Car Payment Is Upside Down - What Can I do?

[questions]

I am concerned if I am stuck or not. I am 68, look and act 50 (most of the time); traded in my 2002 Sentra in 2005 because lease was up. I thought I had a job and the dealer talked me into buying since I could not get a bank loan on my credit. I find the dealer put charges on top of the new loan so now I have a bill where the car is worth way more than what the balance is.

I make $1000 a month in retirement funds. My car payment is $290. I am constantly being overdrawn. The worry put me into a heart attack that cost more medical bills. I bank with Wells Fargo, they want to give me a credit card with a high interest to help me get my credit back. I have been paying regularly on my car payment. I no longer have a credit card.

What alternatives can you suggest for me. There is no savings built up either as all spent on medical in 2002.

[luvnspnful]

sorry to hear about your health problems. I can only imagine the impact the stress is having. the only recourse I can think of for you is to sell your car privately and buy a cheaper car- even a beater. that $290 is 29% of your living allowance- thats the most you should be paying for housing....never mind a vehicle with insurance, gas and maintenance.

you could try taking the credit card offered, but any charges you make to it are most likely going to end up as debt, as your disposable income doesnt seem to allow more bill payments. If u take the card, ask for a very low limit- like $500. At least that way, total owed can be payed off in a short period of time.

good luck, and take care of yourself.

[greedy4chips]

I agree that selling the car even at a loss is your best option. Talk to your bank about getting an unsecured loan for the outstanding amount.

In 2000 I bought a car from a traveling salesman who put 81,000 miles on his car in 1 year. I paid $6000 which was 1200 below blue book. Since I drove less than 5 miles to work I figured it would last me many years despite the high mileage.

My point is 7 years later the car is still running great and would drop your monthly payment more than half and you would never be upside down on it.

There are some pretty decent cars for $3000 that would be dependable.

On a $1000/month income I wouldn't put more than $100/month towards a vehicle.

Good luck!

[simpleyme]

can you get a job and up your income?

[corns]

Sell the car, get a cheaper car. And this time be sure of all the hidden charges before you sign up for the car.

[b4freedom]

Go get a junker car for $500 to $1000. Contact a charity that collects them for fundraisers, they might help you get a good one.

Take the car to your dealer and tell them that your defaulting on your agreement and that they can have the car back, if you have a loan with a bank/broker, call and tell them where the car is and what you are doing. Ignore their objections. Your credit is already bad, this won't help it, but it's already bad, so who cares. Take the plates off of the vehicle and return them to the DMV.

The worst case scenerio: your credit is so bad that you can't get a loan. You're already in the worst case scenerio.

It will take you upwards of 7 years to get good credit again. And frankly, your income is too low to help you do what you need to do to get it up.

Your bank wants to give you a high interest card with annual fees so that they can suck more money out of you. It's a trap that they catch lots of people in. They are helping themselves, not you.

Unfortunetly credit is designed to help rich people, not poor people. And $12k a year makes you a poor person. The system is working against poor people. Your best just living off of cash until you have enough money saved up to pull yourself up into the next class. I would suggest saving as much as you can and getting as much of an education about money as you can. Libraries are free, use them. Read as many financial books as you can.