There’s No Magic Solution to An Underwater Car Loan

Do you owe more money on your vehicle than what it’s worth?  There’s no magic solution to the problem. If you don’t beliee me, believe Jalopnik.

If you have a vehicle that you need to get rid of and you owe less than $5000 more than what it’s worth (wholesale), you might be able to finance the negative equity into a new caar loan.  Very important:  shop only for new cars if you are going to do this, and you might have to settle for a car that is in very low demand, the kind of car that you could get $5,000 off MSRP.  Last year, I would have said the primary contender would be the Chrysler 200 (but that car is discontinued now).  I don’t know what vehicle is rotting on dealer lots now.  The Chrysler 200 wasn’t really a BAD car, it just wasn’t as good as the competition.

DON’T ROLL A NEGATIVE BALANCE ON A PREVIOUS VEHICLE INTO ANOTHER USED VEHICLE LOAN.

If your finanical situation is really bad, and you are a wage earner, you can look at a Chapter 13 bankruptcy. In a chapter 13 bankruptcy, your car loan can be written down to the actual value of the car.  Chapter 13 bankruptcies aren’t free though, so there are a lot of factors to consider. This blog post is no substitute for bankruptcy advice from a bankruptcy lawyer.

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