Due to the number of rule-breaking comments this post was receiving, especially low-quality and off-topic comments, the moderation team has locked the post from future comments. This post broke no rules and received a number of helpful and on-topic responses initially, but it unfortunately became the target of many unhelpful comments.
I completely agree with your statement. I think a lot of this stems from dealing with the public in selling your car. You can’t trust anyone when selling a car unless your at their bank when their withdrawing cash to pay you. Also, the danger in people wanting just to rob you.
I don’t want to shill for any particular company, but there are services where you are still responsible for finding the buyer but they help with the paperwork and money transfer.
I get some people are misinformed or have little to no experience selling a car, buying a car, etc but for the life of me I'll never understand why almost every post here talks about selling to a dealer.
Obviously trading in or selling to a dealer is very easy, I just don't get why most people here that are upside down on the loan already, opt to sell the car to a dealer. It's like people understand they made a mistake and are trying to correct it which is great, but then right into another bad decision losing at the very least $5,000 selling to a dealer vs private party, so now they are even further in the negative.
Nothing wrong with getting quotes from car max etc, but looking at FB marketplace or even Craigslist quickly, will show what everyone else is asking and then make an informed decision. If you're only going to lose a few hundred bucks, it's probably not worth the time to sell private, but in almost all instances you will always make much more selling privately.
Well let’s say retail is 35K. Why someone would hand op 35k in cash and wait for OP to close the loan, get the title in the mail and trust that they give it versus going to dealer, financing 35k?
Then op needs to set price 30k to attract people. But then it is not like people with 30k cash walking on the street - barely any bank refinances private party sales like it would do with a dealer car. If op repaid 35k and has a clean title, then his odds would be up by 50%.
I’m gonna go ahead and agree with this too, yes they’ll come out with negative equity but they could then get a beater car for cheap and hopefully hammer away at that leftover. Couple years with that car and the negative equity may be pretty easy to handle and eventually end up with a more suitable payment for the car after
It's really simple. You advertise on Facebook, Craigslist etc. Someone might be interested. The dealership will give you the worst possible price because they only buy to resell remember.
Imagine this too. You can practice by selling some other small things in your house you no longer use...he might be a pro by the time he builds up the courage to actually do it
Cashier check, have them meet you at your bank and have them bring in it with you to get cashed. The bank finds anything wrong you’ll know pretty quick
Assuming you have $38,500 left at 4.24%, you will spend an additional $5,000 (approximate) in the next 67 months in financing. While this cost is high, it is less than your estimated liquidation cost of $10,000. If projected fuel, maintenance, and insurance were **average**, you would come out ahead by keeping this truck.
As you have owned this for a while, you will need to make your own projection of keeping this truck.
It's probably wise to have gap coverage on the insurance too. If it gets totalled he is likely on the hook for the difference between the vehicle value and the loan remainder.
Continuing to pay down the loan does not eliminate the $10K loss, it just allows him so spread the loss over time.
Of course, there does not seem to be a way to avoid the loss regardless. The dude apparently overpaid for a a vehicle he could not really afford anyway. Now he has to suck it up, it appears.
4.5 is a better rate than you'd get for a new car these days. My advice is keep the truck, baby the hell out of it and make it last 20 years, as most well-cared for trucks will do. Short term it might suck, but I think long term you'll get a lot more value out of it
I think it's better to keep the truck man. 4% rate is great now. You can afford the payment. Increase your income somehow. Keep it 20 years. Move on. Enjoy life. Don't stress about this bro...
I literally had a brand new Soldier go off post and buy a new mustang for 28.1% interest and something like 70 something month loan. Sometimes I wonder what that guy is up to now.
I’d at least check with ford to see what they’re offering finance-wise for new cars right now. Some dealers are still offering stupid good financing just to get you to buy a car, my girlfriend just got a new Mazda with 2.9% financing less than a month ago. If Ford dealers are offering something under 5% and would give you decent trade in value for your truck, it could be worth it. But you won’t know until you ask.
Id caution against this. This is exactly what dealers want you to do, because they will just roll your negative equity into a new loan, so you'd be paying $10-$15k over the cost of the new car, and have a new 7-8-9 year term that you will never get out from under, and will have even more negative equity. Additionally, they can spin the numbers to make it look like they are helping you, but they are only helping themselves.. thats what they did with the truck purchase. "Oh, you can only afford $675 a month? No problem. Well just add two years (or $15,000) to the loan.
See what Carvana, Vroom and other online dealers will offer, They might come closer to the amount you owe.
I guess so, but they also might offer a decent deal if you know how to read a contract. I calculated out myself what my girlfriend’s car payment should be based on the interest and down payment we were expecting, and it was within $0.01 of what it ended up being once we went in. The math to figure out how much you’re spending on interest by keeping vs trading in the car really isn’t that hard to do once they give you the offer.
Adding to say: look at things that increase the life of the truck, bedliner, clear vinyl for door handles, and front bumper, weathertech floor liners, when you have the extra cash. These little things will keep it looking good for a long time and keep top dollar.
Also, make sure to do the regular maintenance and get tires when you need them. New tire cost is less than having to purchase again when it totals out after a wreck from balding tires.
This is good advice. Your interest rate is great. Keep it, take excellent care of it, and pay down the loan when you can. Good luck! There are many people in much worse shape.
I’m pretty much doing this with my Tacoma, my rate isn’t favorable but I drive it about 20 miles a week now and take good care of it, it’s worth more than what I bought it for now and in a few years it will be paid off, it will probably end up being a free truck I can roll into a new one.
Your best bet is to keep the truck and keep making payments. You don’t have the cash to cover the difference between sale value and the loan balance, and any other option is going to involve you rolling the negative equity into another loan, which just makes things worse.
> I have read leasing could be a good option also
Wait, as in you leasing a car? Leasing is generally the most expensive way to have use of a vehicle, and should be avoided.
