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Posted in Auto Loans
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Question By
Yeah4it

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12 People Helped
I am WAY under water on a used car loan... help!
I bought a 2001 ford f 150 a few years ago from a dealer when my Tacoma started to fall apart. I know I made a mistake and I know I was bullied into buying this **** thing, but now it's not worth anything but I owe 11,000.00 ! It runs ok and looks good, but I'm just so frustrated with the situation and terrified it's going to fall apart before I pay it off... What are my options? I can't afford to pay to much more than the minimums.

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Do what ever it takes to Pay it off as SOON AS YOU CAN!,   Sell something,   Get a 2nd or 3rd Job and put that money toward paying it off. 

There are no other Options. 

Reply by
Yeah4it

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12 People Helped

You are correct. No other way. Hard learned lessons stick with us forever! 

Top Contributor
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Most Helpful Response

Thats what you agree to,

Helpful to 1 out of 1 people

EVERY vehicle is upside down on its loan the moment it is driven off the lot. New cars as well as used.  If you buy a used car at retail from a dealer, You will lose at least 25% of value of the loan as soon as you drive off.  Thats the nature oof auto finance.  

In January I bought a 2016 that had been a dealer loaner with a $34K sticker price for $23k, With all the taxes, reg, etc. etc. and paying nearly $4K down payment, it  will cost me just over $25K to pay off. If I were to sell this car today, Its worth about $26K on kbb .com,  Give it a year and that will drop to about $19K. 

It's just the nature of the beast, my friend. With prices so high that they have to finance 6 or 7 years just to make payments affordable. Dealer Financers love it because they get to charge you interest that much longer.  

I took an Auto loan through my credit union. Because I have retirement savings with them, I was able to just call and ask for a loan. It was easy, I told them what I wanted to pay for the car and how long and they emailed all the paperwork.  I got a great rate at 2% for 48 months, I can pay anything extra I want toward principal and pay off early with no fees and save on interest. Having that pre-qualified loan I was able to negotiate a great deal that I paln to pay off in 36 months while the car still has value. 

Also, Always take the GAP insurance on your auto loan. Its extra insurance that will pay off the difference from what you owe and the value of the car if its totaled in an accident.  Being underwater on an auto loan is so common that they sell insurance for it.  

Good luck

Reply by
Yeah4it

3 Contributions
12 People Helped

Thanks for the reply. I have completely restructured my budget and have found a way to pay off both of our vehicles in 2 years. It means I have to put off buying a home, but after everything is all paid off, I'll be in better shape financially anyway and should have no problem getting the best rates. 

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