Upside Down On Car Loan
The best way to get out of a upside down loan is to keep the vehicle as long as you can, if you hold on to the vehicle after it’s paid for, your payment per month will go down, and you can then build a nest egg big enough to purchase your next car in full,and never make that mistake again
I made the mistake of buying to much vehicle, and then buying the extended ford warranty that landed me in a car loan of over $300 dollars a month for a 60 month loan term. From my research there is not much I can do but I decided to make a plan to deal with this mounting problem to the best of my ability.
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*** 4 years old now 38,000miles – 7.5 years old when paid off , estimated 13,000 miles per year, estimated 83,500 miles when paid off,
*** 60 months $19,113- 42 months left 3.5 years $13,379 , 320 a month paid $5,734, paid for 2012
*** Current monthly payment is 318.54 for 60 months, I will keep for 96 months meaning I paid $199 a month for the last 96 months to drive this vehicle.
*** That’s about 3 years with no payment – 318.54 * 36 = $11,500, If I put that money away when I purchase my next car I should have - $11,500
*** Plus a 10.5 year old vehicle with 120,000 miles, should be able to sell on craigslist for at least $2,000
*** Now I have 13,500 for a new vehicle-
*** Then I buy a 3 year old Ford Escape from a private owner or dealer for about 11,000 ( it should be 2015 now) so a 2012 vehicle paid in full
*** I now have $2,500 dollars
Now that I have my raw statistics I thought well trading this car in will be a loss for me Kelly blue book has the trucks trade in value at around 6,500 and 8,500 for a private sale. If I get rid of the car by trading to a dealer, or selling privately and purchasing a new vehicle I’d owe even more money.
I then decided maybe I can refinance my loan for a lower amount and reduce payment using this method, I then found out my interest rate was good and I couldn’t beat the current rate.
Looks like I will keep the vehicle for a long time and make the best of a worst situation. I will also do my best to pay down more of the principal quicker. I hope this can teach others not to do what I did, learn from my mistakes.