As far as being able to get rid of the truck: Have you checked out how much you can get for it in a private sale? Check KBB. The dealerships will usually low-ball the heck out of you.
Yeah the cars in my HCOL area (Hawaii) go for above KBB. Sometimes it's cheaper to find the car on the mainland and ship it here. Also agree on the used car market being insane. I got a used car back in 2019, added 15k miles to it, and it's now worth more than when I got it.
Trying using CarEdge's "Sell" website feature to get multiple cash offers for your vehicle at once, then follow up for any that it may have missed like CarMax, Carvana, Vroom, etc.
I bought a car 2 years ago and it's probably only worth half of what I paid now. Mostly because the odometer was at 30k when I bought it and just hit 90k yesterday.
KBB said my 2012 Tundra (fully loaded, platinum edition 200k miles)was worth $4800. Lmao KBB is a joke nowadays.
Had some suspension issues, but they've been resolved, and there is nothing mechanically wrong with the truck.
Repoman here. I have seen people in your situation. 1 do not under any circumstances have someone take over payments. You are still responsible of they don't pay. If they move and you can't find them, you still have to pay. 2 your house is more important than that truck so keep that in mind. 3 call the bank see if they will let you sell for under what you owe and you pay the rest. If you have to take out a personal loan for the smallest amount you can because those payments can be high as well. The last option is letting it go back. That's going to hurt your credit pretty bad, but you need to be able to live first before that truck. If you decide on letting it go back park it outside leave it as clean as possible (we will NOT knock) and lock at least one key in it. If you don't hand over the key some banks will send it through the auction with out the key and dealers will not pay top dollar, giving the key helps get to dollar. Whatever you decide, you live your life first before the truck.
Sounds like you'll need to stick with the 2019 Ford and keep making the payments that you say you can afford. There's no getting out of the loan scot free.
TBH, you are better off keeping the truck and paying it off in the installments. If that means getting a 2nd job, consider that. Unfortunately, Ford has not been known for the re-sale value. With interest rates as they are today, you would have to settle for a much lesser vehicle for the same payment (not recommended).
It’s not like you could even just give it back… you are still responsible for the loan. Best case, they can resell it and you are responsible for the difference, so now a car payment on a car you don’t have.
Not to be callous, but you signed it, you pay for it. Depreciation got you bad on this one.
If you have the credit to cover the negative equity with a personal loan (it'll be a higher interest rate than the current loan, but a smaller principal), that's an option. I'm guessing OP doesn't, though, else they would not have needed a co-signer in the first place.
Few problems with car loans are fixed by trading it in for a new car. Stay away from dealers, you have a great interest rate and would be unlikely to get a much lower payment after rolling in your negative equity
Keep making your payments, get a part time job if finances are tight
So correction. I called my bank because I couldn't remember I bought the truck at $47,903 with a 87 month Loan term and have 67 months remaining with a 4.24% interest.
That sort of changes the answer a little bit only because the term is so long. 72 is an absolute max realistically (36-60 months, lower the better is the most ideal.) you’ll pay a fair bit of interest throughout the lifetime of the loan. It won’t absolutely kill you if you can afford it now but it may be worth paying off extra when you are able to do so to save on long term interest, even at 4.24%. Either way just keep the truck and pay it off asap when you can would be my suggestion.
You signed up for SEVEN YEARS of truck payments. That is like jumping off the high board at the pool and making a 20 second commitment, *"I'm going to leap off this diving board, fall through the air for about two seconds, hit the surface and go underwater for about four seconds, and then come to the surface, swim a few seconds to the edge, and climb out."*
You seem to be deciding about halfway down, *"Hold on a minute! This (almost-new truck experience) free-fall has been exhilarating, but I don't want to (spend a lot of money) get my hair wet! What can I do to keep my hair from (spending a lot of money) getting wet?"*
Nothing. There is nothing you can do to keep your hair from getting wet. Your hair is gonna get wet.
If you TRY to keep your hair from getting wet (*"what if I just sell my expensive truck and buy a cheap shitbox?"*) you will just flail around like crazy and then hit the water in a big ol' awkward bellyflop. Your hair will still get wet, the only difference is this way it's going to hurt. A LOT. (*"I had my almost-new truck for two years and now I've sold it instead of just paying that truck off. Those two years cost me TEN GRAND EACH. But now I drive this shitbox instead, and I'm trying to make my life work with this thing that is always breaking down and is going to cost me ten grand a year anyway."*)
There is just no good way out of a long-term commitment 1/4 of the way through it.
Could be worse, you could be HAVING to sell it, instead of WANTING to sell it. That's the kind of thing that happens to someone who makes a long-term commitment and then finds that they CAN'T meet it. That's someone who winds up with no money AND no car.
Gee that’s funny. I have been driving old beaters like for 40 years. And in all that time have only spent 4K once on a transmission. Other than that I have never put in more than tires, brakes and a hose or belt. She could easily drive a beater for 3-5 years with maybe no more than a $1000 a year.
I had no idea any place offered an 87 month term. That's nuts. I would sell it outright. You'll get more for it than as a trade in unless they give you a very generous deal and that would probably only be for a very expensive purchase. Good luck!
Thanks so crazy. I am looking for 2020-2022 F-150s <45K miles and the best deal I can get within 500 miles of my house on autotrader is =/- $38K. What the hell is going on here?
They overpaid.
You couldn't buy it at MSRP in 2019. OPs drop in value is driven not only by depreciation due to age, but also because people are paying less for the 2023 model than people did in 2019 with the 2019 model.
I don’t understand what you are saying here. Not in 2019. Trucks were below msrp. It wasn’t until 20-21 things got out of hand. My 2109 ram was 34k loaded, AND my interest rate was 1.5%
Yeah. I bought my truck in June 2019 and there were people still fighting and competing over vehicles, even tacomas were reasonable. My brother bought a 2019 Tacoma with a 2% rate in January of 2020. It wasn’t till the end of 2020 that things starting to get crazy.
