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

Kirstie_H · May 2004

A newspaper reporter is looking for someone who has financed a new car for longer than 60 months and is still paying for it. Please send your daytime contact info to jfallon@edmunds.com no later than Wednesday, May 19, 2004.
Thanks!
Jeannine Fallon
PR Director
Edmunds.com

lancerfixer · May 2004

You won't find any...they're all buried.

Ouch.

maximus3000 · May 2004

Thanks for your response!

I have seen ads in the newspaper of private sellers asking
for someone to 'take over payments'. I want to do the same thing but did not know the exact details on how it works.

I just thought I could get some insight from this forum!

Would it be possible for the car to get registered and insured in the name of the person taking over payments and still keep the lien in my name with the bank?

driftracer · May 2004

you're liable for the loan, and have to trust your credit to someone else, which is insane at best - not even fathomable.

The only way to do this right is to have the other person get a loan and pay off your loan - PERIOD.

turboshadow · May 2004

those 'take over payments' ads. In my experience these guys are unwilling to make any other kind of deal because they are buried so far underground in the car that daylight is just a hazy memory. I scratch those cars immediately off my list.

There's someone a couple of blocks over trying to unload a Mountaineer for what I must assume to be payoff because it is priced 50% over market value.

People are like crows...they love bright, shiny, new things.

Turboshadow

driftracer · May 2004

if someone wants to "take over" YOUR payments, it's usually because they can't get "payments" of their own, meaning their credit is thrashed - not the kid of person to be trusting in a business proposition, and certainly not with your credit.

They ruined theirs - why wouldn't they do the same to yours? Obviously, their contracts didn't mean anything to them, why would yours be different?

wibble · May 2004

"if someone wants to "take over" YOUR payments, it's usually because they can't get "payments" of their own, meaning their credit is thrashed."

If someone wants to take over your lease officially then they need to get approval from the leasing company. Letting someone take your car that still has your name on the lease contract would be an extremely stupid thing to do.

driftracer · May 2004

"Letting someone take your car that still has your name on the lease contract would be an extremely stupid thing to do."

You summed it up well. You may be surprised at the number of friendships, acquaintance relationships, and "I don't really know them" relationships that are ruined because someone promises to make payments on a car in that situation, though. Inevitably, something comes up, like buying concert tickets, that is more important than making a car payment, and you know the "ruined relationship and credit" rest of the story.

As stupid as it is, it still happens. I just sold an '85 MR-2 TWICE on ebay. The first kid who won the car through "Buy It Now" fully intended to make 4 payments on the car and thought it would be cool with me, AFTER I delievered the car to Atlanta and signed over the title - yeah, that's happening...

He went into the deal thinking that people actually do business that way - the problem is, SOME DO!

wibble · May 2004

"those 'take over payments' ads. In my experience these guys are unwilling to make any other kind of deal because they are buried so far underground in the car that daylight is just a hazy memory. I scratch those cars immediately off my list."

This isn't always the case. I had an 2003 Infiniti M45 that just wasn't practical for where I was moving to. Checking the wholesale trade figures I was about $3000 upside down BUT my lease payment was $356 a month which for a $47000 new car is pretty impressive. Most other M45s on the lease swap site were around $550 to $700 (Those guys must be really upside down). Needless to say mine was snapped up in no time. Also, the person taking it over had to go to an Infiniti dealer, fill in a credit app and get approved. The lease is now in his name, not mine.

driftracer · May 2004

and GOOD JOB!

mirth · May 2004

...with a lease you're only responsible for paying off the agreed upon depreciation amount, and then you can turn the car in. Since you're not paying off the whole car, the payments are low. That combo could easily be attractive to someone.

But maximus owns the Tahoe and I don't see him being able to get a credit-worthy person to take over his debt when that same person could go get an equivalent Tahoe for $7K less. I would think that the only people that would be interested in such a deal wouldn't be able to qualify with the lender to take over the payments anyway.

maximus3000 · May 2004

Wibble,

You said you had someone assume(take over) your lease, was it
a complicated process and was it expensive?

rroyce10 · May 2004

.... ** because they are buried so far underground in the car that daylight is just a hazy memory ** ....l.o.l. that's about right ..

Terry.

lemko · May 2004

Man Robs Bank to Buy Car for Fiance:

http://www.philly.com/mld/philly/news/local/8781812.htm

casualfc · June 2004

How do I get a bill of sale when I sell my car? Is that just a letter I prepare? I still owe on the car so the bank has my title.

