What to do?
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From: Chicago
Originally Posted by ace123,Jul 14 2009, 08:10 PM
You put 58k miles on it in 28 months? That's half the problem there.
1) You have negative equity to deal with
2) Your car is getting to be a very high mileage vehicle
3) Any car you get will quickly be a very high mileage vehicle, and therefore it will depreciate much more rapidly than typical
On your idea of selling the S to getting a lower mileage Z or other $15k+ car, I would wonder if you'd just put a ton of miles on it and end up right where you are now in a few years.
Interest rates are low, 5-6% for a car, so interest is probably not the biggest issue. If you buy a car and put that many miles on it, you've probably depreciated more out of its value than you've lost on interest.
I'd be looking for a way to solve the mileage issue. My first though on a solution would be to get a cheap beater to put the big miles on and keep the S for weekends, grins, and in case the beater is down for repairs. If you look hard, I'd bet you could find an old saturn or buick with under 80k miles from an old lady for 2-3 grand and get quite a few years out of it with very little trouble. Sell it for a grand in a couple years when it has 150k miles and your S is paid off (or at least worth more than you owe). Then you've lost a LOT less money on vehicles and you'd no longer be upside down.
1) You have negative equity to deal with
2) Your car is getting to be a very high mileage vehicle
3) Any car you get will quickly be a very high mileage vehicle, and therefore it will depreciate much more rapidly than typical
On your idea of selling the S to getting a lower mileage Z or other $15k+ car, I would wonder if you'd just put a ton of miles on it and end up right where you are now in a few years.
Interest rates are low, 5-6% for a car, so interest is probably not the biggest issue. If you buy a car and put that many miles on it, you've probably depreciated more out of its value than you've lost on interest.
I'd be looking for a way to solve the mileage issue. My first though on a solution would be to get a cheap beater to put the big miles on and keep the S for weekends, grins, and in case the beater is down for repairs. If you look hard, I'd bet you could find an old saturn or buick with under 80k miles from an old lady for 2-3 grand and get quite a few years out of it with very little trouble. Sell it for a grand in a couple years when it has 150k miles and your S is paid off (or at least worth more than you owe). Then you've lost a LOT less money on vehicles and you'd no longer be upside down.
The only 2 changes I would make to the above advice is to find a Corolla or a Civic instead. A friend of mine recently picked up a new CR but wanted a beater for the winter. His original budget was $2,000. He ended up finding a very well kept high mileage (107K) 1997 Corolla w/ manual transmission for $2,500.
Of course, it's a very high mileage car, but a little research on the web and Consumer Reports will go a long way. When keeping a beater, you have to remember that the car needs to be easy/cheap to maintain in all aspects. Otherwise, you just end up spending a dump truck on fixing it...
The other change I would make is to unload the S2000. Sounds like you're stretching a bit to keep this car. $380 a month for a 170K miles car is outrageous. Consider many people pay that much for a NEW car.
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Joined: Jul 2008
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From: Miami, FL
Originally Posted by thomsbrain,Jul 15 2009, 11:27 AM
You got yourself into this mess by rolling negative equity into a used car worth more than the one you sold. Now you think you'll fix the problem by doing the exact same thing AGAIN? Yikes!
You are already upside down on your S2000 loan, and don't forget that the Z will come with taxes, etc, that will easily add another $1000 to the price. You'll be even more underwater when you buy the Z, and it seems that you don't try to pay off your loans quick or keep a lot of cash on hand or you wouldn't have let this happen.
The big problem you get yourself into with this is that even if you try to downgrade, you'll STILL have negative equity! If you trade in your S2000 for a $4000 used Civic, you'll probably get $8000 for the S2000 against a $12,000 loan. That means your new loan will be $8000 for a car worth half that much. Ouch! This is why its so bad to get yourself into that situation, because it is so hard to get out again. But if you don't have any cash, you don't have any other options. At least your payment will drop by 33%, and you can use the extra money to pay down the loan QUICKLY. Accept that you will be driving the beater around for a few years at least, and make it a point to pay off the loan COMPLETELY before you even THINK about buying another car. When the time comes to buy again, make sure you have a sizeable down payment and you can more than afford the payments so that you can pay the loan down fast.
