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Auto Loan to Cover Negative Equity?

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  • Auto Loan to Cover Negative Equity?


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Answer #1 | 22/12 2013 14:15
No if they loan you more than the car is worth they don't have enough collateral for the loan. Think how stupid you would look paying 22K for a car worth 16K instead of keeping a car worth 10K it isn't like you need to spend that much on transportation when you are already so deep in debt it will take years to have zero net worth.
Answer #2 | 22/12 2013 14:21
You aren't getting more than the value of the car. You are now seeing why you need a good down payment AND why you never finance a car longer than 36 months! Expensive lesson learned hopefully!
Answer #3 | 22/12 2013 14:55
You are approved for a loan up to the $25K. The actual loan will be based on the purchase price/value of the vehicle. Some dealers willl help you bury your negative equity in the new deal -- increase the sale price, lower the trade in value ... not sure exactly how, but they play with the numbers. Problem is that you end up being even more upside down on the new loan. Don't string out the finance term more than four years (three would be better).
Answer #4 | 22/12 2013 16:12
If you owe more than what the vehicle is worth, it's the same as a personal loan with no equity.

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