Owe more than it's worth... I'm upside down and I can't get up!

qbrozen

what do you guys think?

Here is what I think. You don't like the Sentra? Too bad. Suck it up. Learn from this experience. Next time, do your homework, don't let yourself get ripped off, and BE SURE of your decision!

Kirstie_H

The advice you're getting is NOT going to change, even if you re-re-restate that you really want the Civic and really hate the Sentra. It seems like you have your mind made up and are just looking for someone to tell you it's a good idea, but it is a very, very bad idea, and no one here is going to tell you otherwise.

It doesn't matter how good your credit is - you are deep in a hole with the Sentra right now. You overpaid for the Sentra, and you can't fix that by overpaying for a Civic. Do you realize that if you took the deal offered on the Civic that you would be paying over $31,000 for a Civic?? That is absurd.

Because you have a lot of negative equity in the Sentra, no car dealer can erase that. This means that whatever car you buy right now, you are going to have to tack on probably an extra $4,000 in financing.

If it does now not make sense to you to suck it up and keep the Sentra until you have paid down some of the loan balance, I do not think there is anything that we can say to you to make it make more sense.

joel0622

They offered 700-900 dollars!!! i flat out said dont insult me and said im going to another dealership. lol.. well anyway, i ended up selling the jetta through classifed ads for $5,500..


WOW!!!! Want a job?

s1ark5

you guys are right, I got screwed I learned from this. I will suck it up pay the Sentra out I mean it is not like I hate the car, I just liked the Civic better. I screwed up big time, and I will learn and move on. Thanks guys!

Kirstie_H

Good for you! See, if you bite the bullet right now and pay down that Sentra as quickly as possible, you can get a much nicer car next time for less $$. Just think... you were considering purchasing a Civic for a total cost of $31K.

Without the burden of the Sentra negative equity when you go shopping next time, you can get a very nice vehicle. Good luck!

fezo

Congratulations! While you won't feel great about it now you have made a decision that will pay off in spades in the long run. It's a decision that takes some folks decades to learn.

Yeah, it will feel like a long time at the beginning with the Sentra but slowly but surely you'll be used to the car and if you hang out in here you'll eventually notice the value of the car vs the amount of the loan starts to look better.

By the time you've paid it off you'll no doubt have stashed away some down payment and be loads smarter about just how to go about getting a car and a deal that you will really like.

Welcome to the club. Nearly all of us have been there. BTW - I had an 85 Sentra coupe and two kids at one point. You'd be amazed - it can be done.

neeshrn

Well, you'd be amazed how much a person can learn in a couple of years after signing for a loan on a vehicle that was in it's last model year. This was my second vehicle. I was upside down in my first one also, so I am already paying for 2 cars at a %14, financed at the dealership(stupid)
That was in 03. It's a Olds Alero, 2003 gls 2.2L 4dr. with approx 91,000m and in average condition. I'm a non smoker. On the loan I owe, $9000. I guestimate the car to be worth 3500.00 maybe???

Anyways, when I bought this car, my intent was to stay in it until it was paid off, because I knew how upside down I was from my very first loan (also taken to the bank by the dealership, just because the monthly payment was affordable.)

Well, 2 children later (a total of 3; ages 10, 2 and 3mos.) and a husband later, the vehicle is too small for all of us now.

I have had my eye on the new 07 Sante Fe because I know it will fit our needs and it is warrantied and safe. I can stay in this car for a LLLLOOOOOOOOONNNNNNGGGGGGGG
time which is what I alwayz have intended when I buy cars, I just literally outgrew this one.

So now what? I have extensively researched and received quotes and done all sorts of calculations and I can safely say that I can afford to be upside down around 3,000. Do I want to??? No, but I don't know how much longer I can wait around on this Alero. I dont want to get to the point where it's worth nothing???

My cradit is fair, just under 630.

Any new perspectives on this would be great.

Thanks

s1ark5

Thanks guys. You are making me feel much better. And what is funny the guy who sold me the sentra was like man you got a great deal!!! I just did not care I wanted the car and be out of there. They kept me there for like 4 hours atleast!.. But yea I plan on paying more then the minimum maybe about 50 bucks more a month just so I can get out of this loan! .. once again I appreciate the help to all of you.

micosilver

I would try to trade it for a lease, up to 36 months. You can have relatively low payments, and you will be done with both cars when the lease is up.
Some lease programs have ridiculously low rates, which makes it easier to roll in negative equity.

qbrozen

I would try to trade it for a lease, up to 36 months.

