How can I get out of the negative equity in my car?
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- เผยแพร่เมื่อ 1 ก.พ. 2023
- As of this upload: 21,934 subscribers
How do I get out of negative equity in my car? In this video we cover the topic of being up side down in a car loan. Also known as flipped in your car, buried in you cars, or you car being under water.
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I like the little DaveB icon in the bottom right, very nice 👌
Click it to subscribe! I know you are already subscribed though 👍
Keep it and drive it until the wheels fall off. To many people think they have to keep up with the Jones with cars.
Dave. A honest salesperson like you is hard to find these days.
I always recommend to a client to lease a vehicle. Trade in your vehicle and let it eat up all that negative equity. Your payments will be higher for 18 months but you will be out of a 72 month loan and a terrible situation. Then when your lease is up you won’t have any negative equity because your car won’t depreciate and you can either lease again or just hop in another car in a better position.
Would the lease have to be a newer vehicle or could it be pre-owned?
According to many experts is better to buy than lease
Thats literally wasting money 💴
@@redreadyj8916 finance is wasting money ur paying for owner ship for 6-7 years. At least with a lease I’m paying 200-400 a month for 2024 don’t have worry about negative equity or anything.
Very valuable and practical advice Dave. It is impressive that you are giving your customers advice on what is best for them, instead of pushing them for that extra sale.
The biggest way to avoid negative equity was not to buy in the past year or so. There will be so many people under water once the prices go back to normal.
Yup, like me
They aren’t going back down
So true. You’re talking about me right now😅
You see, here is a major problem with this. I had to get a car during the pandemic when dealers where charging almost $10k market adjustment fees. Only KBB only goes off MSRP. Now I am almost $20k upside down on a car that, thanks to a pay cut at my job, I can barely afford. Originally I was going to push it to 3 years then refinance, now I don't know what to do other than to get a bargin lot special that can absorb the negative equity but put me where I should have been on the car payment to begin with.
What did you do?
Rule number 1. Don't trade in your car. Or at least, don't rely on just the dealer's offer. Try some of the internet buyers. Last couple of car moves, internet buyers have left dealers in the dust for offers.
Internet buyers like where? Which websites?
I really appreciate you, you made so much sense love it!
Good stuff! Getting ready to pick our Bolt EUV tomorrow-really looking forward to it!
Wow, very refreshingly honest video! Liked the stay in your car advice.
Thank you Dave for good advice. I have a terrible experience in a car dealer ship, First when we came into the showroom we just want to inquire a Nissan pathfinder 2023 but we are denied for all banks that they inquired and then sales guy suggest to us to take used car Infinity qx60 2020 and he told us that after 8 months we trade in for new pathfinder and "I believe" him. I fond out that the trade in value of the infinity qx60 are very low as of now. First of all I want a brand new car doesn't matter if sedan or SUV as long as it is brand new. Me and my wife go to another car dealer ship and we want to trade in the infinity we have a negative equity. As of now we have $39,000 owe to the bank and the trade in is $21,000 so we have $18,000 negative equity and what happen we are denied again to finance. We went to two of car dealer still we are denied. What is good advice can you share with me in this situation? Thank you
Thank you for explaining and not making this confusing!
Just stumbled upon this channel and I got to say, this is hands down the most authentic video I’ve seen on this subject. Keep up the good work man 🫡
Great video! Thanks for your honesty.
Went to a Kia dealership, the tried to get me into a niro🗑️ now only Minuites into your vid your telling me to just hold on to it👍🏽 thank you for the advice
Love your honesty about selling ! Most dealers if not all would not tell you this information about being under water or negative equity I have a mint condition 2018 and dealership in town always make offers to trade in for something new and better I can't see paying more then I'm paying for my mortgage just to keep up with the latest and greatest vehicle. Truck or suv.
VERY solid advice...I'd say this was the best video I've seen yet on this particular topic!
Very well done….I am a financial advisor and this topic comes up from time to time…but next time I will refer this video! Bravo
In some respects this is what happens when you pay over MSRP and have a long loan, it takes the customer out of the market. Bad for the customer and bad for the dealer. They won’t be back to purchase their next vehicle for 5 to 6 years.
Practical advice on an aspect of the car buying process I think many consumers don't think about or understand. The default of the "dealer is screwing me" is probably more of a poor buying position/decision. Keep up the great content!
