Selling a car thats not paid off?

[harobmx87]

Originally Posted by ebdiam

Carmax does pay out well from my experience. Would they buy a car from you even if you do not have the title?

they bought a car from me that was a lease with about a year and a half left. still had to pay them 3k to take it

[dtexan]

you can cancel the warranty and the remainder will be given back to the leign holder to go towards the balance owed. Take it up to carmax and get a quote from them they can buy it from you and take care of the title stuff

[CaucasianAsian]

Originally Posted by lovecheese

betcha I'm more upside down :P

go gap insurance!

the gap insurance isnt that bad. for me i think it was another what.. 499?

[Brandon Park]

Originally Posted by D-REW

thanks for the replies.

on my car im paying 479/month for 60 months with a 0.9% interest rate. the reason why its so expensive is because of lojack and that stupid ass extended warranty.

Yea i hear ya i am around that much because i rolled over a previous trade-in loan (i know dumb me) but thats the reason why haha. On a serious note i called my bank NFCU Navy Federal CU to find out if i could use my GAP coverage for trading-in my vehicle (thats what the MSN article mentioned) well the bank only said it can be used for if vehicle is totaled out. I guess i need somebody to steal it, but really i like my FBP especially now wit my Fujita SRI its sweet

[lowerlevel]

go to carmax, get below what u paid for it and cut them a check for the difference. or sell is private party and pay the bank the difference..

either way you going to loose a lot of money..

[janaka]

process
1)call finance company and find out what you owe, to the penny. Call this $Z
2)find a buyer for your car at $Y
3)Take amount owed ($Z) subtract amount buyer gives you ($Y) = $X.
4)Go to your bank, get a draft for $X
5)Go to finance company with check from buyer ($Y) plus your Draft ($X).
6)Give car and title to new owner.
7) Go home and cry for getting reamed in the ass on trying to sell a new car shortly after buying it.

So unless you have a few grand to throw at the car becuase you are upside down (owe more than its worth), keep the car.

[investingdad]

Originally Posted by janaka

process


So unless you have a few grand to throw at the car becuase you are upside down (owe more than its worth), keep the car.

This isn't neccessarily the best decision for the OP. He needs to weigh his potential loss of selling upside down versus his ultimate savings by getting into a far less expensive car.

It's a matter of being out a few grand all at once right now, or 20 grand over the lifetime of the loan.

[janaka]

Originally Posted by investingdad

This isn't neccessarily the best decision for the OP. He needs to weigh his potential loss of selling upside down versus his ultimate savings by getting into a far less expensive car.

It's a matter of being out a few grand all at once right now, or 20 grand over the lifetime of the loan.

Pure speculation on my part. I could be WAY off....


From my view the financial situation at home is such that he most likely doesn't have a ton of extra cash laying around to pay off the $4-7k that he will owe upfront. Then he still need to go out and buy another car, either cash or start another loan. I doubt again he will have the cash upfront to buy out right a 'reasonable' DD car. This leads to going to a dealer to trade in the car which will get him the least amount for his current car versus selling private. So he takes a hit on the car and just rolls the negative equity into the new used car that he buys. Used car rates aren't great here (have no idea for where he is) so he will be paying a higher rate on the used car on top of rolling in the money lost on the trade.
For every $1000 of purchase price is usually about $20/mnth of payment (rough numbers from when i sold cars last). So lets say he's $6k upside down, that means he's paying $120/mnth on top of whatever he pays for a used car. Lets say he buys a $10,000 car which for most people is pretty reasonable, that $200/mnth +120 from the last car = $320/mnth.

In the end he's saving $150/mnth give or take. But you then have to take into consideration that an older car will need more maintenence than his new one which will offset some of the savings.

So is it worth it? Thats his decision in the end.

This is one reason why dealing in cars sucks so much because you never win with cars. Its always downhill (unless its a classic that is).

