Car loan question
Hypothetically, if a person was wanting to sell a vehicle that blue booked for $3,000 less than the amount owed on the car, how would that person go about getting the title released to the new owner and pay off the remainder of of what was owed on the car? Assume that the seller of the car doesn't have the cash to pay the difference.
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The bluebook value doesn't have anything to do with the transaction.
What the buyer is going to pay for the vehicle does. If he is not willing to pay what you owe on the car, you will have to pay the leinholder the difference to sell the car. Perhaps, if the lienholder will issue you an unsecured loan, you can sell the car for less than you owe and make payments on the loan you take out to cover the difference. If the lienholder will not issue to you an unsecurerd loan, you will need to come up with some other collateral of enough value to secure a loan to pay off the difference in what you owe on the car and what you get paid from the buyer. Or, God forbid, you could sell some guns to pay off the difference![:0][:D][:D]0 -
You know it's bad when the car depreciates faster than you can pay it off.
Unless you paid too much for it in the first place.[:(]0 -
Negative equity or being "upside down" is typical when people buy cars with no down payment. They finance the retail value but the resale value is somewhere closer to wholesale. Generally, on a 60 month contract, the loan needs to paid down by about 60% over the term of the loan to reach a "break even" point. Sooner for shorter contracts, later for longer ones.
There's a difference between a "Lender" like banks and credit unions and a "Finance Company" like Ford Credit, GMAC and Chrysler Financial. Those "captive finance companies" are not licensed to make unsecured personal loans. They can only finance retail contracts assigned to them by an authorized dealer on a collaterized vehicle. Once the vehicle is sold, it must be paid off in full or they can't release the title unless you trade it on on another vehicle from one of their dealers. If they released the title and carried the remaining unsecured balance on the books, it would amount to a "personal loan" and be in violation of their finance company license. Banks and credit unions, on the other hand, are "lenders" with more flexibility and can extend personal loans at their discretion depending on their policies and your credit rating. Talk to your financial institution as they want to retain you as a customer and will be happy to answer your questions.0 -
quote:Originally posted by Spider7115
Negative equity or being "upside down" is typical when people buy cars with no down payment. They finance the retail value but the resale value is somewhere closer to wholesale. Generally, on a 60 month contract, the loan needs to paid down by about 60% over the term of the loan to reach a "break even" point. Sooner for shorter contracts, later for longer ones.
There's a difference between a "Lender" like banks and credit unions and a "Finance Company" like Ford Credit, GMAC and Chrysler Financial. Those "captive finance companies" are not licensed to make unsecured personal loans. They can only finance retail contracts assigned to them by an authorized dealer on a collaterized vehicle. Once the vehicle is sold, it must be paid off in full or they can't release the title unless you trade it on on another vehicle from one of their dealers. If they released the title and carried the remaining unsecured balance on the books, it would amount to a "personal loan" and be in violation of their finance company license. Banks and credit unions, on the other hand, are "lenders" with more flexibility and can extend personal loans at their discretion depending on their policies and your credit rating. Talk to your financial institution as they want to retain you as a customer and will be happy to answer your questions.
+1 There is no way they are going to release the lien unless they are paid in full. They will not convert it to a personal loan. Crack a credit card to pay the remaining $3000.0 -
or you can just surender the car to the co. that finaced it. probably the cheapest way to go. 0 -
If you owed say $9,000 on a car why would you want to sell it for $6,000 and eat $3,000 of debt?
I fail to see the reasoning for the sale in the first place.0 -
Surrendering the car is a bad idea. That is a repossession, any way you cut it. The lender will sell the car at auction, and probably get LESS for it tha you would if you had sold the car on your own. The sale amount will not satisfy the loan, and will be further from it than if you sold the car. You will still owe the difference. Pay it or be sued and have a judgememt entered against you.
If you are in this situation, it is a bad thing. Best you can do, is sell the car for the most money possible, and pay the difference. You can get the difference in a personal loan from a credit union or bank, your savings, or as a last resort, a credit card.
To answer your hypothetical question, the lender is going to get their money or a judgement for the money.0 -
I can tell you how the people on Guam pay their cars off early or make drug money. They drive down the road and search for the perfect kid to hit...they will maneuvar their car so that they can get their rear end ....barely in front of you before you hit them...or they will wait until the roads are wet and just stomp on the brakes (for no reason).
Police show up, they were clearly rear ended...they make claim for damage to your insurance. They get local bodyshop to cash check and give them a cut. Then they have some Phillipino bondo it up and repeat the process.
I'm serious.
Some GI in a new Jeep couldn't stop because of the wet road and ran over a car trying to do this, killed the old man. They put him in jail. He ruined the scam. I hope he goes postal and starts killing people on Guam when he gets out of jail. Alot deserve it here.0 -
If you were to have an accident and the car were totalled, and you have the right insurance, they would pay off the car.
Also, if the car were to be stolen.
DO NOT make either of those things happen.
Doug0 -
Doug, unfortunately that is not true. If you owe 10K on a 5K car, all the insurance will pay is 5K. They will NOT pay a rediculous balance. You will be luck if they pay wholesale value. Tom 0 -
tccox - you can insure a car (some anyway...) with a "stated value" policy. My '65 Porsche is on one of these (and I need to up the amount!). Car gets totaled, you are already in a contract for the ins. agency to pay out whatever you insured it too... 0 -
My vehicles (and horse trailer) are all insured that way.
Doug0 -
quote:Originally posted by MIKE WISKEY
or you can just surender the car to the co. that finaced it. probably the cheapest way to go.
BAD ADVICE-DO NOT DO THIS
If you give up the car the finance company will sell it and you WILL owe the balance if it sells for less than what you owe.
A friend of mine let a pickup go back. The dealer had an auction and the high bid was a few hundred dollars. Someone got a cheap truck and my friend still had to pay thousands of dollars in payments for a truck he did not own any more.0
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