Selling Car with Negative Equity

[Big Saver!]

hi - I am needing some advise on selling my car that has some negative equity :-(

-I owe $28K
-KBB says it is worth $24,500 for private party sale
-I posted an ad on Craigslist for $26,500
-Someone is wanting to buy it for $22K -- ready to close the deal anytime.
-I would need to come up with $6K to cover the spread.

Is me paying $6K to get out of a $28K loan considered stupid?? I do have the money but it would wipe me out. I also have other debt to pay off (about $45K more) and with this one gone, I could have all that paid off probably by summer or fall of next year.

What should I do? Pass this guy up & hopefully get a better offer or take it and pay the $6k?

I've made so many mistakes that I don't fully trust my judgement :-(

please advise -- thank you!!

[photo]

Have you made a counter-offer?

[JustBill]

Since you're prepared to write the check, and you apparently don't need the car, and if you turn your buyer down you're in essence buying the car back for 22k, I say cut the losses and take the deal before another payment is due. Better to be 45k in debt than 73k with 28k on a depreciating item.

[bjl584]

Originally Posted by Big Saver!

hi - I am needing some advise on selling my car that has some negative equity :-(

-I owe $28K
-KBB says it is worth $24,500 for private party sale
-I posted an ad on Craigslist for $26,500
-Someone is wanting to buy it for $22K -- ready to close the deal anytime.
-I would need to come up with $6K to cover the spread.

Is me paying $6K to get out of a $28K loan considered stupid?? I do have the money but it would wipe me out. I also have other debt to pay off (about $45K more) and with this one gone, I could have all that paid off probably by summer or fall of next year.

What should I do? Pass this guy up & hopefully get a better offer or take it and pay the $6k?

I've made so many mistakes that I don't fully trust my judgement :-(

please advise -- thank you!!

Is it absolutely necessary that you sell the car now? If not, I would ride it out until you can break even on the deal.

[Obiwan]

My answer would depend on a couple things. (1) what will you do for transportation after you sell the car? Will you have to go out and buy another car or will you begin to use public transit? The reason i ask is if you need to buy another less expensive car, you would have to add the cost of the new car plus the $6k negative equity you would have to pay. If you have the total amount available and it still makes sense, I would say go for it.

(2) How does this car compare to your income and monthly budget? If this car does not represent an excessive amount relative to your income and budget, and you like the car and will likely keep it for a very long time, you could use the $6k you have to pay down the loan and keep the car. Sometimes it may be better, since you already have the car, to keep it, pay it off and ride it till the wheels fall off. provided its a good car with a solid reputation for reliability, you've properly maintained it, and you can afford it.

[Nightfly]

If you really want to sell the car: it's been my experience that when you have a "live" offer on a big ticket item like a car - then take it. You're talking about a buyer that is only a couple of grand off from your original price. That's pretty good. Don't be like so many other sellers who "hold out" for the last possible penny (happens all the time), while blowing off decent live offers. Not worth it. Leaving a couple grand on the table is better than forsaking over $22k on something that is depreciating and that you're upside down on anyway. You might as well take the hit now; selling an over $20k car in this market is tough enough. Take the money and run, then buy yourself a decent used $5-6k car while you get out of the hole.

For purposes of this sale: forget what you owe on it or what you put it on CL for. Potential buyers don't care one bit. They care what KBB / NADA / Edmunds say the car is worth, and those amounts are starting points, period. Maybe counter at $23k but if the buyer balks, take the $22k and be glad you did.

[JoshuaHeckathorn]

It sounds to me like you bought more car than you can afford. If you've got a legit buyer, I would say cut your losses now and sell. It's worth it to at least make one counter offer, which the buyer is probably expecting anyway. You should be able to get a little more out of the deal.

Hopefully there's mass transit in your area so you can go without buying another car. Then focus all your attention, and money, on getting rid of that $45K in debt. It'll be much easier to focus on that with the big monthly car payment out of the way.

[paul_btam]

I agree with a few others here. I sounds like you will be better off finance wise without the car and the debt. As long as you have a way to get around I would say sell the car.

Try to get a little more than $22k first though