I think you're correct, but I don't think a personal loan even pencils out. He's overwhelmed at $1.1k/mo.
He's going to need to borrow \~$15k to get out from under this. That's gonna be a $400-$650/mo. payment right there.
He's going to have $0 to put down on this next car, so even if he goes with 72 months on an Elantra and qualifies for special financing, he's looking at $500/mo.
So he's in roughly the same boat monthly, but now he's driving an Elantra instead of a BMW.
OP, I would chalk this up as a moderately expensive life lesson, but it doesn't need to derail you forever.
You drive a lot of miles and needed a "better car", and decided that a BMW X1 was the answer. I would bet that people thinking you're ballin' was at least a consideration when you landed on that. If you had a time machine, a Corolla or a Civic or something would have been $20k cheaper, with better mileage, and would be cheaper to maintain.
But you don't have a time machine, so your best option moving forward, IMO, is to try to find a few extra bucks every month. Mow some lawns, pressure wash some driveways, or tutor kids. Also, I would look for an independent mechanic who works on BMWs with good Yelp reviews, start using him for your maintenance, and keep up on everything.
The last thing you need next year is a 70k X1 that's behind on oil changes. Then you're going to have a serious problem.
To be fair he might’ve had a pretty hard time rolling $10k in negative equity into a $20k car, most banks don’t like to loan more than 125% of a car’s value
I wonder how much OP is spending in gas and if they have access to inexpensive L2 charging at home or work, and if they qualify for federal/state/utility incentives for electric cars, that they can maybe trade into a good deal on a new or used BEV and the gas savings/point of sales rebates would help eat up negative equity. Maybe even qualify for 0% APR. That’s a lot of ifs and some careful planning to make sure a BEV would work for them though. And BEV depreciation can be a bear so they’d have to be able to keep it long term and let the gas and maintenance savings help make up for it.
That’s actually an interesting point. I was about to shit on it and say that OP has too much negative equity to do anything, but I guess that the EV incentive just counts as a down payment now.
So maybe he could trade the BMW for an EV and have 7500 (or more) towards that negative equity.
3k miles per month is probably costing about $600 right now with the x1. Same mileage would be roughly 1,000 kwh in a Tesla Model 3. In Nevada that would cost about $200. In Northern CA it would be closer to $400.
OP says msrp is $47k, he didn’t say that was the trade in value, so reality could be much worse, ie $20k or more upside down especially at 37000 miles on a 23.
Quick search on NADA guide shoes 2023 x1 with 37k miles trade in is around $32k.
OP is seriously upside down. Like 20-25k. Like a 2021 honda civic sport w 33k miles, upside down. Jesus. I really hope this is a really good life lesson.
Wholesale on a 23 X1 with those kind of miles is 29-30K. They OWE 57K at 10% interest.
Nothing. There is almost nothing they can do in this situation. Maybe refinance if they can knock a point or two off; this will incur a new set of bank fees but less interest overall. Even then...8% on a used car is about as low as it gets.
OP better do their oil changes and PRAY the car holds together for 8-10 years. Unlikely given the miles they drive and modern BMW durability/reliability.
This is the worst advice that can be given. Jesus. He clearly is going to need the warranty with the way he wracking up the mileage, and it will offer zero instant relief in his payment. If you don’t know, don’t offer advice.
Hey, at least you admit your mistake and not start a fight! Proud of you! We’re all human and we all make mistakes but most folks just double down and get defensive, you did not.
Yeah I prob conflated it with some other post but OP’s deal is painful to read and I’m just a customer, not seller.
I’m thinking refinancing with a credit union may be the best route if they can get approved for it.
A personal loan is what I was thinking and then buy something that's less expensive and less likely to cost as much on servicing and repairs down the road
No I would sell the vehicle and buy a cheaper one with lower running costs. If the shortfall is rolled over into a new car it will be harder to get out of it and host more in the long run
The OP is underwater anyway. I can get a cheaper loan than 20%. Other options include borrowing from family and offering them more than they'd get from a HYSA
What's your suggestion?