Thank you so much for that information about negative equity cause I tried to surely trade in my car today and come to find out I have negative that it more is still owed on it than what the trade in price would've been and I'm in the upside down position like you said about that, I done had it for only about 2 years when there is a total of 63 months on it to pay it off, you're an honest salesperson, I wanna thank you for that great advice about negative equity, I sure wanted to get a new car today but it did not work out in my favor,
Great advice Dave, wish we lived closer I would totally do business with you for cars.
Great Advice. We bought a low milage dealer demo with Low apr on a loan. We had it for a 1 1/2 years and it had a major failure that could not be fixed. So we traded it in with upside down equity of $2000. We we bought a new car we recieved $2000 cash back and 0% rate. It is the the car we still own today 4 years later and now have positive equity. We decided with the today's market we will wait until it is paid off to start looking for a newer model and things settle down some...Another great Video Dave!!!
Extremely informative vblog Dave- Educating the perspective buyer about this topic is very useful and important Really appreciate the subject being explained. Thank you!
Dave; I am often amazed at the information and suggestions your provide. I have always made larger then required car payments. Hence my car loans have gotten paid off 1-2 years early. I have also never been upside down in a loan. My current new vehicle a 2023 Subaru Outback Touring XT, the out the door price was about $44K, of which I had a down payment of $38k. The subvented financing was 48 months at 2.9%, for a payment of $122/month. I pay between $200 and $250 each month. I find it interesting that amount due is shown as $0 due to the fact I am so far ahead. Keep those great videos coming.
That is the way to do it.
@@travelingfool9096 why wouldn't you pay cash or just write a check. That's what I do
Great video!
I learned that in the pre-purchase phase you should not overpay for the vehicle. Don't buy expensive dealer extras like extended service contracts, dealer installed options, etc. Put money down or better yet, pay cash for the vehicle. That way you're living well within your means and interest rates don't matter. If you can't pay cash then you can't afford the vehicle.
Post purchase keep the vehicle until it's paid for. Then save the monthly payments for yourself instead of blowing it on another vehicle.
"Put negative equity into a lease." Leasing is mathematically the most expensive way to rent a vehicle. Adding negative equity into a lease is amping up the most expensive option like it's on steroids. Utter financial madness.
"If you 'want' a new car every 3 years, then lease. You'll always have a payment." Translation - You'll always be giving your hard earned money to someone else and you'll always be broke.
Fantastic video!
I may be wrong but I'm sensing some sarcasm here
@@DaveBsellsChevy No sarcasm. I like all the options you put forth. But some options are better than others.
Here’s how you avoid negative equity
- don’t pay over Msrp
- don’t finance longer than 6 years
- don’t buy what you can’t afford
Just buy what you can afford in cash. Problem solved.
Hi Mr Dave I'm finally caught up on your videos and I love the Colorado videos I have one myself but it's an 08 LT model I love the new look for the 2023 Colorado
The easiest way of working your way out of negative equity on a car is to just be patient, and continue to pay down your existing car until you are equal. If you are seeking that new car feeling, then go get your car detailed by a professional. At the end, it will be like a new car. Spending $300-400 on a professional detail is a far better option then buying a new car when you are upside down. If you are in a situation where you need something bigger, assuming it's just for a short term period, then renting a car could be an option.
Well done! The only honest car salesman out there. Been following you for a while and excellent job with all the videos and advice
Thanks for the update.
Great advice for people, Dave; I hope they listen to you. I'm the CLO at a financial institution and so many people want to trade within a year or 2 of buying a vehicle and then have substantial negative equity. Unfortunately, there are subprime lenders out there who are willing to finance the new vehicle at very high LTVs and people end up in even worse shape.
We need more honest people like this
This was EXCELLENT advice !!!👍👍
Awesome advice Dave.
I have a 2014 Nissan Sentra. Buyout price is $23k. I’m currently $15k upside down. I was told the banks interest rate constantly fluctuates so the upside down price could go up or down. My car payment is $500/month. They’re also charging me $160/ month for temporary insurance while I have my own full coverage. It’s been 3 months they still won’t update my insurance. My transmission went out a year after I got the car and it’s $4k to repair so I’m making payments on that. Im young, no dad, have no clue about buying cars. I think I may need a lawyer cause I’m getting screwed.
