternatively, is there any way to get help selling the car and just having a loan for the balance then buying a nice used Honda Accord or such, or even using public transportation?

    Sorry you're in a pickle, but I just hate to see ya made a bad situation worse like that.
  • JeepHair77
    JeepHair77 Posts: 1,291 Member
    Options
    If you owe more than it's worth, trading it in is almost certainly not going to get you the results you're looking for (lower payment). The payoff amount, minus the trade-in value (which will be less than market value) will be added to the amount you finance on your new vehicle. So unless the vehicle you're looking at is a significant bargain, you'll be doing good just to break even.

    THAT SAID, the gas mileage may still make it worth doing, if you put on a lot of miles and are trading a car with terrible mileage for a car with excellent mileage. You'd have to do some serious number-crunching to figure that out. I will say, that shortly after my divorce, I did approximately what you're doing, but for different reasons. I just plain didn't like the car I had. I traded a VW Jetta for a Toyota Prius. I took a pretty ugly hit on the trade-in/payoff, and my car payment actually increased, but I have a fairly long work commute (and this was when gas was upwards of $3/gallon) so financially, I was still better off, because the gas savings were no freaking joke.

    Look carefully at your current loan docs/title information. You probably couldn't sell it directly even if you wanted to.
  • Motorsheen
    Motorsheen Posts: 20,505 Member
    Options
    Look for a different job with a shorter commute. (?)
    Pay off the car as fast as you can and drive it until the wheels fall off.

    Best of luck
  • kindalikevelma
    kindalikevelma Posts: 1,337 Member
    Options
    How long have you had the vehicle? If you’ve made consistent payments on it for a decent period of time, chances are you could try and refinance and get a better interest rate and/or terms. When I was a little hatchling and was first building credit, my original car loan had a BRUTAL interest rate. After 8 months I was able to shave $200 off of my car payment by refinancing.
  • deannalfisher
    deannalfisher Posts: 5,600 Member
    Options
    Could you drive lyft or uber and puke that money towards paying off faster? (I’d routinely make $2-300 on weekends)

    Why are you solely responsible for the car debt - why not your ex?
  • mbaker566
    mbaker566 Posts: 11,233 Member
    Options
    kindalikevelma wrote: »
    How long have you had the vehicle? If you’ve made consistent payments on it for a decent period of time, chances are you could try and refinance and get a better interest rate and/or terms. When I was a little hatchling and was first building credit, my original car loan had a BRUTAL interest rate. After 8 months I was able to shave $200 off of my car payment by refinancing.

    i was going to suggest this. i was about to do it. death not divorce put me in a rough situation. but then someone hit my car and i got a lower priced car when mine was totalled.

  • kaizaku
    kaizaku Posts: 1,039 Member
    Options
    Public transport would save you money. If you in debt, finance will add to your problems.
  • mbaker566
    mbaker566 Posts: 11,233 Member
    Options
    Will_Workout_for_food wrote: »
    Considering this thread was from last year.....

    d'oh

Categories