[truegreen100]

When I got my Volt (Gen 1) in November 2013, gas prices were high, and it "seemed" like a no-brainer - buy a Volt. Now, though, over 3 years later, I do have a low-mileage Volt, but it's not worth a lot.

In fact, I owe $18K on it, but KBB says my expected trade-in range is $9,535 to $11,306 and Edmunds says the range is $8,883 to $11,163. These are "trade into dealer" prices. As you can see, I'm, at best, about $7K underwater, and, at worst, $10K underwater on this car!

Even with extending the length of the loan just a little bit, I'm still paying over $500 a month on this car - and that's with a slight reduction of the interest rate. I've GOT to do something to decrease my family's expenses. I just can't figure out what to do.

I was laid off back in January 2012 from my last permanent job. The contract job I had when I bought my Gen 1 Volt paid really well, but then oil prices went down and I lost that job. I've had two other jobs - one for 4 months and one for two months. Now, I'm doing help desk work on a 1099 for just $1K a month.

Though it pains me to get rid of this car, it pains me more to see our debt rise because of it. Certainly I can't be the only one with this problem. Does anyone have any suggestions on what I can do about this situation?

 

[Steverino]

Only in hindsight: don't buy new cars unless you can pay cash. In fact, don't buy new, buy a 2-3 year old car for cash and save YUGE. Don't take on debt. None of this helps with the current situation, except as a learning experience.

I don't know the rest of your situation but you could sell the car, take the loan hit and walk or ride a bike. Of course you have to come up with $8k which equals 16 months car payments. Maybe you'll have a new, higher paying job by then? Move to lower cost housing. Don't dine out. Cancel cable if you haven't already. Shed expenses. Sorry, that's all I have. I'm sure others will chime in with better ideas.

 

[caronjeff]

Credit unions are doing car loans at 2 1/4% you could refi and 1/2 the payment.

 

[bentbiker]

Truegreen100, you may be upside down on your loan but you are ignoring the $7500 tax credit that you presumably took.

 

[Qinsp]

Uber or Lyft driving to pay the bills?

 

[Just_Jon]

Credit unions are doing car loans at 2 1/4% you could refi and 1/2 the payment.

Assuming the credit union would do it (doubtful given his income and loan-to-value ratio), he would need to refi for 6 more years to cut it in half.

Truegreen100, you may be upside down on your loan but you are ignoring the $7500 tax credit that you presumably took.

I assume he either didn't get it or it has long been spent elsewhere.

This should be a case study in what NOT to do financing-wise. $36K loan for 84 months?!?!?
I have sympathy for the O.P.'s current situation, but daaaaammmmnnnn.

 

[llninja]

Credit unions are doing car loans at 2 1/4% you could refi and 1/2 the payment.

No matter what the difference between the old interest rate and the new, there's no way to cut the payment in half without increasing the term. I'm with steverino, borrowing money to buy a car is stupid. If you don't have the cash you cannot afford it. Despite the OPs good paying job, this is a prime example of what happens when you buy everything on payments. You are leveraged up the wazoo and any bump in the road then puts you in great peril. The other thing, why after 4 years does the OP still owe $18K on the car? I suspect they paid too much for it. I got my new 2013 after the great $5K price drop for $21K, far below the $44k MSRP. Had I paid anywhere near MSRP minus tax credit, that would have really hurt.

I've been through two high paying job losses in 5 years, but luckily I was able to land on my feet. Not having a car payment made this possible. Plus going to an interview confident and not desperate goes a long way towards landing that next job. Interviewers can smell desperation and negativity a mile away.

To the OP. Don't trade the car in with a dealer. They underpay for the car then overcharge for the next one so they have you coming and going. . Check KBB prices for selling it on your own, you will get more than a dealer trade in.

The flip side, you could also work everynodd job possible and work like a maniac and just pay the car off. If you love it that much make it your primary goal (after food, shelter, and utilities).

Other life advice, figure out what you really want to do in life, what steps you need to get there, and work your butt off to do it. Meanwhile, take any job you can find to put food on the table, and work to replace it with a better job.

Don't ever go into a restaurant unless you are working there. On my most recent job scare, as soon as I knew the company was moving, I clamped down to the PB&J diet and no budget for anything extraneous. When the company closed the doors to this branch office, I had a warchest of cash plus a severance by just not spending except for essentials And even after getting a new job (not as high paying, but still very comfortable), I remained on this minimal expense lifestyle to try to get rid of all of my debts, including the mortgage. I cut what I owed almost in half in the process.

