Well, I am stupid to start.
I rolled some money into my 2013 GTI and I am upside down, a lot.
As of today I owe about $24,800. Car is worth way less than that and making these $427.33 a month payments is killing me.
What do I do?
Well, I am stupid to start.
I rolled some money into my 2013 GTI and I am upside down, a lot.
As of today I owe about $24,800. Car is worth way less than that and making these $427.33 a month payments is killing me.
What do I do?
There's no easy way out. No matter what that negative equity from the last car and what you have from this car will need to be paid for eventually. The best you can hope for is to just suck it up and deal until you get to a point where you are more or less even then sell and start over with something cheaper. You might also be able to re-fi the loan at a better rate or longer term to help lower the payment. Unfortunately there is no easy way out.
Sell it, pay off what you owe and buy a cheap beater?
Tough situation but I'm not judgemental about it.
The first hard fact is that you owe the money, there is no way out of it.
There may be some was to ease the monthly payments but then increases the time period of how many years you will be making payments.
How good is your credit score?
Do you own a home?
Sonic is right. It's a E36 M3 situation. Here are your mostly undesirable options-
1) suck it up and keep paying as much principle down on the loan as possible. Seriously, every cent you can, overpay as much as you can afford every month until you are break-even or have some equity in it.
2) Sell it short and either take a loan or find a way to pay the gap, buy a $500 beater and lick your wounds until you're out from under it.
If you are SERIOUSLY IN DANGER of getting it repossessed, call the bank that holds the note and be explicitly honest with them. Some large banks offer credit counseling and short-sale based buybacks without killing your credit... but most likely they'll at least try to work with you to minimize the damage, both to your credit and their asset.
My sister did this exact thing, and before anyone knew otherwise, she was paying $460/month on a crappy ex-rental fleet G6 that was falling apart around her. We (wife and I) ended up loaning her out enough money to short-sell it and pay off the loan, on the premise that she would drive a beater that I decided upon and maintained until her loan to me was paid off. She drove a beat to E36 M3 Saturn SC2 for 4 full years, but at least she was debt free and without any credit damage.
Either way, good luck. It's a E36 M3ty situation regardless.
Over pay the patments to pay it down is hte only option that makes any sense. Tax return? Send it in. Bonus? Send it in. Time to pinch pennies, eat more sack lunches and pay it down as quick as you can.
Any options in the VW buyback/payout plan that might help?
Do you have gap insurance? Do you have a brick or large rock available? Do you have any tall cliffs near you?
Seriously though, you're kinda stuck with eating a loss or sitting it out. The only brand new vehicle I bought for myself was an 03 GTI 20AE. After 1.5 years of $500 monthly payments and it being a garage queen I just sold it for a loss. Life lesson learned.
And these stories are exactly why I refuse to go longer than a 3 year note and $250/mo. If I don't have positive equity in the vehicle the second that I drive it off the lot or don't have the up-front cash to get numbers to fit my criteria, I can't afford it and shouldn't buy it. It's really hard, I get it, because everyone, myself included, gets shiny object fixation and self-justifies inside the dealership... but you have to really objectively ask yourself if it's worth it. Because 90% of the time, it isn't.
You've got about 60 payments left, right?
I'd just pay them. If it's at a low interest rate in five years you'll have an 8-year-old paid off car.
Everyone has given you all the facts and I feel your pain.
I didn't put any negative equity in my BRZ when I bought it new, but even for a niche vehicle the resale on these has absolutely PLUMMETED.
It's not the first time I've bought a new car, but I've never owned a car that has dropped so much value in so little time. I bought my 2013 Mustang GT new, drove it for 7 months and got the same for trade-in as I paid for it, for example.
So I'm just cutting out my other "fun" spending (going out to eat, good booze, etc) so I can hammer even larger payments on it then I am now (I pay 10% more than the min every month) I should be able to approach double the $450/month in a few more months.
Then I'm going to buy a cheap beater pay it off in a few months......and start looking at buying another toy, that won't have to be used everyday.
NEALSMO wrote: Do you have gap insurance? Do you have a brick or large rock available? Do you have any tall cliffs near you?
Lending the car to a careless friend who smokes a lot is probably an easier way to go.
Wall-e wrote:NEALSMO wrote: Do you have gap insurance? Do you have a brick or large rock available? Do you have any tall cliffs near you?Lending the car to a careless friend who smokes a lot is probably an easier way to go.