This is really great dave I know it will be great to be out of negative equity it’s definitely not fun getting a CPO is definitely a way to go that is what my wife and I did with our 19 GMC terrain denali it was going to be a 660 or less but went to 700 cause of credit card payments and 760 for gap and warrenty best thing ever
Very wise words! Thank you
I never hear of this before ! Thanks for telling me! About time to get serious about paying for what you buy
Great advice Dave
Great information!
Wow. They are going to fire you for being that honest!
I also keep my car until it falls apart. My goal is to keep it as long as possible after the car loan was paid off.
I have a family member that is in love with getting new cars. She has constantly traded in and rolled negative equity over. She’s owned 8-10 cars this past year alone because she “wasn’t happy” with the one she bought. Countless times she had to be bailed out of a situation. I vowed to never do that
At some point she will go broke and her financial future will cease to exist. Have her look at the Ramsey Show. I suspect that she will not to watch.
Plus she’s paying taxes and doc fees on every car. 🤦♂️
Don't go to dealers that are selling over MSRP and gouging customers on useless junk on vehicles
Car payments in general are a bad idea, but if you have to finance for more than four years, that is a CLEAR indication that you can’t afford the vehicle. It’s a shame banks, dealers, and manufacturers even allow 6, 7, or 8 year loans. Leasing is an even worse option… the most expensive way to operate a vehicle.
And FWIW, $75k for a 2 year old GM vehicle with 20K+ miles? That’s insane! The fact that anyone thinks this is a hood or even fair price is ludicrous. No reason for that price on a used vehicle.
The demand exceeds the supply so the price is what the market will bear. Some dealers were selling (5) to (10) K over MSRP and were getting it. Remember what P.T. Barnum said.
Great video Dave .👍👍👍
Thanks 👍
Don't pay over msrp!
Don’t pay msrp. I want some of that dealer hold back.
In the current and recent car market, that is a little like saying don't overeat.
More like don’t get into overpriced car payments!
Impossible you’re always going to pay over msrp if not interest then it’s tax or gap
What about when the motor blows after 50k.
He paid over MSRP. TBH, any dealer that charged over during this time was really short sighted- customers that paid over will never come back. But then again, they fell pray to these dealers in the first place. In any event, dealers have worked so hard to gain trust over the last couple of decades now find themselves with that age old “car salesman” perception.
Great info T B can do more videos on how to buy a car I see you owning your dealership in in the future Tony B Chevrolet Too bad your not closer to meI would buy a car from you Love this Bow ties 👍🚙🇺🇸
Very informative ty
Thanks for the info! Pretty interesting idea with the lease. Turns out the teslas end up costing you just as much if not more than a V8 truck you’re just switching out the gas for the cost of electricity. I’m $15k negative equity on a model X, only one year in but got slapped with a $4k electric bill true up at the end of the year and that’s WITH me having solar.
Thank you!🙌🏽
I would not finance a car. Save up for four to five years and pay cash on something you can afford.
Problem is people like to send every dollar they make then use every bit of credit they have on charge cards then complain they can live on what they make.
So your advice is going in one ear and out the other
Thank you so much
Thank you so much. The video was so helpful. There is a number that I call for more advice
I’ve been leasing cars since the 1980’s and enjoyed having a new vehicle every 3 to 4 years. But you can have the same problem in a lease, as I’m sure you’re aware of. So I kept my vehicles and maybe with 2 or 3 months left on the lease I would start looking for a new one. I would think anyone who bought a vehicle in the last 2 years has got tons of negative equity. Paying 5, 6 or 7 thousand over asking price 9s just nuts. I think the dealers may pay a dear price for gouging people like that. Now that’s just my opinion and none of that is your fault, it’s the dealers. Have a good one and it looks like this shortage may be coming to an end and hope you have better results on your sales.
Most people go past the allowed mileage, so leasing with cost of capital another way of saying interest makes no sense
I got a new car in June. Then, my employment situation changed and I now drive a lot more. Sucks.
I paid 5k over sticker on a used Jeep truck a year ago in dealership add ons. I owe 51k and the most a dealer offered for trade in is 37k yet Kelly blue book says my trade in value is 40-42k. I just want an economical car with a lower payment. I didn’t know you could roll over negative equity into a lease. Is it possible to lease in my situation?
