Underwater on car loan and buying new car. (credit, versus, truck)

[Mr78609]

Originally Posted by CarnivalGal

Drive the Corolla into the ground. You are not getting rid of the debt on it, you are just rolling that debt into the new car. So instead of being upside down on one car, you'll be even more upside down on another. It would be a really stupid move.

In regards to the hit and run, seeing as were still making payments on it, you should have had full coverage insurance. Why didn't you make repairs under your uninsured motorist coverage? Why is it still dented?

Yes the story doesn't add up

[eaton53]

Originally Posted by vision33r

I bought used cars for $2500 that look great and drove great for many years the only problem was the high mileage.

When you don't have funds, the best used car is the one you already own.
Fix the car and carry on.

[Bamaman1]

I worked in the automobile industry for 24 years, and I consider myself a "car guy."

When someone has a job that puts mega miles on a vehicle, they should be receiving a mileage stipend to pay for the vehicle, gas and upkeep. That money needs to go in a separate account for the purpose it was received for, and not be put in your pocket to spend elsewhere.

Right now, you're in a heap of trouble if your car breaks. It's time to save up enough money up the money in case major repairs are needed. You will find all parts to fix your car at Car-Parts.com--an internet website where all the great auto salvage yards list their inventories. You can save big $ there.

You're really not anything out of the norm. Car dealerships see people in your shoes all the time. At least you're driving one of those cars that has a long lifespan, even if it's not the best vehicle for your use.

I'm driving a 2018 Camry Hybrid getting 49 mpg. Although it has a 100,000 mile warranty on the drivetrain and battery, I also have a lifetime warranty on the whole driveline as long as I own it. In 30 months and 58K miles, it's never seen the shop. I try to purchase cars that are more durable than most other cars, and they also happen to have the highest resale.

Good luck to you and your career. I was also a Road Ranger for many years, but since I worked for an auto company I got new cars very often--to the tune of over 100 new cars.

[Tallysmom]

Originally Posted by jerseygal4u

here is the story.

I got a car loan of $26000 with no interest in 2017. I was only able to make the monthly payment of $393. It was on a small,brand new off the lot car from Toyota. But,someone did a hit and run in Nyc and my car has dents. I also ran up a lot of miles driving all over NJ due to my career. I am at 120,000 miles in under two years and nine months. i still owe $15700 on it.

The issue.Both cars are from the same dealership btw. Apparently the dealership is running a special. No money down on a new car. My loan is directly from Toyota.Both loans would be.

While getting my car serviced,someone from sales came over and asked if i wanted to trade it in. Due to the condition of the corolla,he said he could only offer $3500. I told him i am not buying if they do not give me at least $6000 for it.(it isnt like they do not have service records on it, I ONLY used them the whole time)
So he said he would shave off $4000 of the price of a Rav-4 to make up for the loss on the 2017 corolla.That is $20000

Here is where it gets fuzzy. I had $8600 i was going to use to pay on the corolla,which would have brought me down to $7100 owed on the corolla. The salesman said it would be better to put the money down on the new car and roll over the $15,700 into the new loan. I asked him what was the difference and he would not say directly. Because i would have rather given the money to the bank,and still walked out with the new car with no money down. My new payment would have been $659/mo for 6 years at 1.9% interest.

Any advice?

Keep the Corolla. You have a no interest loan. That car can go over 250k miles, so another three years. Start saving money for the next car.

Who cares if the car has dents. It’s just dents. Dents don’t leave you stranded.

If you do this your payment will be one and half times as much with interest. It doesn’t make sense.

[jerseygal4u]

I never said I could not make the payments on the corolla. It’s just that i never put extra toward the monthly bill. I would have put the extra(8600) but the virus came and I was worried about potentially getting sick. I am directly exposed to the virus in my line of work.

I never heard of the mileage tax credit. Nice to know though. My tax preparer said I can’t claim the standard deduction and itemize.

I could change jobs( I am in the process). Job is 20 minutes away. I am worried about losing my health benefits, esp during this time.

[UrbanAdventurer]

Originally Posted by jerseygal4u

here is the story.

I got a car loan of $26000 with no interest in 2017. I was only able to make the monthly payment of $393. It was on a small,brand new off the lot car from Toyota. But,someone did a hit and run in Nyc and my car has dents. I also ran up a lot of miles driving all over NJ due to my career. I am at 120,000 miles in under two years and nine months. i still owe $15700 on it.

The issue.Both cars are from the same dealership btw. Apparently the dealership is running a special. No money down on a new car. My loan is directly from Toyota.Both loans would be.

While getting my car serviced,someone from sales came over and asked if i wanted to trade it in. Due to the condition of the corolla,he said he could only offer $3500. I told him i am not buying if they do not give me at least $6000 for it.(it isnt like they do not have service records on it, I ONLY used them the whole time)
So he said he would shave off $4000 of the price of a Rav-4 to make up for the loss on the 2017 corolla.That is $20000

Here is where it gets fuzzy. I had $8600 i was going to use to pay on the corolla,which would have brought me down to $7100 owed on the corolla. The salesman said it would be better to put the money down on the new car and roll over the $15,700 into the new loan. I asked him what was the difference and he would not say directly. Because i would have rather given the money to the bank,and still walked out with the new car with no money down. My new payment would have been $659/mo for 6 years at 1.9% interest.

Any advice?

Just keep the Corolla. Rav 4 will get lousier MPG anyway and for someone that buys as much gas as you do that will just make it worse. That car is only 2 or 3 years old and 120k is nothing on a modern vehicle if you change the oil and go easy on it. Hang onto the money esp right now.

[jerseygal4u]

Hypothetically, let’s say I did buy the car.

Would would have been the difference between putting $8600 toward the Rav 4 and paying the $8600 to the corolla loan, then getting the rav 4 with no money down? My credit score was 750, this I didn’t have to put money down, according to the sale manager.

[charlygal]

Originally Posted by vision33r

Folks, this is the kinda of pradatory lending tactics the car dealerships used to get people into negative equity on a car.

I own 5 used cars that all cost a total less than the price of the OP's new car. No bills to pay.

What tactic? The OP is clear about all the numbers. The only thing questionable is about not putting down the $8600 as down payment. Anyone versed in how interest and principal works would know that it's best to have the biggest down payment possible when paying interest.

Oh...and before anyone chimes in about not making a down payment and investing the money...do we think that's on the OP's radar?

[DaneThornberg]

Originally Posted by jerseygal4u

I never said I could not make the payments on the corolla. It’s just that i never put extra toward the monthly bill. I would have put the extra(8600) but the virus came and I was worried about potentially getting sick. I am directly exposed to the virus in my line of work.

I never heard of the mileage tax credit. Nice to know though. My tax preparer said I can’t claim the standard deduction and itemize.

I could change jobs( I am in the process). Job is 20 minutes away. I am worried about losing my health benefits, esp during this time.

I agree that you should hang onto the cash as a 'just in case' situation comes up. Listen to Dave Ramsey in his financial freedom radio show. He promotes paying cash for your car. Toyotas last forever and have a great resale value. I'm not a fan of car dealerships who coerce people into folding the balance into a new car. Trust me, the Rav-4 is not worth the terms you listed. Good luck to you!

[Peester]

If you have any money left over when this Is done, I have a deal for you. Trust me.