My best friend bought a 2004 Pilot last October. Paid $29k for it. Threw $5k down on it made his $550 payment for a year then sold it for $23k and had to pay out $3-4k to the dealer because he was upside down. That means it cost him $5,000 deposit + 12x $550 payments + $3-4,000 buyout to own the car for ONE YEAR!!! Thats over $15000!!! Retarded. Then he bought a 2000 Odessey for $3000 cash. Now he's saying "wow its so easy to save money without that payment now..." but he doesn't realize he's got to save for like a year of no payments to get back his deposit, then another 6months to get back what he paid out at the end of the load.... He doesn't get it, he's owned more cars in the last 4 yrs than I can count and LOST on every single one of them. Its insane how much gets thrown away.

[octoberfestfan2008]

Originally Posted by investingdad

The first thing you need to do is not take advice from people on internet forums who may not have done it before. It's a good way to get yourself in a potential legal or financial mess.

Liz on MSN Money offers some good advice on how to deal with this at a high level:

How to sell a car you don't own - MSN Money

Read the whole article, Page 2 has specifics on the procedure if you decide to go forward on the sell. You'll need to have some bridge financing set up unless your lien holder happens to have a local branch you can do the transaction at. In other words, you need to make some calls and do some due dilligence BEFORE you start listing your car for sale.

Bottom line, you're going to get burned on this. Based on what you said your car payment is for, I'm 100% certain you're going to be upside down, which if you don't know by now means you'll owe more than you can sell for. Also, the chances are good that you'll incur additional cost because you won't have the title (see the article I linked to above).

Unfortunately, parents don't realize they often do more harm than good by helping their kids with something they should let the kids undertake on their own. The silver lining is that you're learning from your mistakes early. A lot of adults got themselves into very similar messes over the last few years on home mortgages because they chose to follow home lenders as if they were the Pied Piper and ignore finanical reality, which is why the whole country is in the mess we're in right now. Too much debt, too much borrowing, too little forward thinking.

Good luck. And carry this lesson with you.

This is by far the most intelligent comment ever made on 8th generation. Granted, I have only been here since mid November yet I totally agree with his statement above.
To the Original Poster. You need to find out how much your car is worth. A better place to appraise your car on the internet is New Cars, Used Cars, Car Reviews and Pricing - Edmunds.com where they tell you the exact value of your vehicle by condition, mileage and condition. Seems like at $479/mo, you are paying a 5 year / 60 months payment. I don't know if your parents really negociated the vehicle for you or you did not have any credit when you purchased the Si (I would hope it is a Civic Si, any other Civic, even EX-L should not cost you more than 24k in 2007 (08 cars are bought in 07.)
Assuming you put no money down, which in this case I certainly hope! 479*60 months comes out to be $28,740. That is incredibly high on a Civic. I purchased my 2005 Acura TL with Navigation; fully loaded for $32,500 out the door in 2004. Granted, inflation should not have cased the vehicle to be that high today. Now, if you have bought the car in 2008, after a year, 478*12months = $5748. But the entire monthly payment amount never goes directly into principal on the first few years... so I am assuming out of 5748, only 4000 went into the principal, give a take a few hundred.
Now you have 28,740 - 4000, you would still owe $24,740 on it. Basically, if you didn't put any money down initially, all this time, you have just been paying interest. The 2008 Civic Si now worth about 19,000. So technically, if you sell the car today, it would be at around 19,000. And you would owe about 5700 or so.
You always lose money when you get rid of your car, whether it is trade in or private sales. Now, I have not read the entire thread, so I don't know if you specify how much you owed, this is just my speculation.

I recently purchased a 2009 Civic Si Sedan, because of the bad economy, I was able to get the Si Sedan with Navigation and had them threw in additional stuff for $22,500 out the door with tax. I hope you can solve your problem soon.
Good luck!

[Fishstix]

Let it accidently burst into a fireball and fall off a cliff...

[octoberfestfan2008]

Originally Posted by janaka

Pure speculation on my part. I could be WAY off....


