Best way to get out of this car loan?
I have a loan on a 95 BMW M3 w/170k miles on it. It is a beautiful car in very good condition ( although the mileage is high.), but the monthly payment just doesn't make sense for me. I took out .5k for the car 1.5 years ago (actually k for the car and .5k for other bills, but the car is collateral). I owe right around k. My monthly payment is 0/mo. The interest rate is 8.8%. The car is worth around -9k tops. I just had to put 00 into it for a sticker, on top of my payment. Basically, as cool as the car is, I can't afford to pay 0/mo on a 14 year old car with no warranty that I don't even drive in the winter yet have to keep full coverage on because of the lein. I can't make up the -3k difference to pay it off if I sell it privately, so that's out. I've been behind in my payments now and dealing with collections at my credit union for the past 2-3 months. I have another car that is paid for now to use now thanks to my dad. I don't want to hurt my credit any more than I have, but I just know in my job situation that I can't afford this 0/mo payment anymore, not to mention the 0/mo in insurance as opposed to the /mo my other car will be.
I've thought of trading it in on another car, and rolling the difference into the new loan, but I just can't see that making sense,either. If I lease a new car, registration and insurance will be more expensive and the payments probably will be just as high or higher, although I will have a warranty. If I try for a cheaper used car, like -6k, I'm still without a warranty probably, and with the roll-over probably looking at owing a similar amount all over again, and not having as nice a car anyways and a higher interest rate I bet. Any ideas? (please, no sales pitches for online companies, just real advice,thanks)
Replay to Arold-the two cars you picked are both automatics. Almost nobody wants an automatic M3. They are like automatic Miatas, worth much less than the manual version. Not to mention those two are in rough shape with rust showing in places, and terrible,tacky mods in the second one.My car is rust-free,dent-free,up to date with history,and a genuine clean car.Why would you guess my car is worth less than those two piles? Please.
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Your credit may be in the gutter at this point. You won’t qualify for a lease. Leasing requires excellent credit to be cost effective. Since you are behind on payments, your car will more than likely get repo’ed. Which means you will lose out on all the equity you. What you should have done is to keep up with the payments and sell the car privately. Take the $3k hit. That’s not a lot of money compared to what you’ve done to your credit and the problems that come along with bad credit.
Now, the best course of action right now is to contact the bank and try to pay what you owe in back-payments and sell the car privately. Ask your folks to lend you the $3k you will probably owe after the sale of the M3 and pay them back slowly. Continue borrowing the car your dad has given you until you can get yourself back in shape financially.
Unfortunately, bad decision have great consequences. Bankruptcy will ruin you for years to come if you resort to that.
How long ago did you get the loan on the car/bill?? will your bank let you refinance the remaining balance to make your total payments cheaper so you can afford the payments at least until youi get it down enough to sell it privately??
I am in the same boat, we traded in a gas gussler for somting more fuel efficient, but we got ourselves upside down on the loan, i started making and extra $100.00 a month payment on it and it helped but now i had to stop to pay for other bills.
put as much as you can on the car, any extra will go toward principal and you out of the loan quicker.
hope this helps
You said your dad bought you a car that is paid for so you don’t need two cars right? Find a buyer for your BMW go to a bank and try to borrow the rest with a personal loan you should get $8-9k for the car and get a loan for the balance which should be much more manageable since it will only be a couple of thousand dollars. Take this loan money with the money from your car and pay off your BMW loan. This way your credit will not be hurt by the bank repossessing your car. If your credit is not good get a co signer for the loan. Or a personal loan from someone in your family.
You have one very serious problem you’re facing … the mileage on the M3. No dealer will take it in trade. You’ll have to sell it yourself and that will be difficult. Trying to assure someone that a car that’s 14 years old and nearing 200,000 miles will run fine is next to impossible. And if you do find somebody who’s interested, you can be sure you’ll get low-balled on the price. It will be a lot less than the $9000 you’re hoping for. So brace yourself for this.
The only out you may possibly have is selling both cars. Since you don’t owe anything on the second one, if it’s worth enough, you might be able to pay off your loan.
If not, cut corners everywhere, cut out all luxuries and non-essentials and do your best to get caught up again. Bring your account current. The very worst thing that can happen to you is a repo. That will kill your credit for 7 to 10 years. You’ll never finance anything while it’s on your record. And once it’s off, you have to rebuild your credit for awhile before anyone will approve you for a car loan.
a quick search found a car 2 years newer than yours that was sold for not even 5 grand. You can see it here
http://cgi.ebay.com/ebaymotors/Cars-Trucks___NO-RESERVE-1997-BMW-M3_W0QQitemZ260285503621QQddnZCarsQ20Q26Q20TrucksQQddiZ2282QQcmdZViewItem?hash=item260285503621&_trkparms=39%3A1%7C65%3A13%7C240%3A1318&_trksid=p4506.c0.m245
Now, that was a V quick search. I estimate your car to be worth a realistic 3.5 grand
So the advice here is to keep this into consideration when thinking of selling it. As you can see, 98 models aren’t even fetching 6k
http://cgi.ebay.com/ebaymotors/Cars-Trucks___Extremely-fast-sportscar-with-BMW-tightness_W0QQitemZ320297194294QQddnZCarsQ20Q26Q20TrucksQQddiZ2282QQcmdZViewItem?hash=item320297194294&_trkparms=39%3A1%7C65%3A13%7C240%3A1318&_trksid=p4506.c0.m245
just cut your losses and sell it for whatever you can get, the longer you wait, the less it is worth.