Negative Equity
Senior Member
Joined: Sep 2017
Posts: 376
Likes: 117
From: TN
So what is the real difference here between what he owns now and what he wants to own? He already has a vehicle with $17k negative equity. The issue is he wants another vehicle and will simply be transferring that negative equity to the new vehicle. If he gets a great year end deal on an '18 he might end up closer to even (say a $65k MSRP for $50k). The fact that his new lender is willing to roll an existing loan into his new loan so that the loan to value ratio is negative really is immaterial.
If he can afford his current payment, and if he can afford the new payment, I don't see an issue. Option one he has $17k negative on an auto loan driving a car he doesn't want. Option 2 he has (probably under) $17k negative equity on a vehicle that he wants to drive. Only real difference financially is the higher payment and if he can find a lender willing to loan him the money.
If he can afford his current payment, and if he can afford the new payment, I don't see an issue. Option one he has $17k negative on an auto loan driving a car he doesn't want. Option 2 he has (probably under) $17k negative equity on a vehicle that he wants to drive. Only real difference financially is the higher payment and if he can find a lender willing to loan him the money.
Again, we don't walk in any one else's shoes and to each his own. In a perfect world, a sane financial advisor would tell you to never buy a new vehicle and always drive 15yr old clunkers into the ground bc they are depreciating assets. But that's not the world we live in.
Last edited by butcher73; Oct 18, 2018 at 08:14 PM.
Anything above a base XL is more want than need, and new vs used even more so. Those who maintain credit scores above 845 are offered fairly long term 0% loans which changes everything. Why on earth would I put any money down on anything when I can get a 0% loan? Point being that there can be good reasons to owe more than your truck is worth, but then again most in a position to have multiple options tend to also be those not asking financial advice on a truck forum. Just sayin. IMO: You should never borrow for a vehicle unless you could also pay cash, but borrowing makes more financial sense. If you ever HAVE to borrow for transportation then you need to seek professional financial advice as soon as possible.
5 Year Member
Joined: Mar 2012
Posts: 204
Likes: 19
From: Waunakee, WI
I would never roll negative equity into a vehicle purchase. Ever! If you have negative equity, you can’t afford a new vehicle. And why would you roll negative equity into a limited? You should be looking at an XL or STX if you are set on rolling negative equity into a new purchase. And that doesn’t even make sense. You should be buying used. Like 15year old used.
I would never roll negative equity into a vehicle purchase. Ever! If you have negative equity, you can’t afford a new vehicle. And why would you roll negative equity into a limited? You should be looking at an XL or STX if you are set on rolling negative equity into a new purchase. And that doesn’t even make sense. You should be buying used. Like 15year old used.
“if you have negative equity, you can’t afford a new vehicle”
wut
Member
Joined: Dec 2017
Posts: 246
Likes: 24
OP, I am $11k negative BUT before I ever roll that over to a new or used truck, I'll double or triple pay it down if I have to. My situation is:
either sell the truck and secure a loan for the difference, and lose the truck, OR
keep the truck, make double/triple payments until equity evens out, THEN sell it for no loss
or just keep it for the long run
since I need it for moving and for business some, I'll be keeping it & paying down as fast as I can but it taught me to always be able to walk away from the deal, period. Looking back, it was a horrible financial decision to trade in my '15 because it added another 24k in debt, plus with the "deal," saddled me with -11/12k. lesson learned though.
either sell the truck and secure a loan for the difference, and lose the truck, OR
keep the truck, make double/triple payments until equity evens out, THEN sell it for no loss
or just keep it for the long run
since I need it for moving and for business some, I'll be keeping it & paying down as fast as I can but it taught me to always be able to walk away from the deal, period. Looking back, it was a horrible financial decision to trade in my '15 because it added another 24k in debt, plus with the "deal," saddled me with -11/12k. lesson learned though.
Senior Member
Joined: Sep 2016
Posts: 172
Likes: 20
From: West Coast
Thats ok, we all have wants...BUT no way you want to roll over that much money. Try to pay it down for a year or so then reevaluate. Double up or triple your monthly payment if you can afford to.
Member
Joined: Jul 2018
Posts: 31
Likes: 6
Mike
Senior Member
Joined: Nov 2017
Posts: 1,771
Likes: 559
So what is the real difference here between what he owns now and what he wants to own? He already has a vehicle with $17k negative equity. The issue is he wants another vehicle and will simply be transferring that negative equity to the new vehicle. If he gets a great year end deal on an '18 he might end up closer to even (say a $65k MSRP for $50k). The fact that his new lender is willing to roll an existing loan into his new loan so that the loan to value ratio is negative really is immaterial.
If he can afford his current payment, and if he can afford the new payment, I don't see an issue. Option one he has $17k negative on an auto loan driving a car he doesn't want. Option 2 he has (probably under) $17k negative equity on a vehicle that he wants to drive. Only real difference financially is the higher payment and if he can find a lender willing to loan him the money.
If he can afford his current payment, and if he can afford the new payment, I don't see an issue. Option one he has $17k negative on an auto loan driving a car he doesn't want. Option 2 he has (probably under) $17k negative equity on a vehicle that he wants to drive. Only real difference financially is the higher payment and if he can find a lender willing to loan him the money.