You can do this and come out stronger at the end. Hang in there fighting.

 

[VoltenRock]

Truegreen100, you may be upside down on your loan but you are ignoring the $7500 tax credit that you presumably took.

Critical point. IF I had taken my 7500 and put it directly into paying down my loan, I would have almost 3K in equity. As it stands, I'm also upside down but don't mind because I made a choice to do something else. Either way, makes the Volt a great deal--IF you do this.

 

[accelerus]

There's no magical thing to fix it, you are 7K underwater, and that won't go away no matter how you trade/sell/borrow/etc. It's going to be a painful lesson but you gotta just keep powering through and work towards paying it off.

What's your interest rate now? The credit union I have my volt financed through gave me 1.9%

I'm not as hardcore about it as some here, but when buying a car I put at least 1/3 to 1/2 down due to the massive instant and first year depreciation. I know lots of people can't do this but it's something you have to work/plan/save for.

If paying the bills is really that much of an issue, one step you could take (it's a bit drastic but it would give you a bit more breathing room) Sell/trade in the car and go buy something *cheap* and mostly reliable for $7k, not sure if the bank or dealership would let you roll the negative equity into the new loan, but you would come out owing $14k instead of $18k, and monthly payment would be lower, yes the car won't be nearly as nice or as efficient, but it's a step towards zero balance. I'm not really an advocate of rolling negative equity into a new loan at all, but if it means surviving and lowering overall debt.

 

[KenC]

When I got my Volt (Gen 1) in November 2013, gas prices were high, and it "seemed" like a no-brainer - buy a Volt. Now, though, over 3 years later, I do have a low-mileage Volt, but it's not worth a lot.

In fact, I owe $18K on it, but KBB says my expected trade-in range is $9,535 to $11,306 and Edmunds says the range is $8,883 to $11,163. These are "trade into dealer" prices. As you can see, I'm, at best, about $7K underwater, and, at worst, $10K underwater on this car!

Even with extending the length of the loan just a little bit, I'm still paying over $500 a month on this car - and that's with a slight reduction of the interest rate. I've GOT to do something to decrease my family's expenses. I just can't figure out what to do.

I was laid off back in January 2012 from my last permanent job. The contract job I had when I bought my Gen 1 Volt paid really well, but then oil prices went down and I lost that job. I've had two other jobs - one for 4 months and one for two months. Now, I'm doing help desk work on a 1099 for just $1K a month.

Though it pains me to get rid of this car, it pains me more to see our debt rise because of it. Certainly I can't be the only one with this problem. Does anyone have any suggestions on what I can do about this situation?

You live in Houston, the oil/nat gas biz is bouncing back. Can you work one of those jobs, they pay a lot more than $1k a month.

 

[llninja]

If paying the bills is really that much of an issue, one step you could take (it's a bit drastic but it would give you a bit more breathing room) Sell/trade in the car and go buy something *cheap* and mostly reliable for $7k, not sure if the bank or dealership would let you roll the negative equity into the new loan, but you would come out owing $14k instead of $18k, and monthly payment would be lower, yes the car won't be nearly as nice or as efficient, but it's a step towards zero balance. I'm not really an advocate of rolling negative equity into a new loan at all, but if it means surviving and lowering overall debt.

I don't agree with this. Trading $18k of debt for $14k doesn't help this situation much. If you are going to go through the pain of selling the car and getting rid of negative equity, then sell the car, gat a loan for the negative equity, then buy a $1000 beate, just enough to get around. As soon as the work picks up sell the Beater and trade up. Repeat until you can get back into a newer car. 418k to $14k doesn't move the needle much. $18k to $8k, now that's gazelle intensity. That smacks the debt down.

 

[ItsNotAboutTheMoney]

Figure out how much you're currently paying in interest on the loan
Figure out how much you can _really_* afford to pay each month on the loan
If you can afford to pay the interest and a bit more call the loan company and see if they will accept reduced payments. It's not in their financial interest to repo your car as long as you pay interest and beat the depreciation.

If you can't afford the interest, you might need a debt assistance organization to intercede on your behalf.

If you have any other debt, again, talking to a debt assistance organization might be the thing you need to do.

And obviously, try to lower expenses and improve household income and focus on using the extra income to eliminate your debt. There are multiple ways to reduce debt and raising income is the best option.

