Here’s one option, but I don’t know if banks/credit unions do this: could you finance a loan on your Mazda in the amount needed to get out from under the BMW? It’s not much different that trading in both, I know, but it keeps the Mazda in your hands and out of the hands of the dealer, where they’ll make money on that part of the deal.
How much do you owe on the BMW?
Nothing. Dealerships are out to rip you off, especially if you “need the money right now.” And even if you don’t tell them that, they’ll figure it out when you come to them wanting to trade in a BMW and a Mazda on something cheap.
They’ll work the numbers so that you end up with maybe 25 grand out of both cars, while selling you something that’s worth 20 grand for 23 grand, and try to make it sound like they’re doing you a favor.
Go to Edmunds.com and look up the “True Market Value” they give the trade in value, private sale, and retail sale values as well. I doubt you will get anything near the KBB values you posted as trade in values for the cars from a dealer. You are going to take massive depreciation hits on both cars since they are only 2 and 3 years old.
Sell the beemer privately first. See how much you get and where you stand financially. You might have to sell the Mazda 3 privately too. Then you need to buy an older used car and make sure to budget for some repairs that an older car will invariably need.
What APR did you finance the BMW at, and have you looked into refinancing it at your local bank or credit union for less? Might be worth looking into.
The other thing as other have mentioned might be to sell the BMW, and take a loan out on the Mazda for the difference, and that way, you can be clear of the big payment, and just have a smaller one to deal with. Then you go about paying off that loan as quickly as you possibly can.
BC.
I agree with you that is a question that really needs an answer. A few grand can be worked around; being 10 grand upside down is an entirely different matter.
yeah. i believe we will be closer to 10 grand in the hole. hence the reason trading the mazda becomes an idea.
do you think a bank would give us a loan against the mazda to cover 10 grand when the car is probably only worth 10-13 grand!?
BMW:
owe about 34,000. worth at best 20-30k. insurance = almost 2,000/yr.
APR= 1%
Mazda, we pay about $60/month insurance.
how did this happen? we bought our first home. and i recently lost my job. so we only have one income.
30-34k
ha. it was a car sales man.
so what is a situation that is acceptable!? car payments were not a problem when i had a job and we were not paying a mortgage. now, it is an obvious place that needs to be cut in the budget.
we owe close to 35k on th bmw. worth maybe 30. insurance almost 2k/yr. it needs to go.
mazda= 600/yr. period.
thoughts!?
great website. thank you.
does anyone know anymore about this!? is it only for leased cars!? this sounds helpful.
Ouch. I’d go along with Bladecutter’s advice. Pray a lot while trying to sell the BMW and put a note on the Mazda for the deficiency.
The big fly in the ointment is going to be what someone will actually hand over for the BMW.
You’re ten grand deep and that’s assuming someone will actually buy the car and cough up average retail. Maybe you will get lucky and get that one buyer who wants it no matter what.
(Some years ago I worked for a dealer who hired a utility man to take care of cars on the lot. This guy had been left 10 acres of prime real estate on the blacktop north of Little Rock, AR in the will of a deceased relative. Someone owned an 8 year old Chevy Impala that he developed a fascination for and he talked (didn’t take much either) the car owner into trading the Chevy for land. What a deal for the new owner of the real estate! Just an example of the right buyer at the right time.)
Several folks have recommended ‘sell the BMW’ - but how does that work? They don’t have the title - the lienholder does, right? They’d need the cash in hand to pay off the rest of the loan to transfer title.
Loan take-overs are entirely up to the lender. They have to approve the financial ability of the person wishing to take over the loan. The other route is that you will guarantee the loan to the new buyer, but if he/she defaults, it’s still your bill…I’m sure that’s not what you want.
It makes a lot of sense for a house with a good interest rate, far less for a car. Normally it’s pretty easy for anyone with a job and somewhat OK credit to get a loan through a credit union or bank, especially if they’re established at said institution.
It may take a couple weeks, but sell it yourself, pay off the loan if you can.
I actually dislike the “note on the Mazda” thought. That in and of itself will push you back into full coverage insurance, and that saving will dwindle. If you own your house, you could try to get a loan against that, but that also comes with some serious risks.
Financial difficulties are never pretty, and the results can be disastrous. You need to get to a financial adviser, and figure this out. While this forum may have seemed like a great first step, it really wasn’t.
There are organizations around that will help you free of charge. I think I read you’re out of work (can’t see all the posts at the moment). The unemployment center has resources you can use to tap into some financial guidance. If you’re like me, you’d rather not work than ask for unemployment, but I did use their services for information. It’s a resource that’s provided free to you by the state.
I hope this is helpful. I wish I’d heard this years ago when I was suffering.
Chase
They would have to square this up with the lienholder first and hopefully they’re on solid footing with the lienholder credit wise. Being in a jam does not necessarily mean delinquent on the payments.
Hopefully the lienholder would accept their creditworthiness and the Mazda as collateral on the difference.
Of course if the dealer, or dealers if more than one, handled the financing then the water can be muddied up even more.
Here in OK a car owner has the title in hand, lien or no lien. The sticky part is if a car is sold, the lienholder is not paid, and the new owner cannot remove that lien.
To be honest, I don’t see a way out of this one without some at least moderately serious pain being involved. Ten grand, and possibly more, is a tough row to hoe. Very tough.
An option might be to sell both cars and, hopefully, get enough to pay the entire note off. With a clean slate one could then find some wheels that are a bit more manageable financially.
Trading it in won’t change the fact that you have negative equity in the BMW. You can’t borrow your way to prosperity.
They’d have to sell the Mazda first and hope that would give them enough to coover the difference. The bank won’t clear the lein unless they’re able to do so. Risky.
Like you said earlier, a few grand is workable, but the bank is unlikely to let them get an unsecured personal loan for ten large. And it doesn’t sound like the Mazda would cover it as collateral. Ten large is going to be tough to cover.