From my view the financial situation at home is such that he most likely doesn't have a ton of extra cash laying around to pay off the $4-7k that he will owe upfront. Then he still need to go out and buy another car, either cash or start another loan. I doubt again he will have the cash upfront to buy out right a 'reasonable' DD car. This leads to going to a dealer to trade in the car which will get him the least amount for his current car versus selling private. So he takes a hit on the car and just rolls the negative equity into the new used car that he buys. Used car rates aren't great here (have no idea for where he is) so he will be paying a higher rate on the used car on top of rolling in the money lost on the trade.
For every $1000 of purchase price is usually about $20/mnth of payment (rough numbers from when i sold cars last). So lets say he's $6k upside down, that means he's paying $120/mnth on top of whatever he pays for a used car. Lets say he buys a $10,000 car which for most people is pretty reasonable, that $200/mnth +120 from the last car = $320/mnth.

In the end he's saving $150/mnth give or take. But you then have to take into consideration that an older car will need more maintenence than his new one which will offset some of the savings.

So is it worth it? Thats his decision in the end.

This is one reason why dealing in cars sucks so much because you never win with cars. Its always downhill (unless its a classic that is).

My best friend bought a 2004 Pilot last October. Paid $29k for it. Threw $5k down on it made his $550 payment for a year then sold it for $23k and had to pay out $3-4k to the dealer because he was upside down. That means it cost him $5,000 deposit + 12x $550 payments + $3-4,000 buyout to own the car for ONE YEAR!!! Thats over $15000!!! Retarded. Then he bought a 2000 Odessey for $3000 cash. Now he's saying "wow its so easy to save money without that payment now..." but he doesn't realize he's got to save for like a year of no payments to get back his deposit, then another 6months to get back what he paid out at the end of the load.... He doesn't get it, he's owned more cars in the last 4 yrs than I can count and LOST on every single one of them. Its insane how much gets thrown away.

That is absolutely correct sir. This is why people should NEVER buy a car on their first visit. I have witnessed too many times people go into a dealership and walked out a car simply because they were overpowered with math numbers(lowly monthly payment yet 72 months!) and just eat up the buyer's remorse.
A good lesson for those out there who are impatient or isn't good with financial numbers when it comes to buying cars. They need to first find out the INVOICE price of the vehicle, email or call their local dealership for an internet pricing and negociate with them before you head in. Get the best deal and go from there. Test driving a car is one thing, but never sit down and talk with them because often, most people will be talked into getting a car they just felt in love during the test drive.
I learned my lesson back in 1998 when I leased a Honda Accord 4cyl. for $305/mo with no money down. after 36 months, $10,980 to residual (buy out) for that accord was 13,500 plus tax. Now that comes to a total of $24,480. Had I bought the car initially, it would have easily been 17,000 plus tax. Of course I ended up just not buying the car at the end of the lease and bought a used DD before the Acura. One always need to do research before they jump into getting the car.
Car has an amazing depreciation within the first 2 years, so most likely the OP will have to fork out a good 5~6000 in this case. Yet trading that car in for a cheaper vehicle... is it a good idea? To me, no. Yes the $478/mo is extremely high (and I do believe he's doing 5 yr 60 months in this case.) is still a better option than getting a lesser car ( something cheap.) and pay $330 to $350 a month. I would not be surprise if he walked out of there getting $390/month for something way less reliable than the Civic Si.
He really needs a negociator. In this HORRIBLE CAR MARKET, you can definitely get a great deal. I am in NJ, OP, if you ever need help, pm me.
I dinged the Honda dealership when I bought my 09 Si for only $20100 (before tax, title and destination charge) and it came with navigation LOL.

[octoberfestfan2008]

Originally Posted by Fishstix

Let it accidently burst into a fireball and fall off a cliff...

If you do that, you still owe more than the value of the vehicle. You still need to fork out a good 6000 to make up the difference ;-)

[investingdad]

I've spent a lot of time on other forums (including some money forums on MSN) trying to help people understand how NOT to get into these sorts of ridiculous debt situations.