Expensive lesson learned, I guess. I wish you success.

* Really.

 

[firehawk72]

When I got my Volt (Gen 1) in November 2013, gas prices were high, and it "seemed" like a no-brainer - buy a Volt. Now, though, over 3 years later, I do have a low-mileage Volt, but it's not worth a lot.

In fact, I owe $18K on it, but KBB says my expected trade-in range is $9,535 to $11,306 and Edmunds says the range is $8,883 to $11,163. These are "trade into dealer" prices. As you can see, I'm, at best, about $7K underwater, and, at worst, $10K underwater on this car!

Even with extending the length of the loan just a little bit, I'm still paying over $500 a month on this car - and that's with a slight reduction of the interest rate. I've GOT to do something to decrease my family's expenses. I just can't figure out what to do.

I was laid off back in January 2012 from my last permanent job. The contract job I had when I bought my Gen 1 Volt paid really well, but then oil prices went down and I lost that job. I've had two other jobs - one for 4 months and one for two months. Now, I'm doing help desk work on a 1099 for just $1K a month.

Though it pains me to get rid of this car, it pains me more to see our debt rise because of it. Certainly I can't be the only one with this problem. Does anyone have any suggestions on what I can do about this situation?

First, to really help, I would need a lot more info. Is your income the only income? What are your total expenses? Do you have any cash reserves? Kids, Spouse...Too little info to really give any solid advice here. Without spilling your guts, I would suggest this.

Start by listing every expense you have. This is NOT JUST "I owe X amount a month" this is every expense including insurance, property taxes, birthdays, Christmas, food, utilities, you name it, write it down.

Then write down your total income from any and all sources-hopefully, it is not just your own.

Look at any and all savings, including 401ks if available...

Then start doing some real math.

Once you have done this IN GREAT DETAIL then you can start making an informed decision.

 

[jbakerjonathan]

All of the postings have been well-meaning and filled with good advice. If you plan to sell the car, post it on Craig’s List with pictures and use the proceeds to pay down the loan. In my case, I owned a 2002 Prius that I wanted to trade in toward a 2010 Prius. The dealer would not offer more than $2,500, which I refused to take. I posted on Craig’s List and was able to sell the 8 year old car with 132,000 miles for $6,000 within a few weeks. I used the average of the three easily available on-line evaluation tools, Edmund’s, KBB and NADA, to come up with the $6,000 price. I'm not the kind of guy that enjoys selling anything, but I did it. Good luck to you.

 

[Mcgsp]

First talk to your lender and see if you can renegotiate the terms for the car both interest payments and time on the loan to make it easier on your budget. If successful this will give breathing room till a more permanent employment situation takes place or you sell the car at price your comfortable with.

Be up front with your finances with them. They don't want to take a large bath on the car if repossessed nor do you want to take a huge loss on the car.

As for refinancing the loan with another lender that seems more problematic not impossible but problematic considering the employment situation that you outlined. Good Luck

 

[Bacardi]

I'll start with this, what if there is no "easy" way out? What if the only way is the hard way, which is to reduce expenses elsewhere and/or obtain more income to pay this off?

Let's go over the elephant in the room, Repo...Involuntary repo in which you stop paying is generally worse because you get a 30 day late, 60 day late, 90 day late and a repo on your credit report and you usually incur extra fees and extra interest...Voluntary repo you means you do avoid the late dings, still get the repo ding and generally don't get hit with as much interest or fees as involuntary...Yet that's only the first step, actually having the lender repo the car...Next the lender will send your car through a WHOLESALE auction and expect it to sell for many thousands below trade in value...Might only be $6000...Then the lender sends you a bill for the difference $15K-$6000 = $9000 + all associated fees and interest on those fees, my best guess is if you repo, you will be sent a bill for at least $10K...Because it's a high debt, 99% chance you'll be sued if you ignore it...Now you have a court visit, zero chance to win, a judgment against and if you don't pay future court visits and wage garnishment...Obviously repo is a terrible option, in fact many who have gone through the process who later had no choice but to file for bankruptcy have stated they wish they had just filed for bankruptcy in the first place, that's how bad it is...With that out of the way what can you do?

What I do not know is if you ALREADY have another vehicle, desire another vehicle or just want to get rid of the Volt and have zero vehicle...All scenarios are very different...If you say you have another vehicle already or do not desire purchasing another vehicle you simply must just try to sell the vehicle for high as you can and find a way to pay off the balance...Private party generally offers the highest sales prices but the Volt does not have a lot of demand, you would need to look at autotrader/cars.com to determine what you could get...