KCRam · June 2004

A bill of sale is a receipt form that yu prepare, much like onme you get from the dealer when you buy from them. Things that MUST be on it:

- Name/address/phone of seller
- Name/address/phone of buyer
- Year/make/model of car
- Mileage
- Agreed selling price
- "As is" statement (this is wording that essentially says you are selling, and the buyer is accepting, the car "as is" with no implied or express warranty)
- Signature of seller
- Signature of buyer
- Date of transaction

You can get bill of sale forms from most office supply stores. When you complete the sale, keep the original, and give a carbon to the buyer. I always recommend signing in blue ink instead of black - black can be easily replicated on a standard copier.

As far as getting the title... the safest way to do this is the following: once you've agreed on a price, have the buyer prepare two checks - one payable to the bank for the payoff amount, the other to yo for the difference. The bank will then return the title upon receipt and cashing of the check to them. Call the bank ahead of time and alert them that it is coming, so that this can be expedited.

kcram
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ghulet · June 2004

CarMan@Edmunds · June 2004

One can also find bill of sale forms on-line. Here is one site that I came across which sells them: Auto Bill of Sale Forms.

Car_man
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KCRam · June 2004

thanks ghulet - I did leave that out.

kcram
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Smart Shopper and Wagons Message Boards

ghulet · June 2004

...I'm pretty sure those forms can be purchased at just about any office supply store for less than a dollar each, no? I guess this is an extreme case of 'paying for convenience'.

driftracer · June 2004

your bill of sale included VIN, description, mileage, date of sale, places for both signatures, and room for a notary stamp.

Also, the phrase "seller is not liable for any warranties, expressed or implied, nor is the seller promising and future repairs or adjustments".

Trust me on that last one - learned the hard way.

akangl · June 2004

No warranties expressed, implied, thought of, considered or otherwise. Also, absolutely no refunds and no you can't give it back either.

Now you guys see why we are keeping the Chevy?
Which, btw, is back in the repair shop with the mechanic scratching his head and me feeling a tremendous sucking feeling in the wallet.

rroyce10 · June 2004

.... "Buyer understands and agree's that there is nothing owed and nothing promised" ...

            X___________________________



                             Terry.

driftracer · June 2004

"expressed" and "implied" warranties are covered by the Magnusson-Moss Warranty Improvment Act and are "implied" on ANYTHING sold (even a toaster at a garage sale) - your buyer has to specifically waive their rights to a warranty of any type.

casualfc · July 2004

I have a 99 Jeep Cherokee Sport, which I still owe over $7,000 on. A few weeks ago I was in an accident with damage to the rear, $2500, which I was paid for. I've attempted to sell it as-is to some body shops. Most were uninterested or gave low offers and the only one that was interested wouldn't go through with the deal because I can't give him the title until I've gotten all of his money.
Now I don't know what to do. Should I get it fixed and then then try to sell it, even if I lose money?
What I'm looking for is the quickest way to be rid of this Jeep, its debt, and into a nice cheap Toyota. I'm sure many have been in similar circumstances. Suggestions?!?!

mirth · July 2004

Post the Jeep on the Real World Trade-In Values topic with a detailed description (miles, options, what state you live in) and a detailed description of the damage, and see what Terry says it's worth. Personally, I think your best bet is to repair the damage before you try and sell it. Also, not sure I've ever seen a "cheap" Toyota for sale, unless you're referring to maintenance costs.

stickguy · July 2004

Ditto on the fix it advice. If it is going to cost $2,500 to fix it right, I can almost guarantee that any buyer will deduct way more than that to buy it as is. Selling damaged goods is difficult.

Might be a different story if it is really just cosmetic damage (a cracked bumper cover for instance) that may not even need to be fixed, but in you case, it sounds like much more than that.

Once it is fixed, you can make a reasonable decision on whether to keep it or not (assuming you mostly want to sell because of the damage).

yusuf1 · July 2004

Hello,good advisors. I have '99 Accord Lx with 127000 miles on it. Still owe about $6800. Payments are painful-$335 since I've been downsized. Does trading in for a newer vehicle to lower payments sound reasonable?? Ford is offering some rebates so I thought about a Taurus. I know, an Accord for a Taurus, but I need some help. Or maybe it'll just be better to get a second job and pay the Accord off. Please advise. Thanks

kyfdx · July 2004

You can't get out of debt by spending more money. Try to separate the car from the payment. You drive a nice, cheap car... Buying a new or newer car will cost you more in the long run.