You could try, but you wouldn't be happy with the results. Every $1k negative equity will add roughly $30 to a 3-year lease. So for just a tad over $3k negative equity, your payment gets bumped a full $100. s1ark5 is probably into the Sentra for double that, at least, adding $200 a month to any special lease deal out there.

His latest decision to keep the Sentra is the right one.

tidester

Any new perspectives on this would be great.

Why don't you go for a low cost used vehicle until you get yourself rightside up?

tidester, host
SUVs and Smart Shopper

forbesj

s1ark5 - I'm impressed. You read the responses, and listened to our advice. You saved yourself piles of money, and in the long run will be far better off financially for it!

The Sentra might not be your ideal car, but it could be a lot worse than what you've got. You could always be driving a '92 Cavalier

blueiedgod

Well, 2 children later (a total of 3; ages 10, 2 and 3mos.) and a husband later, the vehicle is too small for all of us now.

What does your husband drive? Maybe he can drive the Alero and you get the Santa Fe, this way you are not trading in negative equity.

You are also trying to make one vehicle do many things. A few months later, you may find out that Santa Fe is too small to take 3 kids (one car seat, one booster, and a kid in the back) on a family trip. Then, you will be thinking of getting a minivan or what not.

How often are all you travel in the same vehicle? If it is just one a twice a year, for family vacations, keep the Alero and rent a minivan or an SUV for thos trips. It will still be cheaper than losing $6000 on the Alero.

roadburner

The Sentra might not be your ideal car, but it could be a lot worse than what you've got. You could always be driving a '92 Cavalier

Or a new Cobalt, for that matter... :P
But I agree, you've made a VERY smart move by deciding to get out of debt rather than rolling more debt into another car.

fezo

One more word. For reasons already explained by other never try to get out of a hole by going into a lease. Low payments are lovely but you end up with zero (or worse) at the end of one.

Good plan you've got - especially paying extra principal each month.

neeshrn

Thanks for all of the advice. My husband drives an 05 Camry which we are keeping. But to go somewhere as a family, we would have to drive 2 cars. We don't take family trips out of town, but to visit family and friends and overall around the city drivin' (houston) We have outgrown the Alero.

He takes the Camry to work, I take the Alero. I have the kids every day during the week and I tote them around with my son's afterschool activities and we are so cramped in that vehicle.
******You are also trying to make one vehicle do many things. A few months later, you may find out that Santa Fe is too small to take 3 kids (one car seat, one booster, and a kid in the back) on a family trip. Then, you will be thinking of getting a minivan or what not.
*********

That's not the kind of driver I am. It's just with the growth in family so quickly, I am actually really tryin to get into a vehicle I can stay in and try to pay off quickly.
I'm just tired of payin to much money into this car when I really could be in something new and with a warranty.
I'm on the fence.....but I am antsy to get out of the car..

neeshrn

Not a bad idea, I just want to stop having to "trade up" and into cars. I've done the research and I just can't find anything I want that is used. I just want to have something and keep it unitl the wheels fall off. I would still keep the Alero, it's been good to me, it's just too small now for all of us. :confuse:

cccompson

Buy a minivan and you'll be kicking yourself why you didn't do it sooner. '07 Chryslers are cheap and now have the lifetime powertrain warranty.

kyfdx

Ditto.. While a Santa Fe may have more room than an Alero, it's not a lot better than a Camry..

You can grab a Chrysler minivan for under $20K..

SUVs are not that big on utility, ironically enough.

lemko

...too proud to simply drive a beater car until they become solvent? If I were in financial dire straits, I'd just buy the best beater car I could for cash and forego financing anything until my money situation significantly improved. Good beater cars are out there if you take the time to look. I have a 1988 Buick Park Avenue I drive most of the time. Sure, the paint looks like heck, but mechanically, it's extremely reliable.

bobst

" I take the Alero. I have the kids every day during the week and I tote them around with my son's afterschool activities and we are so cramped in that vehicle."