It never fails to knock me over when I see people that are teens and 20s (or any age, really) driving cars that cost anywhere from 50% to 60% of their income. Pure insanity.

My wife and I...well, let's just say our income is good and leave it at that. My daily driver is a Nissan I paid 14K for. The most expensive car I bought was 22K and it gave me the shakes paying that much. So when I see people making less than 20% of what my wife and I bring in but are driving a car that costs twice as much as mine...simply unreal.

Anyway, that's neither here nor there. I hope the OP is able to build of this mistake and keep it in mind for the future. Sounds like he may be making a good start.

[Fishstix]

Originally Posted by investingdad

I've spent a lot of time on other forums (including some money forums on MSN) trying to help people understand how NOT to get into these sorts of ridiculous debt situations.

It never fails to knock me over when I see people that are teens and 20s (or any age, really) driving cars that cost anywhere from 50% to 60% of their income. Pure insanity.

I don't see what's so hard to understand. Anyone living at home doesn't have a mortgage and other costs such as food and utilities are slim to nonexistent. It's pretty easy paying off a car in such a situation. After paying for my car ($440), insurance, phone bill, and credit card charges I still have $2k every month.

[D-REW]

wow, i really appreciate all of the good info. you guys def. helped me with my decision.

i figured im just gonna keep the car for a few more years. i REALLY love this car no doubt, its just that there are far more important things. but, seeing how selling the car at this moment can make us lose a lot more money, i might as well just keep up with the payments. this is pretty much the only thing im paying for, i really have no other bills since im a full time student.

at first i was just going to sell this car or trade it in and get like a $7k honda/toyota. but, after seeing some insight, its not worth it to be upside down and probably oweing $3k - 5k more, and turning that 7k beater into something almost double of that. i would rather pay a little bit more over time, then paying a big chunk, which may put me, or my parents in debt. cuz i know for a fact, we dont have a few Gs to put up front.


so im guessing, just hanging on to this Si for a year or two, then selling it would be a better option??

[D-REW]

ok wait hold up.. after reading the posts again...im thinking twice.

im gonna see what carmax can give me, and see if i can find a good DD for 8k or lower. and go from there.

cuz heres my situation... my Si is immaculate. i take care of this baby, **** looks brand new every day. i know its only a few months old, but my friends always comment saying how it seems like i just bought it yesterday.

ALSO, my dad does own an autobody shop, so maintenance and all that isnt really a problem because my dad and his workers can mostly take care of everything. they fixed transmissions, breaks, engines, from our past cars before.

so after reading some of your guys' posts... if i trade my car in to carmax, they'll just add what i owe from the Si, into the used car i just bought? correct?

so lets say i owe 6k on the my Si. and i trade it in for a car that costs about 8k. thats 14k in total. so i'll be paying about 233/month for 60 months. and what is usually the interest rate on used cars now a days?

and the reason why i dont mind getting an 8k car that has over 100k miles on it, is because i just need something to last me through college at least. thats why im looking at hondas/toyotas/nissans for a DD.

[jammies]

Originally Posted by D-REW

.....so after reading some of your guys' posts... if i trade my car in to carmax, they'll just add what i owe from the Si, into the used car i just bought? correct?

This is correct. Trade Price - Amount you owe + price of daily driver ( beater? ).

Originally Posted by D-REW

.....so lets say i owe 6k on the my Si. and i trade it in for a car that costs about 8k. thats 14k in total. so i'll be paying about 233/month for 60 months. and what is usually the interest rate on used cars now a days?

Ballpark at 14k would be around $280 ( $200/ ten thousand or $20/ thousand -- however you prefer to look at it ).... You WILL lose the rate. I am assuming .9% was a special through Honda. Most used car rates around here are close to 5% with decent credit ( 14k at 5% for 60 month ~ $264 ).