You owe $6800. If you roll that into another car loan, you will still owe $6800.

If you are having trouble making the payment, the second job idea is a great one.. Get the loan paid off, then if your finances are in order, and you want a new car, then go for it.

lemko · July 2004

You have about 20 months left of payments on a car that has kept you happy versus 60 or more on the Taurus which you may or may not like.

perna · July 2004

This topic is like one half of a statement.

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

The rest of it goes, "So, I keep on paying until I'm NOT upside down!"

I can think of very few scenarios where this wouldn't be the case.

What I don't get is how someone can owe $6800 on a '99 Accord, or a '99 Cherokee Sport with $7k attached. These are *six year old vehicles*. It just doesn't add up! How does such a thing happen?

audia8q · July 2004

nobody would be upside down if they purchased what they really could afford. haha.

Of course, if people purchased what they could afford, many car dealers would be out of business.

lemko · July 2004

...Kia and Hyundai would dwarf all other automakers.

beachtwin · July 2004

I financed a 2004 Acura TSX (no nav) for ~30k. I still owe the bank $26000 on my 60 month loan. I'm going back to school and need to lower my current total car loan from $540/mo payments to somewhere below $300/mo. I did the math and assuming this is correct- the most I can finance for this payment is a total of ~$15000 including the difference I get on a trade in our private sale of my car.

My options are to a)sell privately or b) trade in. The negative equity afterwards would be rolled into an a) new car or b) used car. I'm hoping to sell for at least 23k leaving 3k to roll into a new or used car. Right now I can't afford to pay off the 3k myself. Is it better to trade in for a new car (b/c of lower interest rates) or a used car? OR if I sell is it better to buy a new/used car?

Also can a bank just "roll" over the difference from the original loan to a loan for a new or used car?

qbrozen · July 2004

well, first, i gotta ask the obvious question: how did you finance $30K on a car that cost $26,500 brand new (and that is even assuming you paid full MSRP)?

2nd, I gotta point out that, given the amount you want to finance now ($15K) and the fact that you would be, in your scenario, $3K upside-down, and the fact that you have no money (i'm assuming this based on the comment that you can't cover the negative), the only new car you could afford is a stripped down Hyundai Accent or Kia Rio (or maybe that new Chevy Aveo or Suzuki something-or-other). So unless you want one of those, you'd be looking at used cars.

3rdly, and maybe someone has a way around this that I don't know of, you can't sell it on your own if you don't have the money to pay the remaining balance. The bank isn't going to release your title until the balance is paid in full. And I really doubt you'll find a buyer who will be happy with the terms that include "you give me the money now, but I can't give you the title until I find a way to pay the rest of the money that I owe." So I believe your only solution is to go to a dealer for this transaction. Problem with that, of course, is you won't get the kind of money you need on your TSX.

Sorry that I don't have anything better to share with you. Good luck.

blueiedgod · July 2004

I didn't want to be hard on beachtwin, but what were you thinking buying a $30K car when you knew you were going back to school? I assume you bought the TSX when it first came out, and that is why you paid $30K on a $25K car. Now, you have to pay the price for being the first kid on the block with a "shiny new bike."
Now, you have a 1 year old car, calculated from the payments and your payoff, which probably 12,000 miles that you want to sell for $23K. I don't know too many people who would buy a used car for $2000 less than a brand new one at the dealership (current price on the 2004 TSX no navi is $25,600).
I hope you have learnt your lesson and will never want to be "the first kid on the block with a new shiny bike"
There is a solution for you, if you are planning on taking a school loan, you can include the car in it as well. But, you have to make a promise to your self, to keep the car until you at least pay off half of your school loanm which is at least 10 years. You don't want to suddenly feel that you are on top of the world with no car payment and a $20K worth of car equity in your hands, and get yourself into a more expesive car, thinking that you can use TSX as a downpayment on that "shiny new bike that no one else has"
You have to excersise restraint, lack of which got you here in the first place.

david1973 · July 2004

Well I am guessing that 30K loan also includes some taxes so 30K on a 26K isn't that unreasonable. Well if you think zero down is reasonable. That money you paid in taxes is gone (well in some states you only pay on the difference between the trade in and your "new" car purchase). 23k seems very optimistic to me. Edmunds TCO puts the value of a 1 year old tsx at 20460. I am sure you can get a good estimate from the real world trade-in values discussion. Unless you have another line of credit you pretty much are going to have to go to the car dealer. And either way you are going to have spent a lot of money (~7K min) to drive that car for one year.

