Upside Down Car Loans – A Growing Issue
So here we go again with more news on upside down car loans or high payment high balance car loans. This article came out just about a month ago, at the end of January, and it says people owe more than ever on upside down car loans. This is from USA Today, a great article, and we’ll talk about how to get out of these car loans here at the end of the call. So if you’re in a position where you have a high car loan or are upside down, wait till the end to take a look at options for extracting yourself from that loan.
The Rise of Negative Equity in Car Loans
Without having to do a repossession, the article goes on to say a number of consumers are trading in cars that are worth less than they owe, sometimes $7,000 negative equity. Now, negative equity used to be high if it was three or $4,000. Now, $7,000 is a big deal, and if you’re upside down in a car loan, it means you have to take on more debt on the new car because you have to roll that over to the next car. Big, big, big piece of news—you’re not alone if your car is underwater. One out of four trade-ins are underwater or upside down.
Impact on Car Buyers and Trade-Ins
That’s a big deal. One of every four people that have a vehicle they’re looking to trade in is out of equity, and this hurts when you’re trying to get into a different vehicle that may be more appropriate for your daily use. In the meantime, remember you have access to live one-on-one consultation and the undivided attention of a licensed certified expert in this subject and many others. We want to listen to your story, we want to hear your questions, and give you expert advisement of your options. We want to tell you what we know about your situation and what options you have.
Considering a Car Short Sale
Maybe you have a better budget. Maybe you have a car loan that’s $700, $800, or $900, and you need to get it down to $500. You can’t do it if you’re upside down if you just flat traded it in. But what you can do is a car short sale. A car short sale is when you file a package of documents with your lien holder, and our website will give you instructions on how to do that to have them accept a lower trade-in value or lower sale value and clear out the loan balance so your title’s clear, so you can trade it in and get out from underneath that car. It’s a very positive way to extricate yourself from that payment.
How Car Short Sales Work
Every lender has different rules on how they do it. It’s different than doing a voluntary repossession, which is very detrimental because then they can sell it for even less and stick you with the difference. With a car short sale, whatever happens to that difference in value is negotiated. Maybe they waive it, maybe they just make you pay a little bit, maybe they make you pay some small payments. But either way, it’s different than just getting a lump sum on your credit report that shows that you owe this much money and they take it out of your paycheck. So take a look at a car short sale if you need to get out from underneath a car that you can’t afford.
