Upside down car options ?

[WilliamWallace]

Hi all,
First time posting here.
So currently we are upside down on a 2008 Subaru Tribeca. Owe about 19500, KBB private sale comes back about 16000. $3500 under.
So all the usual options are on the table, stick it out at $374 a month, trade it in to dealer for cheaper car (with much better gas mileage), roll $3500 in.
What I'm trying to work on though is this. My mother has a 2001 Jeep Cherokee she'd like to give to us. So there is a vehicle, in very good shape by the way, paid off.
Do I sell the Tribeca, take the approx $3500 and get a loan for it, probably ending up with something like a $105 monthly payment over 3 years ??
Looking for some ideas...
Oh, reason for trying to get out of Subaru Tribeca loan, trying to pay down credit card debt, the extra $270 or so a month would go towards paying that down. Also had our first child recently and there are those additional expenses...

[bjl584]

What's the Jeep worth? Could you sell it outright, then tke the proceeds and put it toward the Subaru and then refinance the loan? That is one possible way to keep the new car and lower the payment.

Or you could try to sell both outright and get into something cheaper. Subaru plus Jeep being sold should be more than enough to get you out from being upside down.

[Petunia 100]

How is your credit rating, William Wallace? If it is good, you should have no trouble getting an unsecured loan at a reasonable interest rate. Places to check include your bank or credit union, peer-to-peer lending, and even a 0% balance transfer offer from credit card lenders.

I think it makes a great deal of sense to drive the paid for gifted Jeep (thanks mom and dad!) and get out from under the financed Subaru.

You could also consider a title loan on the Jeep. However, these are often outrageously expensive. You will likely do better with an unsecured personal loan.

[maat55]

I would sell and finance the difference.

[Wino]

Take the Subaru to Carmax and get your good-for-one-week offer. I don't care what KBB says, because if you're selling it, it is worth what someone will pay for it, and not a penny more. Getting an offer gives you a better idea of your actual situation.

I just gifted a 1998 Jeep Cherokee to my brother-in-law and it was in phenomenally good shape. Even with over 200K on it, it's still good for another 100K plus. So, I'd say keep the Jeep because it is a low-maintenance vehicle and do whatever it takes for you to get rid of the Subaru.

By your numbers, it should take you no more than 10 months to pay off the $3500 loan at $375 per month - the missing car payment. After you retire the snorkel loan (I hereby copyright "snorkel loan" to describe a loan taken out to get rid of something that's underwater. ), use that money toward other bills until you have enough to put $15K or so in the bank for emergencies and unforeseen expenses.

JMO,
Wino

[SeanH]

If you aren't keeping the Jeep I would suggest making it very clear to your mother what you intend to do with it on the off chance there could be hurt feelings or a misunderstanding.