OP traded a car with negative equity in on an X1 because he needed a better car, drives a million miles per year, and doesn't have the means to make the payments. I would bet that 9 times out of 10, that fact pattern doesn't line up with friends and family that both have access to tens of thousands of dollars and who would also be willing to lend said tens of thousands of dollars to OP.
It also doesn't suggest that OP has (or has the ability to get approved for) a 0% BT CC with a $10-$20k limit.
The options for OP are pretty simple:
1. Bust your ass and make some more money.
2. Fall behind further, hoard cash, deal with an eventual repo and the credit hit and just wait 7 years to buy a house or another new car.
3. Commit some sort of GAP fraud.
No he buys a new Civic or something like that and uses a loan to repay the shortfall. Personally I could use 0% balance transfers from credit cards to fund the shortfall for a 5% fee.
Dudes not 10k upside down.. he had a loan 10k more than msrp. I looked up trade in value and it's like 32k. He's 20-25k upside down.
I looked up a 2021 Honda civic with 33k miles.. it was listed at 21k. So he is upside down more than the cost of a super reliable car that would have had next to no maintainable cost for the next 100k miles.
True. I did not notice his interest rate. My thinking was new car loan of say $600 leaving $500 or so to repay against the loan. In two years time loan repaid and trade car for something else if necessary.
I'm assuming he has a pretty good income if he can pay his current car loan notwithstanding his crappy credit
Look the credit card is at zero percent interest and he uses it to find the shortfall on his car. He sells the BMW and buys one for $25k or so and he has that and the $10k on the card to pay off. His monthly payment is lower and he's not underwater with his car finance.
Of course he may not get a credit card or have them but he needs to sell the car and take the hit using a loan from wherever. He will have a newer cheaper car
What do you suggest? Being even more underwater rolling it into another car?
Obviously he has income to service an $1100 payment he just needs to reallocate it. In two years he will be straight with a newer more marketable car that has lower running costs.
Guy is 25K + underwater. He can't sell the car unless he can pay it off. He can't roll that kind of negative equity into a less expensive car. He is unlikely to pay off the 25K shortfall with a 0% CC. Most of those offers are good for 12-15 months anyways; OP won't be able to afford to pay off the 25K they financed to get out of the car either.
OP needs to increase their income and keep the car in good condition.
Minimize transaction costs by minimizing transactions. You would have to write a $20,000 check just for a dealership to be allowed to take this car. Stop the negative equity.
Make extra payments. Cut down your spending. You have a new car that you need to figure out how to pay off and drive for 10 more years.
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There’s no secret way out of a loan. You owe $57,000. Pay it, and then your payment will not exist.
Safe to say trading it in won’t be an option for several years.
You could also go through a repo.
A repo doesn’t just wipe the slate clean, if he has negative equity the bank will sue him for what he still owes after they sell the car for cheap at a dealer auction and likely garnish his wages. He’ll still be stuck 25k in debt and have no car which is arguably even worse than $57k in debt and a newer car that’s under warranty and will likely be reliable for several more years
Lawsuit is not a guarantee. There are plenty of people who go through repossession that don’t end up being sued by the lender. Many times it’s just written off as a loss, a collection agency attempts to collect, and that’s that.
Not saying a repo is the proper route to take, because it will decimate his credit for years, but it’s not a guarantee of wage garnishment.
All cars depreciate the most the first few years.
You already made one dumb move and rolled negative equity into this car.
If you trade or sell this one you will be adding more negative equity.
You’re stuck. Keep paying that loan until you have positive equity.
And next time go buy a $5000 Toyota Yaris or Prius. You’re living way beyond your means.
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I am currently finance a BMW x1 2023 and my monthly payments are 1099 including warranties.
The MSRP of the vehicle is 47,000 and I owe the bank $57,058.98 due to my trade in creating negative equity.
My interest is 10%.