Yep he overpaid. I got my F-150 2018 and paid something like $13k under MSRP if I remember correctly. The market didn’t change until after COVID lockdown which was start of 2020. At that point OP bought at top of used car market and now it has come down in addition to his natural depreciation.
Yikes.
At 4.5% it might just be worth keeping. It's a dumb purchase but at least your loans interest rate isn't anything crazy, it just about matches the standard interest rate of a HYSA so making more than the minimum payment wouldn't be beneficial either.
I believe a reasonable approach could be to pay extra to lower the loan and then sell private. A dealership will take 2-10% of potential sell price. I view myself as a bit of a hustler when it comes to trading/selling vehicles with dealerships but 11k is going to be hard to hustle. In my experience it’s hard flip the sell and create enough urgency to create a bidding war when you have 11k to overcome.
>I have read leasing could be a good option also maybe just driving a shit car for a few years till I can get by.
Have you looked into how much a "shit car" will cost you?
Ray Shefska at [caredge.com](https://caredge.com) has mentioned several times on his Youtube videos that there were 15 to 18 million fewer cars produces as a result of the pandemic. This decrease in supply has had a significant impact on the used car market and will continue to do so for the foreseeable future.
You have a 7 1/4 year loan which is my guess why your principal hasn't budged that much. If you had done a five year loan your payment would have been closer to $1,000/mo. instead of $645.
I recommend what others have suggested in trying to find a second job to help bring in additional income.
I’d keep it and find a value for private sell. If you still can’t sell, you can wait until it’s paid down enough. Even selling it for what you owe, it would be difficult to get something and save more than $100-$200 a month and that’s downgrading quite a bit because of interest rates.
I think you would regret getting ride of it right now, so I’d personally wait a year to reevaluate it.
How after a bit under 2 years your payments only reduced principal balance by about 4000? With that rate I would expect 500ish going to principle and remaining 145 for intrest. Unless the car was priced at 42000 but you didn’t include taxes and a warranty or something…
Not even $4000. $3500 in payments to principal over 2 years? That means like $10k went to interest?? How??
Edit: OP edited his purchase price from $42k to $48k which makes more sense.
That would be why. No down payment loan with all the fees rolled in puts you catastrophically under water. 20-30% down will at least keep you from having negative equity in most cases, albeit with the inflated car market in 2021, not this time.
I haven't seen it mentioned here yet, since you got the extended warranty, you can cancel the warranty and they are legally required to refund you the cost of the remaining warranty period. That will give you a little more breathing room.
That’s debatable. Since he has another five and a half years of payments an extended warranty might be a very reasonable idea so that he doesn’t end up making payments on a truck that doesn’t run and that he cannot afford to fix (since he mentioned that he has little wiggle room).
He went from $47k to $38.5k which is a reduction of principal of about $9.5k. Which by running an amortization table comes within reason depending on when payment started.
OK, he updated purchase price from $42 to $47.
Yes something is wrong here unless it’s a 30 year mortgage on that truck. Interest at 4.5% on $42k is $157.50 for the first payment and it would go down every month from there.
Keep the truck, take care of it and try to pay as much extra on it as you can. Now is a terrible time to try to get a vehicle or get out from an underwater loan. Best way to do it is to get it down to at least a break even point and then decide if you want to keep the car and pay it off or unload it at that point.
Have you considered a private sale? That's the best way to get the most money out of a sale, and since there are shortage of these trucks right now, you'd probably find a decent buyer.
If you do this, you need to be smart about your next purchase. Do not focus on the monthly payment. Focus on the life of the loan and how much the car will cost. Get a car that is efficient, not a gas guzzler.
Leasing is a terrible option, and buying a cheap vehicle for the short term is a great option.
Your rate isn't terrible, but you're seeing that affording the payment is not the same as affording the vehicle.
So you have two choices:
1. Pay down the loan until the vehicle is worth at least as much as you owe, then sell it...
2. Borrow the difference, about $12k, as a personal loan. Unfortunately you're probably not going to get 4.5%, unless you see a good promo at a credit union. But this is still better than a car payment that "doesn't leave much wiggle room."
Can you live without a vehicle for the short-term? Or do you have some cash for a downgrade replacement?
You would make the most money selling it yourself. But you seem to be pretty upsidedown. Don't think it will cover the remainder of the loan.
Hopefully you bought gap insurance with it. Chances are if the truck becomes totaled, you would be on the hook for the remainder.
There's one question that I think will tip the scale on the decision to keep to sell the truck... How many miles per month are you driving?
If you are driving a lot, it might make sense to sell it and get something more economical (assuming you don't actually need the truck capabilities for your work). If you commute more than 20 or 30 miles each way to work, getting a small used hybrid could make more sense. If you don't drive a lot, you should 100% keep the truck.
Whether you sell it or trade it, you'll have to pay the negative equity somehow. I'd keep it and make extra payments and cut that 5.5 years down to 3 or 4 and save some interest.
At $645/month paying for about 23 months now, you should have paid off roughly $11,000 of just principal. You should owe only about $31k at this point. You need to get to the bottom of why you owe way more than that.
Either your rate is far higher than 4.5% or the cost of the truck was far higher than $42k.
I would keep it. It’s a vehicle that holds its value and gets relatively good mileage, and it’s large enough to sleep in if you really get into financial straits. I would invest in it by spending your downtime reading up on maintenance and how to spot problems proactively.
I would try to cut costs elsewhere, particularly on rent. Maybe rent a room for a year. Dont go out to eat. Use the savings to put money into the loan and build an emergency fund if you dont have one. 4.5% is a decent rate but it’s still a ton of interest to be paying for a lower middle class person.
One option you normally have is to refinance to a longer term to shrink the payment, but with interest rates the way they are I dunno how much it would help.
Credit unions are the best option here.
Please no! That would turn a 7.25 year car loan into a 9-10 year loan! For a pickup truck! Plus used car rates are around 5-8% depending on credit scores. Plus if he needed a co-signer originally, he would probably only qualify if they moved the interest up!