Why are you so cramped? Doesn't the car have four seats, one for you and three for your kids?

jlawrence01

If I were in financial dire straits, I'd just buy the best beater car I could for cash and forego financing anything until my money situation significantly improved.

I had a guy facing BK. 80k income, 300k mortgage, two cars heavily financed. He came to me to help him out with his finances. My first suggestion was to sell the vehicles (~$50k) and buy a beater. His response was legendary... "I wouldn't be caught dead in YOUR beater."

YES, there are people on the edge who will not give up any portion of their lifestyle ...

blueiedgod

He takes the Camry to work, I take the Alero. I have the kids every day during the week and I tote them around with my son's afterschool activities and we are so cramped in that vehicle.

Ok, here is an idea!!! You drive the Camry with the kids, and he drives the Alero to work.

Take Camry for the road trips. It has to be bigger than the Alero.

I'm just tired of payin to much money into this car when I really could be in something new and with a warranty.

I think you are just trying to get confiramtion that it is OK to dig your self into a deeper hole. And you are not going to get it from here.

steine13

[..] there are people on the edge who will not give up any portion of their lifestyle ...

Oh yes they will.

First Law of Thermodynamics.
It catches up with everybody.

I don't agree with you "beater" suggestion, btw. To make that work, you've got to know how.
But a $15k Corolla, sure... that'll be cheap transportation for as long as anyone can stand it, and have good resale to boot. But you're friend wouldn't be caught dead in that, either, I'd bet.

-Mathias

neeshrn

Yes, you're right. Apart of it is wanting confirmation to get the Sante Fe, I admit that. Another part is not wanting to put new breaks, tires and all the maintenance required at 100,000 miles to keep the vehicle running when I don't want to be in it.

Take Camry for the road trips. It has to be bigger than the Alero.

Yes, it's bigger, but not big enough to house 2 carseats and a 10 year old in the backseat with room for him be actually fit and strap a seatbelt. We would have to take 2 cars as a family. Our single strollers barely fit in the Camry.

So essentially I should just keep paying the 400.00 note for the next 19mos I have versus, maybe payin another 80-100 mo for a brand new/certified used vehicle with a lower interest rate?

My head wants to stick it out a little while longer, my heart...i don't know....

neeshrn

Yes, it does, but add football gear, tae kwon do sparring equipment and a double stroller(or single), diaper bags..Oh and let's not forget groceries. Takes up significantly more space.

fezo

You won't fit all of that in a Santa Fe either. When the time comes think minivan. Once you pass two kids that's about it.

On the other hand, I've had 5 people, including two in booster seats in a 2000 Accord many times. An 05 Camry is bigger. It can be done.

oldfarmer50

"...Good beater cars are out there if you take the time to look..."

So true. I figured my son would have a hard time getting anything that ran for less than $2-3000. It turns out he has a friend who hauls away junk cars from private owners. Every once and a while a car will look rough but run real nice. The friend sells these for a little more than the salvage value.

Long story short, my son has a 1988 K-car with 133K that looks like junk but everything works for $350. If he gets a year out of it that will be the bargain of the century.

neeshrn

Yes, i agree it can be done. Unfortunately, I am 2-3 years from double booster seats; my girls are 3mos and just over 24mos, so I'll have those big bulky car seats for awhile. As of now my son is not able to sit in between those 2 or on the very edge because there is not enough space for him to strap in.

I am starting to consider at least waiting for 08's to emerge so that the 07 can have some deals attached.

lemko

Geeze, $350 is less than one month's average car payment. If he even get six months out of it, he's still way ahead. Another bonus is that car thieves are a lot less likely to mess with your beater than a 5-Series BMW. You can park it on the street without fear, and if some idiot dings it with a shopping cart so what?

k5ldb

I would try to trade it for a lease, up to 36 months. You can have relatively low payments, and you will be done with both cars when the lease is up. Some lease programs have ridiculously low rates, which makes it easier to roll in negative equity.

A FLEECE? You guys need to start intently listening to Dave Ramsey before making any more decisions or considering such a trap as this.

But yea I plan on paying more then the minimum maybe about 50 bucks more a month just so I can get out of this loan!