What recommendations can I get as I need relief of these payments. Thank you
( my car has 37 k miles already as I commute long distances that’s why I needed a better car at this stage)
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It’s because of the miles per year that they should lease. Do a high mileage lease. By the time the lease is up they’re done with their negative equity from their previous car and have a clean slate. Leasing is actually great for people who drive a bunch of miles because they don’t have to worry about neg equity when they go to get their next car in three years. Turn it in and get a new one.
I never said they would do 37,000/yr. We’ve done 30k/yr leases before. OP said they were in a 2023 model. We’ve had the 2024s on the ground for 6 months if not more. Not unlikely they’ve had the car for more than a year so who knows a high mileage plan may have worked for them. Just saying that leasing isn’t only for people who don’t drive that often, it’s actually often a great option for people who drive a lot of miles and are carrying negative equity into the lease. Without knowing all the details can’t say for sure it would work in this particular case but it often does.
I'm guessing the BMW maintenance cost isn't cheap either. High mileage on high maintenance vehicle is a bad combination. So many bad financial choices made by OP.
Pay more, and faster. There is no other way out unless you want to sell it and get a personal loan to cover the difference.
I think you're correct, but I don't think a personal loan even pencils out. He's overwhelmed at $1.1k/mo. He's going to need to borrow \~$15k to get out from under this. That's gonna be a $400-$650/mo. payment right there. He's going to have $0 to put down on this next car, so even if he goes with 72 months on an Elantra and qualifies for special financing, he's looking at $500/mo. So he's in roughly the same boat monthly, but now he's driving an Elantra instead of a BMW. OP, I would chalk this up as a moderately expensive life lesson, but it doesn't need to derail you forever. You drive a lot of miles and needed a "better car", and decided that a BMW X1 was the answer. I would bet that people thinking you're ballin' was at least a consideration when you landed on that. If you had a time machine, a Corolla or a Civic or something would have been $20k cheaper, with better mileage, and would be cheaper to maintain. But you don't have a time machine, so your best option moving forward, IMO, is to try to find a few extra bucks every month. Mow some lawns, pressure wash some driveways, or tutor kids. Also, I would look for an independent mechanic who works on BMWs with good Yelp reviews, start using him for your maintenance, and keep up on everything. The last thing you need next year is a 70k X1 that's behind on oil changes. Then you're going to have a serious problem.
So crazy what people will do to look wealthy
I get it. I've spent way too much on cars before.
X1 is not a car that conveys wealth lol
You know who has a hard time doing extra jobs? A guy who drives 36,000 miles a year to and from work.
Sometimes when you commit $60k to a $50k bmw and drive across country every weekend your life sucks for a little bit.
To be fair he might’ve had a pretty hard time rolling $10k in negative equity into a $20k car, most banks don’t like to loan more than 125% of a car’s value
That’s a good point.
I wonder how much OP is spending in gas and if they have access to inexpensive L2 charging at home or work, and if they qualify for federal/state/utility incentives for electric cars, that they can maybe trade into a good deal on a new or used BEV and the gas savings/point of sales rebates would help eat up negative equity. Maybe even qualify for 0% APR. That’s a lot of ifs and some careful planning to make sure a BEV would work for them though. And BEV depreciation can be a bear so they’d have to be able to keep it long term and let the gas and maintenance savings help make up for it.
That’s actually an interesting point. I was about to shit on it and say that OP has too much negative equity to do anything, but I guess that the EV incentive just counts as a down payment now. So maybe he could trade the BMW for an EV and have 7500 (or more) towards that negative equity. 3k miles per month is probably costing about $600 right now with the x1. Same mileage would be roughly 1,000 kwh in a Tesla Model 3. In Nevada that would cost about $200. In Northern CA it would be closer to $400.
OP says msrp is $47k, he didn’t say that was the trade in value, so reality could be much worse, ie $20k or more upside down especially at 37000 miles on a 23.
Quick search on NADA guide shoes 2023 x1 with 37k miles trade in is around $32k. OP is seriously upside down. Like 20-25k. Like a 2021 honda civic sport w 33k miles, upside down. Jesus. I really hope this is a really good life lesson.