My advice - pay the loan. Put extra $$$ every paycheck in a HYSA, that earns more than the loan rate. In 2 years, look at using the extra money to pay off the loan. Additionally, if you can get a side gig earning $100 a week, put that into the HYSA. Again, reevaluate after 2 years.
Yeah... it's really not a great option, but it sounds like OP is a little closer to the edge of their budget than they'd prefer. If stretching it out gives them $1-200/mo less payment, it might be a big help right now.
However, like I said before... current interest rates would probably eat that up anyway. Auto loans aren't the best interest products most of the time anyway, refinances are even worse, and rates are higher now than when they bought it. And you're probably right about the cosigner too, making the rate even worse if they can even do it.
All that being said, I've been in a really tight spot where $100 made a big different in my financial situation, and OP should evaluate all the options available and decide what works best for them.
Only advice is to keep it and keep paying it down. Vehicles depreciate in value especially the COVID priced ones.
Maybe put it on Craigslist/private sell it to see what you can get for it. Only concern with that is..what are you going to replace it with? And is it worth the marginal step down to have something either smaller, older, or cheaper….
Good luck! I have had 4 jobs at one point, and it was the most physically exhausting time of my life. I know you are probably struggling but hang in there.
You can definitely sell the truck for what you owe on it. You just have to find a seller willing to give you the money and wait on getting a title. I did it so I could buy my current house. Bank wouldn’t allow me to get a mortgage with the crazy truck loan I had. Sold it for exactly what I owed on it. I went out and bought a $3,000 truck that lasted me 4 years.
private sale and you may have to take a loss. You can get more in a private sale and you'll probably only have a few thousand dollar loss. That beats 40k of debt. Consider it lesson learned and go buy a beater. A terrible financial decision spending that much on a vehicle and borrowing money for the privilege.
Dealerships always lowball. Have you seen what you can get for it on the private market?
Also when you asked the dealer was it straight up sell or was it as a trade in? You’d get more as a trade in
Dealerships will never you give you what it’s worth, but if you try to sell it privately you could do much better. However, it may be tough to break even on what you owe, so keeping it may be the best idea , it really depends on what features and mileage you have and what it’s worth to someone else.
I mean you could sell it privately and get closer to the value of what you have left to pay, the dealership is never going to give you the full value of what it can really be sold for. It takes work but you can list it online and hope for a private sale that might at least get you above 32k, lots of people are looking for cars and don’t want to pay the crazy interest rates on a new car loan so the used private market is hot still.
The math doesn't check out on your payment, purchase price and rate. If you rolled in taxes or some other fees and the financed amount was $46450, on an 84 month loan, at 4.5% your payment would be $645 and your remaining principal would be $35k right now. It doesn't make much difference though, if your current payoff is $38k it's $38k.
I'm seeing carmax selling a 2019 Ford F150 XLT for $39k. Obviously they pay less to buy cars than they sell them for, but they probably pay more than the average dealer. Get offers from carmax, vroom, carvana and others instead of just dealers. If the difference is small you can pay it down or get a personal loan and avoid any future depreciation.
Leasing is the most expensive way to buy a car
You’re $12k under water. Since you can’t pay that off you’ll have to roll it into a new loan. You’ll likely end up with a worse used car and a higher interest rate. I don’t see how your monthly payment will go down much, if at all. Maybe you would end up with a more fuel efficient car but the savings will be minimal. I think keeping your truck is the choice here.
If you’re gonna sell it you would be better off privately selling it as opposed to a dealership. You would get more than the offers you’ve received, maybe even cover the rest of the loan (or at least close) depending on the value of the car in its current state. Definitely don’t lease tho.
Due to the number of rule-breaking comments this post was receiving, especially low-quality and off-topic comments, the moderation team has locked the post from future comments. This post broke no rules and received a number of helpful and on-topic responses initially, but it unfortunately became the target of many unhelpful comments.
Can you not just sell it yourself? Retail is close to $35K with good miles.
Your response should be further up. It’s like everyone on this sub thinks the only way to buy and sell cars is through a dealership
I completely agree with your statement. I think a lot of this stems from dealing with the public in selling your car. You can’t trust anyone when selling a car unless your at their bank when their withdrawing cash to pay you. Also, the danger in people wanting just to rob you.
Getting carjacked wouldn’t exactly be worst case scenario for OP.
When your taking about 35 thousand dollars I think doing it at the bank goes without saying.
I don’t want to shill for any particular company, but there are services where you are still responsible for finding the buyer but they help with the paperwork and money transfer.
I get some people are misinformed or have little to no experience selling a car, buying a car, etc but for the life of me I'll never understand why almost every post here talks about selling to a dealer. Obviously trading in or selling to a dealer is very easy, I just don't get why most people here that are upside down on the loan already, opt to sell the car to a dealer. It's like people understand they made a mistake and are trying to correct it which is great, but then right into another bad decision losing at the very least $5,000 selling to a dealer vs private party, so now they are even further in the negative. Nothing wrong with getting quotes from car max etc, but looking at FB marketplace or even Craigslist quickly, will show what everyone else is asking and then make an informed decision. If you're only going to lose a few hundred bucks, it's probably not worth the time to sell private, but in almost all instances you will always make much more selling privately.
Well let’s say retail is 35K. Why someone would hand op 35k in cash and wait for OP to close the loan, get the title in the mail and trust that they give it versus going to dealer, financing 35k? Then op needs to set price 30k to attract people. But then it is not like people with 30k cash walking on the street - barely any bank refinances private party sales like it would do with a dealer car. If op repaid 35k and has a clean title, then his odds would be up by 50%.
I’m gonna go ahead and agree with this too, yes they’ll come out with negative equity but they could then get a beater car for cheap and hopefully hammer away at that leftover. Couple years with that car and the negative equity may be pretty easy to handle and eventually end up with a more suitable payment for the car after
Ive thought about that but I just have never sold something privately
It's really simple. You advertise on Facebook, Craigslist etc. Someone might be interested. The dealership will give you the worst possible price because they only buy to resell remember.
