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Dead car with a loan. What options does one have?


My ex wife has (had?) a 2013 BMX X3. She took it to the dealership in March and they did an oil change, and also found something wrong with the transmission (she said leaky transmission case or some such). Few thousand dollars later she was on the road. Six weeks later her car shut off while doing 70 on the highway with a “Drivetrain malfunction” error. She took it to a local shop, then the dealer, who both independently diagnosed this as engine failure. The dealer apparently said they found metal shavings in the engine which is indicative of it just being dead. They both said it would need a new engine to the tune of roughly $10k.

Trouble is the car is still under loan, and while running it’d be worth more than what’s left on the loan, that’s not the case when it’s dead. She doesn’t have $10k to get it fixed right away. What options does one have in a situation like this? Junk it and get what you can? Find a dealer that’ll take a car with no engine as some kind of a trade in? I’ve never seen a situation like this, so I figured I’d ask the good folks on here to help her out.

Is it past the 4 yr/ 50,000 mile drivetrain warranty?

It is and sho bought it about a year ago at a wholesale dealer.

IMO, her best choice now would be to find an independent shop and have them locate and install a used engine. It’s going to still be expensive but likely a lot less than the $10k.

You can’t just junk it as there is another party with a significant interest in the property and they have a say ion how it is dispositioned if you can’t settle the loan outright. Do you know how much is owed and who owns the loan (not specifically, just generally e.g. credit union, bank, loan company etc).

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Used BMW bought at wholesaler, engine damage and ex-husband asking legal question on auto forum. What could possibly go wrong? A lot of things.


I’d also get at least a 2nd, if not 3rd opinion on the “engine failure”. It’s rare for an engine to just die nowadays. Might be something simpler, let alone significantly cheaper, to repair. Good luck.

No harm done to ask a dealership (not necessarily BMW, whatever the next car you want to buy) what they’ll give you for it as a trade-in. If you want a new car anyway, that’s your best bet I’d guess. There’s plenty of usable parts there, if nothing else. Probably what would happen is one of the shop employees would buy it from the dealership, fix it, and sell it for a profit. You’ll probably be deficient in the amount needed to pay off the existing loan. The dealership may have a way to wrap that old loan into the new one. Given the car is a BMW, it’s probably going to cost a bundle to resolve, but I expect you already know that. Just choose the best of the available options is all. Second choice is to fix the problem with another engine. If you only have one opinion as to what’s causing the problem, good idea above to get another shop to look at it first.

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So why is the engine dead?

Metal shavings are usually indicative of not changing the oil often enough or running the engine out of oil after not ever checking it.

Right now it’s a wholesale unit and that’s what the dealer would really be giving you for it (maybe) as trade-in although with the fluff assorted with car sales they make you think they’re offering you a lot more.

Unfortunately, your situation is not that rare.

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Only two choices, fix it as reasonably as possible and drive on or trade it for the best deal you can get as is and wrap the existing loan together with the new one. Then pay as much as quickly as possible to dig out of the hole.

GeorgeSanJose gave you some good ideas. A dealer might take the balance of your loan and roll it into a new loan on a new car…It will be a big loan but at least you will have a car to drive…

Barring that, have an independent shop locate and install a used engine…Be warned, deals like this can get sideways real fast…

Some questions don’t have good answers because good questions were not asked early enough in the process. Like for instance, why was a newish BMW at a “wholesale dealer”.

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What if she simply stops payment on it? They’d come and take the problem away from her. Yes, her credit would be trashed…but that’s assuming it isn’t trashed already. The lender could seek civil remedy, but again, for all we know, she’s “judgment-proof.”

throw it off a cliff

Sort of an ingenious answer I think, but I’m not 100% certain she wants to do that.

There are lots of them sold this way in the northeast. I’ve had good luck with this in the past.

As someone who believes you have to live with your own problems and not pawn it off on someone else, if you are thinking of setting it on fire, parking it in a bad neighborhood or on a busy street, that would be insurance fraud. And as alluded to, letting it go back to the bank just means they can sell it and the difference will still be owed. They may or may not pursue it depending on the circumstances but they certainly can hound her for years and garnish her earnings forever.

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Nice thing about forums is that we can offer advice not even asked for. It is too late now but your ex-wife has real problems with a BMW ( used luxury vehicles can be money pits ) and apparently you also have problems with a BMW you bought the same way. Next time spend your money on something affordable new with warranty.

I think you need a second opinion about engine replacement cost, 10 grand is on the REALLY high side of the spectrum imhop (In my Humble Opinion).