Keep in mind that as long as you continue to drive around with negative equity and no cash reserves, you are one accident away from bankruptcy. Next time you take a blind corner in the S2000, remember that. Kinda sucks the fun out, huh?
I just want to point out, not to gloat or brag, but just for comparisons sake, that the payment on my S2000 is the same as yours and it only has 22,000 miles. That's why it's so important to not get into negative equity.
You are already upside down on your S2000 loan, and don't forget that the Z will come with taxes, etc, that will easily add another $1000 to the price. You'll be even more underwater when you buy the Z, and it seems that you don't try to pay off your loans quick or keep a lot of cash on hand or you wouldn't have let this happen.
The big problem you get yourself into with this is that even if you try to downgrade, you'll STILL have negative equity! If you trade in your S2000 for a $4000 used Civic, you'll probably get $8000 for the S2000 against a $12,000 loan. That means your new loan will be $8000 for a car worth half that much. Ouch! This is why its so bad to get yourself into that situation, because it is so hard to get out again. But if you don't have any cash, you don't have any other options. At least your payment will drop by 33%, and you can use the extra money to pay down the loan QUICKLY. Accept that you will be driving the beater around for a few years at least, and make it a point to pay off the loan COMPLETELY before you even THINK about buying another car. When the time comes to buy again, make sure you have a sizeable down payment and you can more than afford the payments so that you can pay the loan down fast.
Keep in mind that as long as you continue to drive around with negative equity and no cash reserves, you are one accident away from bankruptcy. Next time you take a blind corner in the S2000, remember that. Kinda sucks the fun out, huh?
I just want to point out, not to gloat or brag, but just for comparisons sake, that the payment on my S2000 is the same as yours and it only has 22,000 miles. That's why it's so important to not get into negative equity.
the absolute worst thing you can do is roll over negative equity into a new car loan. i say stick with the car for now and pay it off quickly. i know this will sound corny, but taking the time to properly create a monthly budget goes a LONG way in managing yourself and resolving your current situation
alot of the advice posted here is good so think about it. good luck!
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Originally Posted by sentravq,Jul 15 2009, 03:40 PM
Im in the same boat as you but i have an 05 S2k with 13,370miles and thinking about trading for a 2008 Nismo 350z in white with only 3,780 miles. They are asking $29K which i'm sure i can knock down a couple of $Ks. should i do it???
Advice to you is ......if you like the Z better than the S2k then make the trade. If not you still have a great car. I personally like the '09 Z so much more than the previous model I'd forget about the Nismo boy racer '08, come up with a few more $$$ and buy an '09.
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Originally Posted by sentravq,Jul 15 2009, 11:40 AM
Im in the same boat as you but i have an 05 S2k with 13,370miles and thinking about trading for a 2008 Nismo 350z in white with only 3,780 miles. They are asking $29K which i'm sure i can knock down a couple of $Ks. should i do it???
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From: Northern NJ
Thanks for the replies everyone. I completely understand the situation I'm in believe me lol, I'm in motorcycle sales and deal with people like me all the time. Some times I guess it's just hard to disconnect the emotion from it and just look at the hard numbers. I appreciate everyone's input though. I've decided I'll stick to my guns and hang on to the S. I've put a lot into the car aside from the purchase cost and plus not that it matters much but there is the sentimental quotient of it. The car has fresh(er) motor and differential in it so I think the major things are covered for now. I'm going to get a valve retainer check today just to make sure things are ok upstairs and that'll be it for now. I'm just going to pick up a beater for the winter when the time comes. I'd be happier paying off the 12000 on my S and enjoying my drive to work AM rather than to pay of 8000 on a civic I don't want. Thoughts?
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From: Northern NJ
Originally Posted by thomsbrain,Jul 15 2009, 03:27 PM
Keep in mind that as long as you continue to drive around with negative equity and no cash reserves, you are one accident away from bankruptcy. Next time you take a blind corner in the S2000, remember that. Kinda sucks the fun out, huh?
I just want to point out, not to gloat or brag, but just for comparisons sake, that the payment on my S2000 is the same as yours and it only has 22,000 miles. That's why it's so important to not get into negative equity.