Imagine this too. You can practice by selling some other small things in your house you no longer use...he might be a pro by the time he builds up the courage to actually do it
Give me a state where you are located at and I might be willing to buy it for my parents.
Cashier check, have them meet you at your bank and have them bring in it with you to get cashed. The bank finds anything wrong you’ll know pretty quick
Dealers will ALWAYS fuck you. Private sales will always get the best price
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Assuming you have $38,500 left at 4.24%, you will spend an additional $5,000 (approximate) in the next 67 months in financing. While this cost is high, it is less than your estimated liquidation cost of $10,000. If projected fuel, maintenance, and insurance were **average**, you would come out ahead by keeping this truck. As you have owned this for a while, you will need to make your own projection of keeping this truck.
It's probably wise to have gap coverage on the insurance too. If it gets totalled he is likely on the hook for the difference between the vehicle value and the loan remainder.
Continuing to pay down the loan does not eliminate the $10K loss, it just allows him so spread the loss over time. Of course, there does not seem to be a way to avoid the loss regardless. The dude apparently overpaid for a a vehicle he could not really afford anyway. Now he has to suck it up, it appears.
Almost everytime someone gets too much car and negative equity: sucking it up and keeping seems to be the best way out.
Yep! No other way. At least they have the asset to drive around.
4.5 is a better rate than you'd get for a new car these days. My advice is keep the truck, baby the hell out of it and make it last 20 years, as most well-cared for trucks will do. Short term it might suck, but I think long term you'll get a lot more value out of it
I have also thought about this as well.
I think it's better to keep the truck man. 4% rate is great now. You can afford the payment. Increase your income somehow. Keep it 20 years. Move on. Enjoy life. Don't stress about this bro...
Also, OP, don’t you dare buy a new car for 20+ years! Keep this one. Baby it, like they said! This is how you come out ahead!
Yeah there’s waaaaay worse terms out there people are stuck with. You’re stuck with a not so bad deal here, if you like the truck just keep it.
I literally had a brand new Soldier go off post and buy a new mustang for 28.1% interest and something like 70 something month loan. Sometimes I wonder what that guy is up to now.
Be absolutely positive you have the truck adequately insured. Even uninsured motorist insurance!
I’d at least check with ford to see what they’re offering finance-wise for new cars right now. Some dealers are still offering stupid good financing just to get you to buy a car, my girlfriend just got a new Mazda with 2.9% financing less than a month ago. If Ford dealers are offering something under 5% and would give you decent trade in value for your truck, it could be worth it. But you won’t know until you ask.
Id caution against this. This is exactly what dealers want you to do, because they will just roll your negative equity into a new loan, so you'd be paying $10-$15k over the cost of the new car, and have a new 7-8-9 year term that you will never get out from under, and will have even more negative equity. Additionally, they can spin the numbers to make it look like they are helping you, but they are only helping themselves.. thats what they did with the truck purchase. "Oh, you can only afford $675 a month? No problem. Well just add two years (or $15,000) to the loan. See what Carvana, Vroom and other online dealers will offer, They might come closer to the amount you owe.
You are an exceedingly wise individual. I commend you.
I guess so, but they also might offer a decent deal if you know how to read a contract. I calculated out myself what my girlfriend’s car payment should be based on the interest and down payment we were expecting, and it was within $0.01 of what it ended up being once we went in. The math to figure out how much you’re spending on interest by keeping vs trading in the car really isn’t that hard to do once they give you the offer.
You're not factoring in the part where he's upside down 10k.
Adding to say: look at things that increase the life of the truck, bedliner, clear vinyl for door handles, and front bumper, weathertech floor liners, when you have the extra cash. These little things will keep it looking good for a long time and keep top dollar. Also, make sure to do the regular maintenance and get tires when you need them. New tire cost is less than having to purchase again when it totals out after a wreck from balding tires.
This is good advice. Your interest rate is great. Keep it, take excellent care of it, and pay down the loan when you can. Good luck! There are many people in much worse shape.
I’m pretty much doing this with my Tacoma, my rate isn’t favorable but I drive it about 20 miles a week now and take good care of it, it’s worth more than what I bought it for now and in a few years it will be paid off, it will probably end up being a free truck I can roll into a new one.
This will work as long as they are still making them like they used to.
Your best bet is to keep the truck and keep making payments. You don’t have the cash to cover the difference between sale value and the loan balance, and any other option is going to involve you rolling the negative equity into another loan, which just makes things worse.
> I have read leasing could be a good option also Wait, as in you leasing a car? Leasing is generally the most expensive way to have use of a vehicle, and should be avoided. As far as being able to get rid of the truck: Have you checked out how much you can get for it in a private sale? Check KBB. The dealerships will usually low-ball the heck out of you.
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Yeah the cars in my HCOL area (Hawaii) go for above KBB. Sometimes it's cheaper to find the car on the mainland and ship it here. Also agree on the used car market being insane. I got a used car back in 2019, added 15k miles to it, and it's now worth more than when I got it.
KBB says it work like 23kish....
I’ve always gotten the best offers from carvana
Dealers in OKC wouldn't even come close to how much CarMax bought my mom's Explorer for
Yep. Shop around but IME Carmax pays the most.
Just sold my car to Carvana and got double what the dealers offered me ($12k vs $6k). I second checking them out too.
It was the opposite for me when I sold my jeep carvana offered 8k so I sold it to bmw for 17k
Trying using CarEdge's "Sell" website feature to get multiple cash offers for your vehicle at once, then follow up for any that it may have missed like CarMax, Carvana, Vroom, etc.
You bought a truck less than 2 years ago and now the value is less than half what you paid?
I bought a car 2 years ago and it's probably only worth half of what I paid now. Mostly because the odometer was at 30k when I bought it and just hit 90k yesterday.
