car debt

[Joe351]

I bought a fairly expensive car last year (30k)I recently took a large pay cut,almost 50% and can't begin to pay for this car,unfortunately I would lose about 5,000 if I sold it according to the kbb.I know it sounds sleazy but what would happen to me if I just let the bank take it?

[maat55]

The bank will either sell it or auction it off to an investor. You will be liable for the remainder of the balance. It would serve you better to sell it yourself and take out a personal note for the rest.

[JustBill]

Originally Posted by Joe351

I bought a fairly expensive car last year (30k)I recently took a large pay cut,almost 50% and can't begin to pay for this car,unfortunately I would lose about 5,000 if I sold it according to the kbb.I know it sounds sleazy but what would happen to me if I just let the bank take it?

You'll lose more than 5k once the lien holder auctions the car and sues you for the deficit plus, fees, storage, accrued interest, and so forth.

[disneysteve]

Originally Posted by Joe351

I bought a fairly expensive car last year (30k)I recently took a large pay cut,almost 50% and can't begin to pay for this car,unfortunately I would lose about 5,000 if I sold it according to the kbb.

You'll lose more than 5K if you don't sell it. Clean it up and get a For Sale sign in the window, get it listed on craigslist and in your local paper or any work or neighborhood bulletin boards, post it to your facebook page, any way you can get the word out. If you haven't already, slash your expenses to the bone and start piling up cash to pay off the balance.

[jpg7n16]

Originally Posted by maat55

You will be liable for the remainder of the balance.

Agreed. You didn't borrow a car from the bank, you borrowed $30k.

So like Maat said, if you gave them the car back, they'd likely auction it for whatever they could get and pay that towards the $30k you owe. If they only get $20k at auction, you still owe $10k.

I'd second the opinions above. List the car yourself, where you have some control over the price. And cut the other expenses you already have control over.

[bjl584]

Originally Posted by Joe351

I bought a fairly expensive car last year (30k)I recently took a large pay cut,almost 50% and can't begin to pay for this car,unfortunately I would lose about 5,000 if I sold it according to the kbb.I know it sounds sleazy but what would happen to me if I just let the bank take it?

I agree with what the others have said. At least try to sell it before you end up with a repo on your credit report.

[maat55]

Originally Posted by bjl584

I agree with what the others have said. At least try to sell it before you end up with a repo on your credit report.

Good point. Not keeping up with the payments until you have sold it will make it much harder to borrow the difference as well.

[dczech09]

Sell the car and limit your losses. Let this be a lesson to you, and everyone else: it's stupid to borrow on a car. ESPECIALLY $30,000!!! The only people who should be buying new cars are those who have millions and can afford to waste money for a new car that will drop in value the moment you drive away from the sales lot.

[crazyskunk82]

Sadly, I know from experience that there's no good option for getting rid of a car that you owe more than it is worth. You live and you learn.

I'd second, third, and fourth what everyone else has posted. You'll owe less if you sell it yourself. Maybe there's a way you can make up the difference. Cut some unnecessary expenses for a while. I had to cut cable and a gym membership to pay down debt faster.

[ProjectX]

Sorry to hear that. 50% is a lot to deal with.

The most important thing you have to remember is your credit. If you lose credit then you will have a harder time making large purchases, like a house or getting a loan, credit cards and so on. With bad credit, some places still qualify you, but with a ridiculous interest rate.

Try to make your payments and not miss one, and in the mean time, take the car to CarMax and see what they would give you for the car (its free), then clean up the car and list it on Craigslist, Autotrader, and Cars.com for $2000 above CarMax's price. Should sell fast and save your credit.

While your credit is still good, try to take out a personal loan to pay of the lien on the car and then set up a budget and plan on how you will pay off the personal loan in a short and effective time frame. Good Luck.

[Shewillbemine]

If you're able to, seek out your credit cards for possible 0% cash advances or balance transfers so you can pay off the $5,000 upside down difference.

Then, get your life and career back together and take care not to buy expensive cars through loans again. Good luck!

[thefrugallery]

If you can get the rest of your expenses under control and keep making the monthly payment, you can hold onto the car until you could get more for it. Go bare bones, get a basic cell phone plan, get rid of cable/internet, stop eating out, get a roommate, etc. You should be able to save up the $5k, or keep living like that until you are not upside down on the loan.

The Frugallery

[Stuard]

If you have a business then you should take car on loan and debt,installment basis and if you are a employee then you must go not on this way because for business man,it is better that he should use the money in business and should dive the installment or debt on the earning money over that principal amount.

[BMEPhDinCO]

Post your budget and we can help you cut - but I agree with the above, sell it for as much as you can, and then take out another loan for the rest. You do NOT want the bank to have to take it back, that will haunt you for a lot longer than a loan.