Guess rolling negative equity depends on income, if you got the income to pay, but prefer payments you can do it, just a really terrible idea overall. Any of us here buying new as it is, is not a good investment, even if you pay in cash outright. Owing more than its worth and buying a more expensive one doesn't sound good, but if you make 100k-200k depending on local market living costs you could do it.

My salary was supposed to be around 25k I worked lots of overtime, earned 38k. Switched jobs, same story 38k was base salary, but overtime and pay increases/bonuses is closer to 70k. I took a huge gamble on a 49k truck. bought it for 39k, by time taxes extras added it was 44k. Got a loan for 39k...2.5 years later I have paid it off.

 

l think there's a lot of the population that don't have a clue about using money to make money. I guess that's understandable with banks pay sub 1% interest.

 

^^ that is the truth.

 

yep, a 7K savings account that pays .04 per month really rocks!

 

I, as well as many others, gave solid advice to the OP. If I remember correctly, the OP had a want, and not a need. Based on that, I think most would say its not smart; I would say that has been confirmed here. There are reasons why it is not a good decision, most of which have been mentioned. The 2 main ones are lending institutions Loan to Value, and GAP coverage. There are banks that will not loan over 100% of the vehicles value, and not all GAP contracts will cover all of the negative equity rolled into a loan. These 2 facts are behind the opinion I gave. No self-righteousness here.

The OP probably bought a vehicle at retail, and he is trying to sell it back to the lot at wholesale, hence the 17K. Someone here recommended he sell it outright to a private party. Smart. He would sell retail to retail, get more for it, and in my state, no taxes are paid by either party (don't know about his). I have financed 5K negative equity into a new vehicle about 20 years ago, and that was after I sold the old one myself. It wasn't smart, but it was a true necessity for me. I kept the vehicle, paid it off, and never ran afoul regarding an insurance loss.

Simply put, negative equity is a matter of financing more on a vehicle in relation to the value. If he can get it financed, and doesn't have any sort of insurance loss, he wins. Odds on that? I finance things, and I would never tell someone not to.

By the way, Dave Ramsey would have told him to sell the truck in the first place, as he believes everything should be bought with cash. He also would have the OP eating beans and rice if he had anything else financed. I wonder what he would say if he financed his biblically-mandated, annual tithing?

 

I can promise you Dave Ramsey will take your payment with any credit card you want to use.... as long as he gets paid, he doesn't care where it comes from.

 

 

I wasn't targeting anyone in particular with my comment, but I was speaking in general. Most advice that are given are extremely judgmental and self-righteous. People think that everyone should follow their example as they are the ones that got it altogether especially when it comes to finances. The fact is we can go into a recesstion or a major catastrophe can take over and most of us will be in the same boat.

There are banks, mostly credit unions, that'll do 125% of MSRP. Most of the banks and credit unions in my area does at least 120%. I have purchased several vehicles with GAP and all of them cover the entire negative equity. So negative equity is not as horrible as we make it out to be. Habitual trading in with negative equity is the culprit and that signifies a deeper problem.

I did ask the OP how he ever fell into $17k negative equity and i didn't see an answer. Regardless, the OP has to make the best decision for him and his family.

I believe Dave Ramsey is a marketing genius who knows how to sell his stuff. He doesn't know the Bible. The Bible doesn't mandate tithing for Christians. It is an OT command which is abused by the religious fanatics. I have been studying the Bible deeply for over 25 years now in formal and personal setting. So I know what I am talking about. He is a sensationalist, a great communicator, who knows which button to press to get people hooked. And of course he takes credit card payments as well. His business would be non-existent if he didn't. He gives good advise and it helps many. But his self righteousness with which he thinks he has got all the financial answers for everyone is a huge problem because everyone's situation is different .

 

People still keep their money in savings accounts? Odd.

EDIT: This thread is really getting entertaining. OP comes on a truck forum and asks for financial advice. Surprisingly, he actually gets some, but unfortunately it's a case of truth hurts. Not surprisingly, those delivering some rather sound advise are being looked at as arrogant, judgmental, pick you word.

TO BE CLEAR: I love people, but especially love people who make bad financial decisions like going too far in debt for material things. I'd be out of business without them. I see lots of credit reports and they all pretty much read the same right up to bankruptcy.
Signed: The Landlord.

 

The bold above is where you loose the 3000.
The red is where you loose 3100

So, my Trade was worth 25500, and I owed nothing on my trade. That is my 25,500 equity in the new truck, except I did add 1500 in cash. Credit is easy with an 802 score. And so is a super low interest rate. My investments are earning 9% more a year then I am paying in interest. So, I did not take any money out of investments for the truck. Yup it is smarter to buy used. I however do not want to worry about how it was treated or reliability. I drive 625 miles one way every 21 days to catch a helicopter off shore for work. I can not afford a break down and to miss my flight. I miss work, I miss a paycheck. If I miss my flight, I loose a week.

Also who pays MSRP? They will take a lot of money off the MSRP. I know I got over 8K off MSRP on my Platinum.

I sure didnt loose any on my trade. Paid 38,000 for it in 2006 new. In April of 17, 11 years later I got 25,500 for it. So cost me less then 1200 a year for that truck. Not bad. Seem to me, a good way to handle money.

I fully agree. When you can pay 1.49% interest on 30K, why take money out of an investment earning 11% for the past three years?

My truck the loan is just under 50% of MSRP, my trade was the down. Not taking money out when interest on the loan is way less then the return on my investment. I could pay the truck off today but it would be stupid. Same with my car. I owe less then 50% of its MSRP, my paid off trade was the 44K down payment. I could also pay it off today, but why I have a 0% interest loan on it.

If I lost my job today, I could pay both them off, and be debt free with the exception of my home. My Navy Retirement and my wife's Navy retirement will make the house note, and the utilities.