Cancel your cable tv and put that money with the extra $50 so your paying well over $100 a month above minimum. Better yet, use the car to deliver pizza a few nights a week and pay double payments every month.

Read the book The Total Money Makeover and follow the principles in it. By the time you're ready for your next car you'll qualify for the zero percent interest rate and be able to buy a car without paying one red cent of interest.

british_rover

A FLEECE? You guys need to start intently listening to Dave Ramsey before making any more decisions or considering such a trap as this.


I don't know who that guy is but if he calls all leases Fleeces then you need to stop listening to him. With the right program on the right car a lease can be a very, very good idea.

There are plenty of leases with zero percent interest rates and they sometimes have lease cash, sign and drive and enhanced residuals.

k5ldb

There are also winning lotto tickets and pulls on the slot machine handle that pay out too but the odds are far far greater of being the loser than the winner. Unless you have a legitimate business deduction for a lease it isn't the best way to go. I don't absolutely agree with every one of his points but his system is a far surer way to millions than any of the late night infomercial schemes and his fleece advice is at least 99% correct, unless one is somehow connected to a leasing institution or has a business reason for it.

qbrozen

yup, I couldn't agree more with BR.

You need a new radio-based financial advisor.

I make more on my simple money market than I pay in interest on my lease.

And just look at volvo's programs if you want a simple equation. They are offering up to $10k more incentives if you lease rather than buy.

kyfdx

Quit spending money, and you'll have more of it..

There.... now, can I have my own radio show.. :surprise:

british_rover

Acckkk sorry if his advice is that all leases are bad then I would have a hard time trusting all his advice.

For example...

A couple of weeks ago I leased a 2007 Ex-Service Loaner LR3 to a couple.

This is a nearly 52,000 dollar vehicle but the leased it for 439 dollars a month INCLUDING PROPERTY TAX!!!!! Strip the property tax out and you are leasing a 52,000 dollar car for 395 dollars a month.

They traded in a Junky 1997 Discovery with a million miles that was worth a 1,000 dollars. They put another 2,500 dollars down on top of that.

I advised against putting so much down on the lease but they wanted to be down below 450 a month so they put down enough money to get there.

They could have done a sign and drive with monthly payments around 500 bucks a month but whatever.

That lease has a money factor of .00106, 2,345 dollars of lease cash, plus a first months payment waiver. Land Rover gives me 4,400 dollars to reduce the price of the car and offset the miles racked up as a service loaner. We sold the car for 43,500 dollars. I think we made 250 bucks on the deal.

This was a complete give away just to unload some excess units so I didn't make any money but we lost some floorplan expense and gained a service customer.

qbrozen

$500? Damn! How many miles per year? Too bad we still got a year in the Pacifica.

british_rover

That was 10,500 miles a year and only 24 months which is the sweet spot with all that cap cost reduction going into the lease.

I don't have anymore strippy, a relative term you understand, cars like that in service loaner status but a more loaded one with voice activated nav, 19 inch wheels, upgraded sound system etc. a HSE LR3 with 56,000 dollar MSRP leases for around 670 dollars a month on 15,000 miles a year if I strip everything out. That is with only 580 bucks due at signing.

If I had a strippy one left 15,000 miles a year and 24 months are 620 bucks a months with 560 bucks due at signing. If they had just handed me their old Disco and not put any money down they would have been around 508 bucks a month.

qbrozen

oh, well, that sounds quite a bit more expensive in that case. Although still not bad if you think about the price.

Still haven't decided what we'll do a year from now on the Pacifica. Might buy it, might not. Depends if they are willing to negotiate the buyout since it won't be worth the residual.

One thing is for sure, I really really want to get away from high payments. We are just so drawn to $35K+ vehicles, though. Its very hard to keep that in check and be happy with our vehicle.

As it is, we pay about $870/mo for our 2 vehicles. While that is obviously nothing compared to some of these folks who are spending over $1k on just 1 car, it seems like a helluva lot to me.

joel0622

I don't know who that guy is but if he calls all leases Fleeces then you need to stop listening to him. With the right program on the right car a lease can be a very, very good idea.