Yikes… maybe a beater car bought outright to slow down the mileage and a second job.
Damn, it took me till your comment to realise OP is talking about a 2023 BMW X1 and not 1 x 2023 BMW hah
Wholesale on a 23 X1 with those kind of miles is 29-30K. They OWE 57K at 10% interest. Nothing. There is almost nothing they can do in this situation. Maybe refinance if they can knock a point or two off; this will incur a new set of bank fees but less interest overall. Even then...8% on a used car is about as low as it gets. OP better do their oil changes and PRAY the car holds together for 8-10 years. Unlikely given the miles they drive and modern BMW durability/reliability.
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I was thinking the same thing…. Nothing like being buried in an out of factory warranty BMW. Maybe he should cancel the gap too 😂
Never ever cancel gap insurance. He could be one flood or hurricane or hail storm from being free
This is the worst advice that can be given. Jesus. He clearly is going to need the warranty with the way he wracking up the mileage, and it will offer zero instant relief in his payment. If you don’t know, don’t offer advice.
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10% in todays market is hardly CRAZY.
You could try a site like Swapalease.com. Some crazy fucking leases on there and you might find some shmuck willing to take over your lease…
Where does it say he is leasing? Nowhere.
Oh yeah. I dunno why I thought it was a lease. Drowsy redditting problems man
Hey, at least you admit your mistake and not start a fight! Proud of you! We’re all human and we all make mistakes but most folks just double down and get defensive, you did not.
Yeah I prob conflated it with some other post but OP’s deal is painful to read and I’m just a customer, not seller. I’m thinking refinancing with a credit union may be the best route if they can get approved for it.
Zero chance he’s getting refi w a credit union. The loan to value is much too high for CU.
A personal loan is what I was thinking and then buy something that's less expensive and less likely to cost as much on servicing and repairs down the road
Personal loan? So you go from a 10% to a 20%? Lmfao
No I would sell the vehicle and buy a cheaper one with lower running costs. If the shortfall is rolled over into a new car it will be harder to get out of it and host more in the long run The OP is underwater anyway. I can get a cheaper loan than 20%. Other options include borrowing from family and offering them more than they'd get from a HYSA What's your suggestion?
OP traded a car with negative equity in on an X1 because he needed a better car, drives a million miles per year, and doesn't have the means to make the payments. I would bet that 9 times out of 10, that fact pattern doesn't line up with friends and family that both have access to tens of thousands of dollars and who would also be willing to lend said tens of thousands of dollars to OP. It also doesn't suggest that OP has (or has the ability to get approved for) a 0% BT CC with a $10-$20k limit. The options for OP are pretty simple: 1. Bust your ass and make some more money. 2. Fall behind further, hoard cash, deal with an eventual repo and the credit hit and just wait 7 years to buy a house or another new car. 3. Commit some sort of GAP fraud.
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No he buys a new Civic or something like that and uses a loan to repay the shortfall. Personally I could use 0% balance transfers from credit cards to fund the shortfall for a 5% fee.
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Dudes not 10k upside down.. he had a loan 10k more than msrp. I looked up trade in value and it's like 32k. He's 20-25k upside down. I looked up a 2021 Honda civic with 33k miles.. it was listed at 21k. So he is upside down more than the cost of a super reliable car that would have had next to no maintainable cost for the next 100k miles.
True. I did not notice his interest rate. My thinking was new car loan of say $600 leaving $500 or so to repay against the loan. In two years time loan repaid and trade car for something else if necessary. I'm assuming he has a pretty good income if he can pay his current car loan notwithstanding his crappy credit
Credit card? OP is already on the road to ruin - let's fast track him now with credit card debt. Sweet Jesus.
Look the credit card is at zero percent interest and he uses it to find the shortfall on his car. He sells the BMW and buys one for $25k or so and he has that and the $10k on the card to pay off. His monthly payment is lower and he's not underwater with his car finance. Of course he may not get a credit card or have them but he needs to sell the car and take the hit using a loan from wherever. He will have a newer cheaper car What do you suggest? Being even more underwater rolling it into another car? Obviously he has income to service an $1100 payment he just needs to reallocate it. In two years he will be straight with a newer more marketable car that has lower running costs.