bobst · July 2004

Go to the Acura dealer and tell them your sad story. Maybe you can trade in your TSX for the cheapest used car they have on their lot. Of course, you will still be flipped, but your payments will be less.

sebring95 · July 2004

The only way to come out of this alive is to sell the car for as much as you possibly can and you'll have to find a way to finance the difference to pay off the loan. Credit card, family, personal note, etc. Then you're going to have to go buy a cheap used car and get your payments WELL under $300/month so that you have funds leftover to payoff the other note/loan. Hyundai/Kia might be your only chance on a new car. They probably will loan enoughh to buy the new car and payoff the old one but you'll be buried even worse for quite some time.

blueiedgod · July 2004

A student loan can accomodate the cost of the car, and defer the payments until after graduation. This is not the wisest solution, but still better than going to Kia/Hyundai route.

fish8 · July 2004

I think that is a really bad idea. If you take out a student loan your freshman year, and you don't start paying it off until after you graduate then you will have a 4-5 year old car when you start paying on the loan. By that time you will need a new car and will have 2 loans to pay off. Very poor money management in my opinion.

blueiedgod · July 2004

I realize that this is not the best solution, but this is the only one that the OP has aside from leaving the car with in Newark/Jersey City, NJ and then claiming it was stolen. Hopefully, he/she has GAP insurance prior to doing so.
If the OP is going for a graduate degree, the cost of the car will be minimal compared to the loan amount. I assume OP's job does not offer tuition reimbursement, otherwise he/she would not want to get out of the vehicle.

I also suggested keeping the car for 10 years or more. However, since the TSX purchase was an impulse purchase in the first place, I highly doubt that OP will follow through.

The reason I classify this as an impulse purchase, no one is going to buy a $30K car knowing that they will be going to school in a year. Going to school is not something that "just comes up." The prep-courses take a few months in advance to GMAT, LSAT, MCAT test dates, which are usually a few months in advance to the semester start. If the original poster was thinking of going to school when the vehicle was purchased, then he/she was already either taking or have signed up for prep-classes in anticipation of entering graduate school.

janz · July 2004

by leaving the car somewhere claiming it was stolen. I hope that beachtwin learns something from this experience and has better judgement than that!

rroyce10 · July 2004

....... Hmmm, I will have to look this one up, isn't 18 months the minimum for that charge.? .. but he'll get a lot of "experience" when he has to bunk with Bubba for 15/18 months .l.o.l....

Terry.

wibble · July 2004

"What I don't get is how someone can owe $6800 on a '99 Accord, or a '99 Cherokee Sport with $7k attached. These are *six year old vehicles*. It just doesn't add up! How does such a thing happen?"

Quite often because folks have rolled negative equity in. I had one lady in last week who owed $26k on a 2000 Nissan Altima.

driftracer · July 2004

van Kirby vacuum cleaner salesman negative equity story if you like...

rroyce10 · July 2004

........ You must not get out much .. there is oodles of folks that owe $17,0 on their $13,0 Nissans, bunches of peeps that owe $35 big ones on their $25,0 Benz and tons of folks that owe $7,0 on their $3,500 Sunfires ... thats what happens when you trade every 28 months or so with little or no money down .. of course, we can always blame the dealer, thats the easy way out .l.o.l..

Terry ;^}

wibble · July 2004

I get out plenty

$20K upside down on that Altima is the worse I've seen yet!

rroyce10 · July 2004

...... How about owing $39,733.80 on a 99 740IL with 81k on it, and it needs Everything ................. ouch.

Terry :0

driftracer · July 2004

I sold a guy a Mark III conversion (high top) E-150 Ford van - pretty red color - seems he was a Kirby vacuum cleaner salesman who was in charge of the local franchise.

This particular van had a chassis price of $24,700 and an MSRP, with the conversion, of $49,995. (Yeah, ouch)

He was a total jerk to deal with, but we got it all done, and he added an extended warranty, paint seal, a few other goodies like a visor (we installed, OTD was $700), a bug shield, different wheels ($1500)...his total to finance was over $51,000.

He came back 11 months later with 57,000 miles on the van, a few horse bites (that's Wyoming talk for dents and dings), needed tires, had never been washed, carpeting would need to be replaced (between mud and McDonald's attacks).

We ACV'd the van at $15k - since he was paying 15% interest, he still owed around $49,500...

$34,500 upside down. After he was such a jerk to deal with and tanked my CSI, it was a pleasure to tell him we could trade him out of the van with $35,000 down...

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

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