The OTHER problem is MOST lenders WILL NOT finance above 130% of the book value on the car. Meaning, a loan on your 8k car can only be financed out to 10.4k ( 130% of $8,000 = $10,400 ). And it all depends on the BOOK they use to value the car. I have seen more dealerships use Manheim Auto Auction records than the Kelly's books. So, even though they want to sell you the car at 8k, it may only book for 7k.....

But the only way you are going to find out for sure is to take your SI in and put some numbers together... but don't get your hopes up.

My $.02

[ray]

Originally Posted by investingdad

It's a matter of being out a few grand all at once right now, or 20 grand over the lifetime of the loan.

Not quite. If he sells the car and buys something cheaper at the end of the loan period he'll have a used-up beater rather than a still perfectly-good Si that he's owned since new and as such been able to mantain properly. It will still likely be worth a substantial amount, and will incurr no repair costs over that time due to the extended warranty. And he'll have been able to enjoy the style, performance, safety, and reliability of the Si all that time. There's no way to drive for free, and a new honda is about as cost-effective a decision as one can make. If you want the payments to be lower, you just should have saved up a more substantial down payment before pulling the trigger.

I ordered my Si and waited 3 months for it to arrive so I could save for a larger down payment in the meantime. I put 6K down, and my payments are $465/month, except my loan term is 4 years rather than 5 and I only owe $16,800 at this point--6 months after buying it. I'm already to the point that I could sell it if I wanted to, but doing so would be foolish.

[investingdad]

Originally Posted by Fishstix

I don't see what's so hard to understand. Anyone living at home doesn't have a mortgage and other costs such as food and utilities are slim to nonexistent. It's pretty easy paying off a car in such a situation. After paying for my car ($440), insurance, phone bill, and credit card charges I still have $2k every month.

Ok, let me see if I understand this.

You're saying your cash flow is something like this:
440 - car
100 - insurance (a guess on my part)
50 - phone (also a guess)
100 - credit card (a guess)
2000 - left over cash each month

That means you have a net inflow of 32.3K a year AFTER tax. Based on 2008 tax schedules you're making about 38.5K gross. Which begs the following question:

If you're making this much money at age 19, why are you still living at home off your parents?

But let's put that aside for a moment. Your argument is a common one. But what happens when you're 19 and on a 5 year loan paying this much money and you decide at age 21 you no longer want to live at home? You may not have a mortgage when you move out, but rent and utilities in NJ for even a craphole apartment are easily going to set you back 1K to 1.5K a month. Plus, you now have to buy food. And you still have 3 years left on a car loan that looked great when you were at home but not so great when you decide living at home wasn't as great as it used to be.

Suddenly your extra 2K a month is gone.

And now we have a problem. Why you ask? Because you've grown used to driving a fairly nice car. Why is that a problem? Becuase the prospect of stepping down on a replacement car never appeals to people. So you don't. And then we fast forward just a few more years and you're posting on a forum about how you're 25 and in debt and etc, etc...

Oh well. I'm sure I don't know what I'm talking about and haven't come across this more times than I can count.

Good luck.

[investingdad]

Originally Posted by ray

Not quite. If he sells the car and buys something cheaper at the end of the loan period he'll have a used-up beater rather than a still perfectly-good Si that he's owned since new and as such been able to mantain properly. It will still likely be worth a substantial amount, and will incurr no repair costs over that time due to the extended warranty. And he'll have been able to enjoy the style, performance, safety, and reliability of the Si all that time. There's no way to drive for free, and a new honda is about as cost-effective a decision as one can make.

You're overlooking what the OP has said. He is getting hurt financially right now. He can't afford to continue to make the payments. The issue is apparently one of monthly cash flow. It's not about what he wants to enjoy, it's about what he can afford.

He's already beyond the point where he's going to lose money. Now the question is how much is he going to lose. Is he going to die a death of a thousand cuts (payments he can't afford over 5 years) or take his lumps now and be done with it?

No, you can't drive for free. But you can reduce what you pay for a car. A used Honda would have been a good choice and would have allowed him to get a late model Civic for under 10K. As you said, dead reliable so this would have been a good choice.