Getting Out from Under an Inverted Car Loan
There comes a day in most people's lives when they are faced with the little problem of their car not being worth what they owe on it. In other words, they owe more than the car is actually worth. In such situations, what can a person do to get out from under an inverted car loan such as this?
The first step to getting out of this crazy situation is to understand that you are not alone. Roughly 30% of people in the United States are in similar situations, and what's more is that many of these people are in this situation from the get go. Now that you know you are not alone, the next step is to take stock of what your current options are.
Legally, there is little that anyone can do to get out of this situation. By legally, I mean that there is little chance of being able to take the lender to court and win. However, it is sometimes possible, and if you are in such a situation, then you can certainly contact your local Consumer Affairs office to see if there is any advice or options that they would suggest. If this state agency suggests legal recourse, then go with it.
One of the more common strategies people use to get out of such situations is to try and sell the car. Unfortunately, unless you are able to sell the car for what you owe, you are still responsible to pay the loan in full, regardless of who actually owns the car.
Another common strategy is to trade in the car that is upside down for a new vehicle. While this may get you out from under one inverted car loan, it is going to put you right back under another one. Typically, when you trade in any car, unless you own the vehicle outright, anything that you owe on it is going to be added to the price on the new vehicle. Basically this is the same situation, only with a different car.
Finally, the best way to possibly get out from under any inverted car loan situation is to try and hold onto the vehicle for as long as you can. The longer that you hold onto it, the closer the loan is going to get to true value of the car. Your best bet would be to hold onto the car until you have completely paid it off, then if you have to have a new car, use it to trade in for a new one.
Financing can be one of the most stressful and difficult parts of any new car purchase. Here are some tips you can use to ...
One of the trickiest aspects of purchasing a new car is trying to figure out the sticker price. While it is true that ...
On the average, when most people begin thinking of purchasing a new car they only really focus on the sticker price. A few ...