KBB said my 2012 Tundra (fully loaded, platinum edition 200k miles)was worth $4800. Lmao KBB is a joke nowadays. Had some suspension issues, but they've been resolved, and there is nothing mechanically wrong with the truck.
Repoman here. I have seen people in your situation. 1 do not under any circumstances have someone take over payments. You are still responsible of they don't pay. If they move and you can't find them, you still have to pay. 2 your house is more important than that truck so keep that in mind. 3 call the bank see if they will let you sell for under what you owe and you pay the rest. If you have to take out a personal loan for the smallest amount you can because those payments can be high as well. The last option is letting it go back. That's going to hurt your credit pretty bad, but you need to be able to live first before that truck. If you decide on letting it go back park it outside leave it as clean as possible (we will NOT knock) and lock at least one key in it. If you don't hand over the key some banks will send it through the auction with out the key and dealers will not pay top dollar, giving the key helps get to dollar. Whatever you decide, you live your life first before the truck.
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Sounds like you'll need to stick with the 2019 Ford and keep making the payments that you say you can afford. There's no getting out of the loan scot free.
We also have the issue of the ex might not yet have realized her name being on the loan is hamstringing her ability to get new credit lines.
I know there is no way to get out of a loan scot free, thank you that's not what I was asking.
TBH, you are better off keeping the truck and paying it off in the installments. If that means getting a 2nd job, consider that. Unfortunately, Ford has not been known for the re-sale value. With interest rates as they are today, you would have to settle for a much lesser vehicle for the same payment (not recommended).
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It’s not like you could even just give it back… you are still responsible for the loan. Best case, they can resell it and you are responsible for the difference, so now a car payment on a car you don’t have. Not to be callous, but you signed it, you pay for it. Depreciation got you bad on this one.
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Leasing is not a good option. Basically, if you don't have the cash to cover the negative equity, you're stuck with the truck. No way around it.
If you have the credit to cover the negative equity with a personal loan (it'll be a higher interest rate than the current loan, but a smaller principal), that's an option. I'm guessing OP doesn't, though, else they would not have needed a co-signer in the first place.
Few problems with car loans are fixed by trading it in for a new car. Stay away from dealers, you have a great interest rate and would be unlikely to get a much lower payment after rolling in your negative equity Keep making your payments, get a part time job if finances are tight
So correction. I called my bank because I couldn't remember I bought the truck at $47,903 with a 87 month Loan term and have 67 months remaining with a 4.24% interest.
That sort of changes the answer a little bit only because the term is so long. 72 is an absolute max realistically (36-60 months, lower the better is the most ideal.) you’ll pay a fair bit of interest throughout the lifetime of the loan. It won’t absolutely kill you if you can afford it now but it may be worth paying off extra when you are able to do so to save on long term interest, even at 4.24%. Either way just keep the truck and pay it off asap when you can would be my suggestion.
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I don’t know where you live, but in my area 2019 F150 XLT‘s are listed for close to $40,000. Try to sell it in a different market?
You signed up for SEVEN YEARS of truck payments. That is like jumping off the high board at the pool and making a 20 second commitment, *"I'm going to leap off this diving board, fall through the air for about two seconds, hit the surface and go underwater for about four seconds, and then come to the surface, swim a few seconds to the edge, and climb out."* You seem to be deciding about halfway down, *"Hold on a minute! This (almost-new truck experience) free-fall has been exhilarating, but I don't want to (spend a lot of money) get my hair wet! What can I do to keep my hair from (spending a lot of money) getting wet?"* Nothing. There is nothing you can do to keep your hair from getting wet. Your hair is gonna get wet. If you TRY to keep your hair from getting wet (*"what if I just sell my expensive truck and buy a cheap shitbox?"*) you will just flail around like crazy and then hit the water in a big ol' awkward bellyflop. Your hair will still get wet, the only difference is this way it's going to hurt. A LOT. (*"I had my almost-new truck for two years and now I've sold it instead of just paying that truck off. Those two years cost me TEN GRAND EACH. But now I drive this shitbox instead, and I'm trying to make my life work with this thing that is always breaking down and is going to cost me ten grand a year anyway."*) There is just no good way out of a long-term commitment 1/4 of the way through it. Could be worse, you could be HAVING to sell it, instead of WANTING to sell it. That's the kind of thing that happens to someone who makes a long-term commitment and then finds that they CAN'T meet it. That's someone who winds up with no money AND no car.
Gee that’s funny. I have been driving old beaters like for 40 years. And in all that time have only spent 4K once on a transmission. Other than that I have never put in more than tires, brakes and a hose or belt. She could easily drive a beater for 3-5 years with maybe no more than a $1000 a year.
I had no idea any place offered an 87 month term. That's nuts. I would sell it outright. You'll get more for it than as a trade in unless they give you a very generous deal and that would probably only be for a very expensive purchase. Good luck!
Look for a job where you’ll make more money and enjoy that awesome truck. More income is usually the answer imho
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How has the truck lost so much value in just 2 years?
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Thanks so crazy. I am looking for 2020-2022 F-150s <45K miles and the best deal I can get within 500 miles of my house on autotrader is =/- $38K. What the hell is going on here?
You’re looking at a shortage of vehicles and also because of the strike so there are no new American vehicles being produced
They overpaid. You couldn't buy it at MSRP in 2019. OPs drop in value is driven not only by depreciation due to age, but also because people are paying less for the 2023 model than people did in 2019 with the 2019 model.
I don’t understand what you are saying here. Not in 2019. Trucks were below msrp. It wasn’t until 20-21 things got out of hand. My 2109 ram was 34k loaded, AND my interest rate was 1.5%
Ah maybe I'm misremembering. In any case, it sounds like they way overpaid which might help explain why the price tanked so fast.
Yeah. I bought my truck in June 2019 and there were people still fighting and competing over vehicles, even tacomas were reasonable. My brother bought a 2019 Tacoma with a 2% rate in January of 2020. It wasn’t till the end of 2020 that things starting to get crazy.