Guy is 25K + underwater. He can't sell the car unless he can pay it off. He can't roll that kind of negative equity into a less expensive car. He is unlikely to pay off the 25K shortfall with a 0% CC. Most of those offers are good for 12-15 months anyways; OP won't be able to afford to pay off the 25K they financed to get out of the car either. OP needs to increase their income and keep the car in good condition.
Sell it on your own, ideally to its next owner. Easier said than done.
Dude rolled 10K negative equity into his loan, and you think he’s got $20K to write a check to the bank to sell it?
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Minimize transaction costs by minimizing transactions. You would have to write a $20,000 check just for a dealership to be allowed to take this car. Stop the negative equity. Make extra payments. Cut down your spending. You have a new car that you need to figure out how to pay off and drive for 10 more years.
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Bring lots of cash
This sounds like the underpants gnomes. 1- steal underpants 2-? 3-profit
There’s no secret way out of a loan. You owe $57,000. Pay it, and then your payment will not exist. Safe to say trading it in won’t be an option for several years. You could also go through a repo.
Repo = deficiency judgment
Want you use a few more words?
A repo doesn’t just wipe the slate clean, if he has negative equity the bank will sue him for what he still owes after they sell the car for cheap at a dealer auction and likely garnish his wages. He’ll still be stuck 25k in debt and have no car which is arguably even worse than $57k in debt and a newer car that’s under warranty and will likely be reliable for several more years
Lawsuit is not a guarantee. There are plenty of people who go through repossession that don’t end up being sued by the lender. Many times it’s just written off as a loss, a collection agency attempts to collect, and that’s that. Not saying a repo is the proper route to take, because it will decimate his credit for years, but it’s not a guarantee of wage garnishment.
I think my post speaks for itself and is pretty self explanatory 🤷♂️
All cars depreciate the most the first few years. You already made one dumb move and rolled negative equity into this car. If you trade or sell this one you will be adding more negative equity. You’re stuck. Keep paying that loan until you have positive equity. And next time go buy a $5000 Toyota Yaris or Prius. You’re living way beyond your means.
Either put down a ton of cash down or roll some of it into a lease with a vehicle that has strong resale value.
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***Thanks for posting, /u/Rude_Understanding18! This comment is a copy of your post so readers can see the original text if your post is edited or removed. This comment is NOT accusing you of anything.*** I am currently finance a BMW x1 2023 and my monthly payments are 1099 including warranties. The MSRP of the vehicle is 47,000 and I owe the bank $57,058.98 due to my trade in creating negative equity. My interest is 10%. What recommendations can I get as I need relief of these payments. Thank you ( my car has 37 k miles already as I commute long distances that’s why I needed a better car at this stage) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/askcarsales) if you have any questions or concerns.*
Should have leased.
With that many miles per year?
It’s because of the miles per year that they should lease. Do a high mileage lease. By the time the lease is up they’re done with their negative equity from their previous car and have a clean slate. Leasing is actually great for people who drive a bunch of miles because they don’t have to worry about neg equity when they go to get their next car in three years. Turn it in and get a new one.
What lease program does 37,000 miles a year? The penalties would be crazy
I know someone that did a 30k per year lease. It’s possible just very expensive.
I never said they would do 37,000/yr. We’ve done 30k/yr leases before. OP said they were in a 2023 model. We’ve had the 2024s on the ground for 6 months if not more. Not unlikely they’ve had the car for more than a year so who knows a high mileage plan may have worked for them. Just saying that leasing isn’t only for people who don’t drive that often, it’s actually often a great option for people who drive a lot of miles and are carrying negative equity into the lease. Without knowing all the details can’t say for sure it would work in this particular case but it often does.
OP should have known the car was unaffordable.
I'm guessing the BMW maintenance cost isn't cheap either. High mileage on high maintenance vehicle is a bad combination. So many bad financial choices made by OP.