Dave Ramsey is a guy who was an absolute financial failure that has used TN previous lax BK laws to bail himself out of terrible business plans. After he hit rock bottom 2 or 3 times and took some others with him he decided to live by the old adage. Those who can't do teach. He has a Radio Show based out of the Nashville area and is syndicated now.
He teaches a very basic premise and has made millions off of it.

1. Pay money to go to his "Financial University" where he tells you.

2. Get an emergency fund in place

3. Make minimum payments on all bills except the one with the lowest balance, and as he says attack that one with a vengeance. Then do the same with the next bill, then the next till you are debt free.

3. Call his show scream. "I AM DEBT FREE" and place your credit cards in a blender and destroy them on his show.

At no time will he tell you it is OK to finance a car, but he will tell you it is OK to go to the credit union and borrow enough to pay off your neg equity when you sell the one you owe on.

He believes the same thing that allot of folks here do. Drive a beater car and as your financial position improves so will your car.

He makes good points at times and has basically used common sense to build an empire. My only problem with him is that at times I have heard him advocate BK and he tells people that basically it is OK to screw a company out of money you owe them by negotiating balances.

The balance is the balance you borrowed so you pay it is my feelings on it.

metro123

I agree, there are good leases out there, it pays to keep your eyes open for specials.

Volvo is running some good lease deals in my area right now. I think the XC90 is like $459 a month sign and drive for two years. Mazda had a lease on the 3 for low $200's and the Accord leases were good a month or two ago, something like $259. BMW is always running specials on the 325's as well.

I read on another board recently where is was cheaper to lease an Infiniti FX35 than a Chevy Trailblazer, go figure!

joel0622

I lease my truck and Finance my wifes car. In my situation leasing makes sense and in hers Financing was the way to go.

My lease is pre paid but it basically works out to $257 a month including all my maintanence for 2 years, plus around $800 a year to insure it. Which is a cost I would have more or less regardless of what I am driving because I refuse to own a car in TN with out full coverage. To many people running around with nothing.

People that still consider them "Fleeces" are living in the past. There was a time 7-10 years ago when the lease contract was not a fully disclosed contract and it was very easy to take advantage of the consumer. In todays world if you can read you won't be taken advantage of. The contract tells you how much you paid, where your money down or trade was applied, term, payments, GFV (guaranteed future value).

stickguy

that looks like a lot to me! Especially on 2 rentals..

I can't bring myself to pay that much for wheels. I have a 1 loan at the most rule, and will never borrow for more than 3 years (with a hefty down). Of course, I haven't gotten into a lease yet, but that would be 3 years!

So at least 1 car has to be paid off, and I like to go at least a couple of years with both paid off. 3 or 4 more payments on the van and we are there. In 2 years, I can just redirect all car payment funds right to the college of my sons choice!

rroyce10

I gotta ask ....



You're in the car biz ... why didn't you just pick up a nice clean little Ford truck at the auction, drive it for 2/3 years and get back most (if not all) of your money back.? ...

Now you'll be out $6,200 and you'll get the expensive opportunity of repeating it again in 24 months.



Terry.

qbrozen

Let's see ... so far this radio show host's gems are that heavily subsidized leases are "fleeces" and that I should stick my credit cards in a blender and STOP getting 5% off all my purchases??

So I don't have my own show because I'm not savvy like that, huh? Oh well.

qbrozen

I'm really gonna try on this next go around. It just never seems to stick. I always WANT more, but then I get it and I feel like I should have gotten less ... until car shopping time comes around again.

I had it for a short time. My volvo was paid off and we just had my wife's Pilot. Then I got a raise at work and my eye started wandering. That was 3 years and 3 different car payments ago.

I keep swearing that I'll get through my lease, then buy something with cash. Of course, then I look at things coming down the pike like the 1-series, Challenger, G8, etc, etc.

Maybe we can manage to cut a deal on the Pacifica and pay cash on that. Of course, then I think "hey, a diesel suv would be nice instead."

british_rover

I think that was Joel's original plan and some how he got inpatient.

joel0622

Honestley, for no other reason then the fact I like driving new Trucks.

metro123

Holy cow ! Terry's back !!

Welcome home.

joel0622

LOL that is true, I got the fever, and when some programs for plan customers came out I had to pull the trigger