You = Genius 
golfduke wrote: And these stories are exactly why I refuse to go longer than a 3 year note and $250/mo. If I don't have positive equity in the vehicle the second that I drive it off the lot or don't have the up-front cash to get numbers to fit my criteria, I can't afford it and shouldn't buy it. It's really hard, I get it, because everyone, myself included, gets shiny object fixation and self-justifies inside the dealership... but you have to really objectively ask yourself if it's worth it. Because 90% of the time, it isn't.
This x several bazillions.
Regarding the op, most of us have been there, myself included. I think all of the available options have been covered. You're stuck with the debt no matter how you slice it.
Selling for a loss and paying the difference while driving a beater could be dangerous. If that beater takes a E36 M3 while your income is stretched thin paying down that debt you could be hosed.
How is your credit score?
Really, you have few options. The first and most obvious, but not necessarily best, is to pay down the principal as fast as you can.
Next option, call your bank who you have it financed through. See what your options are for lien removal if you want to sell it--what would the interest rate and payments be on the remaining unsecured loan?
Last option is to take it in to a dealer that has a [used] car that you want and offers financing. Get a loan on that new [used] car, trade in your VW. Sales tax goes way down. You're now left with a loan for the difference in the original loan and the price of the used car (the dealer would pay off the original loan)
I'm in the same situation. Living conditions changed for me. I'm now paying 75% more for a roof over my head. It's gotten bad enough that I'm skipping meals because I can't afford to buy food. No chance in Hell I'll be able to put down more than the minimum each month.
It's scary.
Appleseed wrote: I'm in the same situation. Living conditions changed for me. I'm now paying 75% more for a roof over my head. It's gotten bad enough that I'm skipping meals because I can't afford to buy food. No chance in Hell I'll be able to put down more than the minimum each month. It's scary.
What do you have that you're upside down on?
2015 FR-S. I owe about $22,000. 3.9% interest. I might try to talk to local credit unions to see if they offer lower rates.
I love this car, but it's slowly killing me.
Appleseed wrote: 2015 FR-S. I owe about $22,000. 3.9% interest. I might try to talk to local credit unions to see if they offer lower rates. I love this car, but it's slowly killing me.
Try Baxter.
people ask my why I'm not buying a new minivan. I'm buying a 2013 or 2014.. It's because.. umm..
This.
In reply to mtn:
One in Crystal Lake.
Thanks. It's a start.
I'm confused....
Ever since I've been a grown up, I've known that new car purchases via a loan are "upside down" the moment I sign the paper. Cars depreciate. Even if you buy it with cash, a new car will be worth a lot less- so if you sell for cash a year later, you will get less than you paid.
Do people think that has changed?
The number of new cars that normal people can afford and will appreciate is zero. Heck, the number of new cars that will appreciate is so very tiny.
Even a 1, 2, or 3 year old car will continue to depreciate.
Are people getting cars and not knowing that?
@tjbell - define "payments are killing you"? Do they affect your ability to do fun stuff, or do they affect your ability to pay the rent/mortgage and put food on the table? Both suck but one is obviously more problematic than the other.
First, is your loan a rule of 78/sum of digits type loan? If so, you'll pretty not benefit from trying to pay down principal faster as these loans are designed to maximize the amount of interest you pay.
If it's a simple interest loan, one option is trying to overpay every month if you can to get the principal down, then sell the car if need be.
Another option would be to check if you can get a signature loan for the amount you're upside down and then sell the car and make the lender whole that way. You'll still have to find some scratch to pay for a beater at that point though.
Depending on the interest rate it might be possible to get you a lower payment if you can refinance the car loan at a lower interest rate and get a signature loan to pay for the upside down amount, but that would only work if you're paying a pretty high interest rate on your car loan and are able to qualify for a much lower rate.
In reply to alfadriver:
There's a difference between being upside down (ie, owing more than the car is worth) and having equity in a depreciating asset. For example I owe some money on the ND, but I'm not upside down as the car is worth more than I owe due to me bringing a substantial down payment to the table.
It still sucks from an investment standpoint but it's a different situation than the OP is describing (I think).
What is the interest on that loan! That payoff is like a new GTI with tax after some negotiation. They start around 25K right MSRP. Did you roll in money that you were upside down on from another car?
How many miles are on it dictate how really hosed you are. 15K miles and yeah you can get 18K or so PP for it. 5-6K on a private 3 year loan is only 180$ or so a month, which would suck but might be better. 40K miles and nobody is going to touch it above say 14K, then you really need to start thinking about keeping it and just taking the pain.
You'll need to log in to post.