If you do desire getting another car, there's a little ray of hope but it's not super attractive...Get the cheapest car you can tolerate...Nissan Versa, Chevy Spark, etc...Roll as much of the negative equity into the loan as you can...Best case scenario if you get incentives, haggle down the sales price and get low interest, maybe you could get away with a $100/mo lower payment but you will need to bring by my guess $5K-$6K to the table...Obviously not the most attractive yet insurance and DMV fees do go down...

Otherwise, I would join a budgeting forum and layout your expenses there and perhaps they can find a way for you to reduce your expenses...This is a Volt forum, I believe you posted here in the hopes there was some "out" of your loan; there isn't, when anyone loans someone money they expect to get paid and do everything in their power to ensure they get paid...Your same scenario happens all the time...

 

[saltsman]

I think you need to separate the idea that the debt and car are connected. The debt isn't going away even if the car does.

There are only three ways out of debt.
1) Cash in existing assets (sell vehicle, garage sale, etc).
2) Make more (extra job, higher paying job).
2) Reduce monthly expenses.

Houston has a dysfunctional public transportation system and urban sprawl like no other city on earth. Some kind of vehicle is required.

You already own a low milage Gen 1 Volt that is inexpensive to drive and extremely reliable. I can't see how you can get anything as good for the $10K it's currently worth. You might be able to find a beater car for $5K, but the cost to repair and increased operating expenses will likely eat into that $5K you "saved" really soon.

Assuming you have no other assets to sell, then living extra frugally or getting another job is about the only option.

Cutting cable and beer can save some cash for a lot of folks (and you should still do it anyway). The easiest way I see is additional work.

There are tons of jobs in Houston... (with a low 4.8% unemployment rate too). It doesn't take long to pay out $7K when every penny goes to debt reduction. For example: The median annual Security Guard salary in Houston, TX is $29,820. You would be out of dept in just 8 weeks working that as an extra job at night.

A LVN nurses makes $43,170 changing bedpans and sheets and comes with health insurance. Texas has a 70,000(!) nurse shortage. That's a lot better than your current job and grantees a future no matter what the economy does. Most hospitals pay $5K to $10K signing bonuses as well.

Nursing not for you, be a welder. Welders helpers in Houston-Sugar Land-Baytown start at $40K. If you can do 6G, pipeline welders are making $4,000 to $6,000 a week and are in extremely high demand.

 

[1LeeMartin1]

Uber or Lyft driving to pay the bills?

VOLT DOES NOT QUALIFY FOR UBER??????????????????

 

[llninja]

I think you need to separate the idea that the debt and car are connected. The debt isn't going away even if the car does.

There are only three ways out of debt.
1) Cash in existing assets (sell vehicle, garage sale, etc).
2) Make more (extra job, higher paying job).
2) Reduce monthly expenses.

1....2....the other 2....you must have meant 3.

I agree, and it's,going to take all 3 to get out of this mess. But for #1, only cash in liquid assets. Do not touch your retirement savings unless you are over 59 and a half and can avoid the tax penalties. That gets tattooed at 10% plus your income tax rate. So for many that is like borrowing at 35% interest - that would be stupid.

I would add a 3B. Pay off debt to avoid compounding interest working against you. As for separating cars from the formula, usually the biggest debts are cars, credit cards, student loan debt, and houses. Car are bad because they depreciate so quickly. Credit cards usually have horrible interest rates and fees.

 

[firehawk72]

Without knowing the OP's "whole" situation, bouncing around ideas are fairly pointless. If the OP decided to open up about his TOTAL financial situation, advising would be easy as we would know where he currently stands. As it is though, we are throwing darts without knowing where the target even is. OP, if you are listening, and don't want to open up on a board like this, I totally understand. You would get bombarded with different ideas anyway and probably wouldn't know which way to turn. Take a few bucks (I know money is tight) and read Dave Ramsey's Total Money Make Over and avoid these types of situations going forward. Most of us have all been down at some point or another. Learn from it, improve, and move on. You may have more options than you realize; you may have very few too. Each situation is unique. I should have been a financial counselor/advisor

I don't agree with everything Dave Ramsey teaches, but you really can't hurt yourself by following his advice either.

You can probably listen to most if not all of this book simply by going to youtube.