Car Loan Headache

[randilla]

Ok, so my wife and I have a really lousy car loan with a ridiculous interest rate. We'd love to get rid of it, but are about $5000- $6000 upside down in what we owe so we really can't sell it. The monthly payment is seriously destroying our attemps at having a wise monthly budget to allow for savings, etc. Would we be better off just repossessing the car and taking the hit hit on our credit rating, since that would free up several hundred dollars a month that we could save. Or do we just tough it out for another 4 years? I appreciate any feedback you all might have
Thanks!

[Contrary Housewife]

Is it something you can get refinanced at a better rate?

Can either of you pick up a part time job to put extra money on the car payment?

Is the car worth keeping? If it is only a couple years old then you have a lot of miles left on it, regardless of what it is "worth". If it is unreliable and needs major repairs, it's probably not worth the trouble to keep paying on it.

Can you manage without the car?

[Palooka]

Also if the car gets repo'd the bank can still come after you for the difference in the loan that they would sell it for.

I would just try to make a really good budget and hang in there. Good luck.

[Momto2Boyz]

Palooka is right, if they repo it and it isn't in the middle of a bankruptcy, they will come back to you for what you still owe after it is sold at auction, and it'll probably be alot.

I used to work at a credit union as a loan officer and I saw this ALOT! There aren't many options when you get into that situation, but there are a few.

It depends on how your credit is. If you can refinance the car loan at a much lower rate, but end up with some that can't be refi'd due to the value of the car, one option is to refi the portion you can, and get a personal loan for the difference. The personal loan will be at a higher rate (but possibly still lower than your current car rate), but at least the majority of it will be at a lower rate, when you refi the car.

The other option, if the payments are killing you, is to sell the car and get as much as you can for it, and then get a personal loan to cover the difference. Unfortunately, you'll still be paying a bit for a car you don't own, but your large monthly payment will be gone and you won't have the sting of a repo on your credit. But this option would only be good if you are desperate to get out of the loan.

Once you are upside down in a car loan, there is no way to get out of paying the difference. Wether you do it with a loan or just over the term of owning the car. I used to have so many people come in and ask me about their options, and they were always surprised that there are no options that get them out of paying the difference, but really there isn't!

Hopefully you can find a solution that works for you!

[CrazyCat]

I'd try to sell it.

Either that...or your stuck with paying it off.

Yes..if they repo you will owe the difference once they sell it. What you owed them..and what they got out of it. It could be $1000's.

[ladykemma2]

perhaps a signature loan from local bank, spread out over a longer period of time to make the payments smaller.

[craftypam]

Palooka is right, if they repo it and it isn't in the middle of a bankruptcy, they will come back to you for what you still owe after it is sold at auction, and it'll probably be alot.

I used to work at a credit union as a loan officer and I saw this ALOT! There aren't many options when you get into that situation, but there are a few.

It depends on how your credit is. If you can refinance the car loan at a much lower rate, but end up with some that can't be refi'd due to the value of the car, one option is to refi the portion you can, and get a personal loan for the difference. The personal loan will be at a higher rate (but possibly still lower than your current car rate), but at least the majority of it will be at a lower rate, when you refi the car.

The other option, if the payments are killing you, is to sell the car and get as much as you can for it, and then get a personal loan to cover the difference. Unfortunately, you'll still be paying a bit for a car you don't own, but your large monthly payment will be gone and you won't have the sting of a repo on your credit. But this option would only be good if you are desperate to get out of the loan.

Once you are upside down in a car loan, there is no way to get out of paying the difference. Wether you do it with a loan or just over the term of owning the car. I used to have so many people come in and ask me about their options, and they were always surprised that there are no options that get them out of paying the difference, but really there isn't!

Hopefully you can find a solution that works for you!

I know someone whose car was repossessed 2 years ago and by the time she tried to deal with them they would not take payments; they wanted all of the money; which is crazy if you can't make the payments how would you be able to pay for all of it. They haven't contacted her at all and she is still not paying for it. I don't understand how this is happening; but it is.

[Palooka]

I know someone whose car was repossessed 2 years ago and by the time she tried to deal with them they would not take payments; they wanted all of the money; which is crazy if you can't make the payments how would you be able to pay for all of it. They haven't contacted her at all and she is still not paying for it. I don't understand how this is happening; but it is.

I know one person in real life that got away with a van repo. This bank obviously didn't do much. I am sure it was on their credit report but they never paid a dime back and this said person has bought several cars since then.

However this is how most creditors work. When something goes into collection, they will not work with you, but all in full or nothing. I sometimes think loans would be paid for... if the creditors would work with people, but they don't. You would also think it would be in their best interest too.