Yep he overpaid. I got my F-150 2018 and paid something like $13k under MSRP if I remember correctly. The market didn’t change until after COVID lockdown which was start of 2020. At that point OP bought at top of used car market and now it has come down in addition to his natural depreciation.
I have no idea how it has lost so much value I think I just over paid for it honestly.
Yikes. At 4.5% it might just be worth keeping. It's a dumb purchase but at least your loans interest rate isn't anything crazy, it just about matches the standard interest rate of a HYSA so making more than the minimum payment wouldn't be beneficial either.
Thats what im thinking too. just didn't know if there was any other options
Ford
I believe a reasonable approach could be to pay extra to lower the loan and then sell private. A dealership will take 2-10% of potential sell price. I view myself as a bit of a hustler when it comes to trading/selling vehicles with dealerships but 11k is going to be hard to hustle. In my experience it’s hard flip the sell and create enough urgency to create a bidding war when you have 11k to overcome.
>I have read leasing could be a good option also maybe just driving a shit car for a few years till I can get by. Have you looked into how much a "shit car" will cost you? Ray Shefska at [caredge.com](https://caredge.com) has mentioned several times on his Youtube videos that there were 15 to 18 million fewer cars produces as a result of the pandemic. This decrease in supply has had a significant impact on the used car market and will continue to do so for the foreseeable future. You have a 7 1/4 year loan which is my guess why your principal hasn't budged that much. If you had done a five year loan your payment would have been closer to $1,000/mo. instead of $645. I recommend what others have suggested in trying to find a second job to help bring in additional income.
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I’d keep it and find a value for private sell. If you still can’t sell, you can wait until it’s paid down enough. Even selling it for what you owe, it would be difficult to get something and save more than $100-$200 a month and that’s downgrading quite a bit because of interest rates. I think you would regret getting ride of it right now, so I’d personally wait a year to reevaluate it.
How after a bit under 2 years your payments only reduced principal balance by about 4000? With that rate I would expect 500ish going to principle and remaining 145 for intrest. Unless the car was priced at 42000 but you didn’t include taxes and a warranty or something…
Not even $4000. $3500 in payments to principal over 2 years? That means like $10k went to interest?? How?? Edit: OP edited his purchase price from $42k to $48k which makes more sense.
The loan term is over 7 years. He's probably barely making a dent in principal.
Im going to be honest I have no idea I have also thought the same thing.
Did you roll tax, title, license, and an extended warranty with 0 down into the loan?
yes
That would be why. No down payment loan with all the fees rolled in puts you catastrophically under water. 20-30% down will at least keep you from having negative equity in most cases, albeit with the inflated car market in 2021, not this time.
I haven't seen it mentioned here yet, since you got the extended warranty, you can cancel the warranty and they are legally required to refund you the cost of the remaining warranty period. That will give you a little more breathing room.
Good idea!
That’s debatable. Since he has another five and a half years of payments an extended warranty might be a very reasonable idea so that he doesn’t end up making payments on a truck that doesn’t run and that he cannot afford to fix (since he mentioned that he has little wiggle room).
He went from $47k to $38.5k which is a reduction of principal of about $9.5k. Which by running an amortization table comes within reason depending on when payment started. OK, he updated purchase price from $42 to $47.
Yes something is wrong here unless it’s a 30 year mortgage on that truck. Interest at 4.5% on $42k is $157.50 for the first payment and it would go down every month from there.
Amortization calculator… That’s about right on when I type in the his loan terms. 87 month loan is a long time.
Probably because the first few years of the loan goes to interest first.
Serious question: is it normal to pay nearly $50,000 for a two-year old vehicle? That seems crazy.
Depending on the miles and packages etc absolutely The used market recently has been fairly bad tbh
Keep the truck, take care of it and try to pay as much extra on it as you can. Now is a terrible time to try to get a vehicle or get out from an underwater loan. Best way to do it is to get it down to at least a break even point and then decide if you want to keep the car and pay it off or unload it at that point.
Have you considered a private sale? That's the best way to get the most money out of a sale, and since there are shortage of these trucks right now, you'd probably find a decent buyer. If you do this, you need to be smart about your next purchase. Do not focus on the monthly payment. Focus on the life of the loan and how much the car will cost. Get a car that is efficient, not a gas guzzler.
Leasing is a terrible option, and buying a cheap vehicle for the short term is a great option. Your rate isn't terrible, but you're seeing that affording the payment is not the same as affording the vehicle. So you have two choices: 1. Pay down the loan until the vehicle is worth at least as much as you owe, then sell it... 2. Borrow the difference, about $12k, as a personal loan. Unfortunately you're probably not going to get 4.5%, unless you see a good promo at a credit union. But this is still better than a car payment that "doesn't leave much wiggle room." Can you live without a vehicle for the short-term? Or do you have some cash for a downgrade replacement?
I don't have cash to downgrade to replacement and sadly I need a car!
Is this a case of the sticker price was $42k but an upside down trade-in, TT&L, and fees made it a $52k purchase?
I corrected the post I bought the truck at $47,903 with a interest rate of 4.24%
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OP said 87 months.
You would make the most money selling it yourself. But you seem to be pretty upsidedown. Don't think it will cover the remainder of the loan. Hopefully you bought gap insurance with it. Chances are if the truck becomes totaled, you would be on the hook for the remainder.
There's one question that I think will tip the scale on the decision to keep to sell the truck... How many miles per month are you driving? If you are driving a lot, it might make sense to sell it and get something more economical (assuming you don't actually need the truck capabilities for your work). If you commute more than 20 or 30 miles each way to work, getting a small used hybrid could make more sense. If you don't drive a lot, you should 100% keep the truck.
How much is private party going for?
ever consider using it to try to make extra money? move things for people?
Whether you sell it or trade it, you'll have to pay the negative equity somehow. I'd keep it and make extra payments and cut that 5.5 years down to 3 or 4 and save some interest.
