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Hello.
I have recently moved and have added rent and food expenses (was with the parents before). A year before moving, long before this oppertunity came up, I bought a used 2010 Toyota Corolla and am paying ! 350 a month with APR on 6.8% (high I know). At the time, a reliable car like this was much needed as I was commuting r/t 100 miles a day. Since the move, I've cut down the commute to about 20 miles r/t, but added in the expenses above. I no longer need the car, anad brought it to the Toyota dealership, which could only give me about $9K for the car. Right now I have about $16K left to pay on the car. I've put it up on Ebay and CL, but no bites. Called Toyota to see if they could help me, but I was told to look into a local bank or trade it in. I plan to look at my employer's credit union and have been in talks with a few dealerships to trade it in, but I'd still be paying $8,000 on the car even after the trade (which I guess I'll take it as a life lesson).
used 2010 Toyota Corolla and am paying 350 a month
I no longer need the car, and brought it to the Toyota dealership,
which could only give me about $9K for the car.
Right now I have about $16K left to pay on the car.
I've put it up on Ebay and CL, but no bites.
For how much? By that I mean... how much less than the $16,000 you owe?
If you got that amount... can you make up the difference?
I know someone who bought a 2008 for $10k this year. You don't have to buy that "new" to get reliability out of a Corolla! Look at current ads to see what people are selling them for now and then price accordingly.
The answer depends in part on what you plan to do if/when you ditch it. Get by without a car? Pull a couple thousand out of savings to buy a $2K beater? Finance a less expensive model at $8-10K?
If you're looking at one of the first two options, I'd look at local private party listings to see people are asking for similar models and list yours accordingly as myrc60 suggested. You'll get more selling it yourself to the new owner than you will get selling it to a dealership that needs to buy at wholesale so they can make a little money when they sell it. Just make sure to have funds available to cover the shortfall if you have to, whether it be cash or an unsecured note from the bank.
I wouldn't even consider the third option I mentioned. If you "trade down" you'll end up owing almost as much as you do now but for a lesser vehicle. Better to just suck it up and keep paying on what you've got.
Somebody mentioned a part-time job. This isn't a bad idea. You could give up your social life for a few months to make some extra money to put toward the car note. This might not be something that you'd want to sustain for the duration of the loan, but if you pay extra for a few months you might be able to refinance it and get a more manageable monthly payment without extending the repayment period.
Ouch. How on earth do you still owe $16,000 on a used Corolla you bought a year ago? How much did you pay for it?
There doesn't seem to be much you can do. The APR isn't that bad, it's more that you paid more for a used Corolla than a brand-new one costs. If you just don't need a car at all, cut your losses. If you still need a car, tough it out. Part-time job might be a good idea. Refinancing isn't going to make a difference. No one is going to refinance a car for $16,000 that's only worth around $10-12k. I'm assuming with a 100 mile round-trip its got pretty high mileage which is part of why you're so upside down. And even if they would, going from 7% to 4% is only going to save $20 a month.
Ouch. How on earth do you still owe $16,000 on a used Corolla you bought a year ago? How much did you pay for it?
There doesn't seem to be much you can do. The APR isn't that bad, it's more that you paid more for a used Corolla than a brand-new one costs. If you just don't need a car at all, cut your losses. If you still need a car, tough it out. Part-time job might be a good idea. Refinancing isn't going to make a difference. No one is going to refinance a car for $16,000 that's only worth around $10-12k. I'm assuming with a 100 mile round-trip its got pretty high mileage which is part of why you're so upside down. And even if they would, going from 7% to 4% is only going to save $20 a month.
No, new Corolla's start around 18k these days! The loaded models are even higher, of course! I think its ridiculous how expensive they've gotten. I bought a 98 new for $13k and it was the LE package too. It's almost as if they moved the model up a 1/2 class or something since 98; the cars are bigger today!
Yeah, but over a year ago means he's paid down around $3,000-$4,000, so he paid around $20k for it. That's MSRP on a well equipped brand-new loaded LE. Paying MSRP for a used car = ouch. I bought new for that reason. I needed something quickly after my car was totaled and the insurance settled so I wouldn't be stuck with the rental fee. After I decided the used market was over priced for economy cars, I pretty much decided on the Fit. And what do you know, there's a 2005 Honda Civic (this was '08) on the lot. Guess what they wanted for it? $15,000. For a three-year-old Civic with north of 100,000 miles. The brand-new '08 EX models were, before even negotiating price at all, were in the low $17-range after the factory $1500 cash back.
Your best bet would be to refinance at the lowest interest rate possible. Do the research and make some calls, you should be able to beat 6.8% and lower your payment. Selling a vehicle at a loss and buying another is a losing proposition. Buying a beater and ending up putting money into maintenance (tires, brakes, battery) may be a bad choice. At least you will have reliable transportation for many years to come with minimal maintenance costs on the low mileage Corolla.
Your best bet would be to refinance at the lowest interest rate possible. Do the research and make some calls, you should be able to beat 6.8% and lower your payment. Selling a vehicle at a loss and buying another is a losing proposition. Buying a beater and ending up putting money into maintenance (tires, brakes, battery) may be a bad choice. At least you will have reliable transportation for many years to come with minimal maintenance costs on the low mileage Corolla.
We spent well under $2K on our 98 over the years outside of regular maintenance, brakes, tires, etc. It is for that reason I bought another one this year! You can't go wrong with that value so at least you got a good car out of the deal OP.
Refinance the car for the same term or longer. The best places are offering 1.49-2.99%. If you shoot for the middle and get 2.49%, your payment drops to $283.96 for 5 years. Auto loan calculator - Bankrate.com
There is a huge difference between retail value and trade-in. The bank will not value it at the 8k trade-in value for a loan. Retail value will be much higher. 16k is still too high for a 2010 Corolla though. Retail value is closer to $13-15k, depending on miles, condition, trim level, and region.
I refinanced my vehicle for 2.99% in the spring, but rates have dropped even lower in the last 6 months. My sister got ripped by the used car dealer and was financed for 7%, because she doesn't pay attention to interest rates. She refinanced for 2.49% from the local credit union, 2 months later. Credit unions are your best bet for the lowest rates. Each time, they used the retail value and not the trade-in value.
You can also shop around for new car insurance quotes online from Geico, State Farm, etc. The savings will not be that big, but every dollar counts.
It's great that you left your parent's home for a job opportunity, but the opportunity stinks. I would look for something better or get a 2nd job.
Last edited by move4ward; 12-05-2012 at 05:56 AM..
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