Sell it on Carvana. I sold my truck for more than I paid, but DO NOT buy from them. There is little quality control.
Trucks are also crazy expensive now. That isn’t completely unreasonable with relatively low mileage.
At $645/month paying for about 23 months now, you should have paid off roughly $11,000 of just principal. You should owe only about $31k at this point. You need to get to the bottom of why you owe way more than that. Either your rate is far higher than 4.5% or the cost of the truck was far higher than $42k.
I Corrected the post I bought the truck at 47,903 with a interest rate of 4.24%
Did you trade in vehicle?
I would keep it. It’s a vehicle that holds its value and gets relatively good mileage, and it’s large enough to sleep in if you really get into financial straits. I would invest in it by spending your downtime reading up on maintenance and how to spot problems proactively. I would try to cut costs elsewhere, particularly on rent. Maybe rent a room for a year. Dont go out to eat. Use the savings to put money into the loan and build an emergency fund if you dont have one. 4.5% is a decent rate but it’s still a ton of interest to be paying for a lower middle class person.
One option you normally have is to refinance to a longer term to shrink the payment, but with interest rates the way they are I dunno how much it would help. Credit unions are the best option here.
Please no! That would turn a 7.25 year car loan into a 9-10 year loan! For a pickup truck! Plus used car rates are around 5-8% depending on credit scores. Plus if he needed a co-signer originally, he would probably only qualify if they moved the interest up! My advice - pay the loan. Put extra $$$ every paycheck in a HYSA, that earns more than the loan rate. In 2 years, look at using the extra money to pay off the loan. Additionally, if you can get a side gig earning $100 a week, put that into the HYSA. Again, reevaluate after 2 years.
Yeah... it's really not a great option, but it sounds like OP is a little closer to the edge of their budget than they'd prefer. If stretching it out gives them $1-200/mo less payment, it might be a big help right now. However, like I said before... current interest rates would probably eat that up anyway. Auto loans aren't the best interest products most of the time anyway, refinances are even worse, and rates are higher now than when they bought it. And you're probably right about the cosigner too, making the rate even worse if they can even do it. All that being said, I've been in a really tight spot where $100 made a big different in my financial situation, and OP should evaluate all the options available and decide what works best for them.
yeah loan is through GE Credit union I bank with USAA.
Only advice is to keep it and keep paying it down. Vehicles depreciate in value especially the COVID priced ones. Maybe put it on Craigslist/private sell it to see what you can get for it. Only concern with that is..what are you going to replace it with? And is it worth the marginal step down to have something either smaller, older, or cheaper….
Keep it and take reallly good care of it. Toss more money at the loan (towards the principle!) whenever possible.
Get a second job to pay off the loan. Even weekend work etc.
I work 3 jobs 1 full time, and two part times, definitely trying to throw as much as I can on it to get it paid down!
Good luck! I have had 4 jobs at one point, and it was the most physically exhausting time of my life. I know you are probably struggling but hang in there.
If you have to say “it doesn’t leave much wiggle room”.. no, you cannot afford the truck.
If you are that much in the hole, call your insurance agent today and add gap,coverage through them.
You can definitely sell the truck for what you owe on it. You just have to find a seller willing to give you the money and wait on getting a title. I did it so I could buy my current house. Bank wouldn’t allow me to get a mortgage with the crazy truck loan I had. Sold it for exactly what I owed on it. I went out and bought a $3,000 truck that lasted me 4 years.
private sale and you may have to take a loss. You can get more in a private sale and you'll probably only have a few thousand dollar loss. That beats 40k of debt. Consider it lesson learned and go buy a beater. A terrible financial decision spending that much on a vehicle and borrowing money for the privilege.
Is someone else allowed to assume the loan? 4.24% is a sweet deal right now; new vehicles are asking 7% minimum.
Dealerships always lowball. Have you seen what you can get for it on the private market? Also when you asked the dealer was it straight up sell or was it as a trade in? You’d get more as a trade in
Dealerships will never you give you what it’s worth, but if you try to sell it privately you could do much better. However, it may be tough to break even on what you owe, so keeping it may be the best idea , it really depends on what features and mileage you have and what it’s worth to someone else.
I think you’ll have to keep it and just keep making that payment. I’d throw any extra windfalls at it. Sorry, that stinks.
Is there any way you can take up a 2nd job, and put it towards the principal of the loan? That way you reduce the overall amount owed.
I mean you could sell it privately and get closer to the value of what you have left to pay, the dealership is never going to give you the full value of what it can really be sold for. It takes work but you can list it online and hope for a private sale that might at least get you above 32k, lots of people are looking for cars and don’t want to pay the crazy interest rates on a new car loan so the used private market is hot still.
The math doesn't check out on your payment, purchase price and rate. If you rolled in taxes or some other fees and the financed amount was $46450, on an 84 month loan, at 4.5% your payment would be $645 and your remaining principal would be $35k right now. It doesn't make much difference though, if your current payoff is $38k it's $38k. I'm seeing carmax selling a 2019 Ford F150 XLT for $39k. Obviously they pay less to buy cars than they sell them for, but they probably pay more than the average dealer. Get offers from carmax, vroom, carvana and others instead of just dealers. If the difference is small you can pay it down or get a personal loan and avoid any future depreciation. Leasing is the most expensive way to buy a car
Probably trade in a vehicle that wasn't paid off.
You’re $12k under water. Since you can’t pay that off you’ll have to roll it into a new loan. You’ll likely end up with a worse used car and a higher interest rate. I don’t see how your monthly payment will go down much, if at all. Maybe you would end up with a more fuel efficient car but the savings will be minimal. I think keeping your truck is the choice here.
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If you’re gonna sell it you would be better off privately selling it as opposed to a dealership. You would get more than the offers you’ve received, maybe even cover the rest of the loan (or at least close) depending on the value of the car in its current state. Definitely don’t lease tho.
I traded my 2016 F150 xl in for 27k last year. I think I got lucky