I have a 2014 Kia optima sx turbo and I'm halfway into the loan I'd love to keep it but I'm at 70k miles and it's starting to give me problems, also I've seen for my model year after 100k miles it goes down hill with engine failures, I feel like it's a ticking time bomb. The whole reason I got a car from the dealership was to not have to worry about big problems but it's happening anyway, so now I'm looking to trade it in for something reliable like a camry or accord
Thanks
I love my vehicle but I am paying way too much and desperately want to get into something with a lower payment, however I’m upside down in my loan! What do you recommend?
I’m in the same position. Paying too much a month for my car but want a lower payment. I’m also upside down on my loan. But he said that you can make extra payments towards your car loan. Anywhere from 20$-100$ or even more if your income allows you to do so. I’m going to take his advice and do that.
In my experience dealing with dealerships and trading in well over 15 cars some dealers are more aggressive then others. Some dealers will offer some crazy incentives and be in a position where they need to sell X amount of inventory in that month in order to receive manufacture perks and will offer thousands more for your trade just to meet a quota.
Yep
When I tell you I was at a car dealership. and they boosted up the price on the hyundai veloster. They didint tell me there was an after market exhaust I took it back cause my engine light was on then they had to end up getting back the car out me in a different one now im stuck with a Kia forte 2018 s that I still have to pay off 26 thousand dollars 😭😭😭😭
Dave can you talk more about allocations and how they work with your pending orders?
Right, always go to the dealer that has some of the car you want allocated. If the dealer doesn’t have any allocated, go to the next until you find one. If they don’t have any allocated you’ll probably never get one.
At the same time dealerships contribute to negative equity because people bring in their cars, dealerships always lowball them and roll more negative equity in the new loan but then they sell trade in on their lot for 5 to 10k more
Good video Dave. 👍
Thanks
Rolling the negative equity into a new lease would be good if they kept the terms of the lease - but won't they just adjust the selling price to include the negative equity? Therefore your lease payment won't be what's agreed, its agreed standard lease price plus prorate amount you owe,
I’m trying to get out of a 2021 Malibu RS with 26K miles on it, because I want a Bolt! Sadly I don’t qualify for any tax rebates. Im not upside down thankfully.
The best way to avoid upside down is put more money down and stay away from large my term financing such as 5 plus years.
Bravo! Very sound advice! I really like the ending where you told people to live within their means. I wish more people were living up to that premise.
So are you going to trade in the bolt for that new EV pickup? 🤔😱😂
Thanks for watching! I'll be keeping my Bolt forever as a daily. The Silverado EV would be a business move.. own it for a year making content then sell it to buy a C8 ERay and do the same thing.... at least that's my idea.
Dude that is not America. That is why we get loans to purchase things.
I have 100k value car for only a year but now I need something 15k will I still fall in the trap since I don’t want something new or expensive?
I can't believe you only have 22K followers.
Dave can you do a video on buying a car With bad credit tks
Thank you for all the Good info. I have a 2012 Mitsubishi Outlander Im 10k underwater! It is starting to slowly need repairs that I cant afford. I am not sure If I should keep repairing it or trade it?
You will be further upside down trading it in. Better just quickly pay it off and repairing it.
I got one for u! 2018 chevy equinox lt awd 1.5L gotta get my name off it due to divorce wanna trade in for a truck im 5k upside down as stated got to get my name off it bc of a divorce would a lease be a good option
Well that just proves my point. The person with the fancy car at the stoplight is broke. I work is Morris County, I know they are snickering at my 2012 Honda Fit with close to 200K.
Oh well, really been looking at the Bolt, with the milage I drive (100 a day), would charging it every day be an issue? From what I hear you should not always charge to 100% ?
The Suburban is nice, what engine does it have? Tow ratings? Might trade the Express 3500 with the 6.0 to tow the airstream trailer one day.
The Bolt is your Fit on steroids. Chevy will install a level 2 charger for free in your garage. You can drive it 200 miles a day, it’s good for 259 . Charging it to 80% will get you the miles you need. In 5 or 6 hours your ready for another day. With the state and federal rebates you can not go wrong.
Who cares? They have something they enjoy. 😂
I thought it was a bad idea to put money down when purchasing a depreciating asset. Is that not correct?
2008 was just houses this time it’s going to be a lot more. repo man is coming for a lot of people soon. Live within your means people 💩 is going to get crazy.
Love the Content Dave B ❤🔥
Dave, what are your thoughts on the push for expanded public transportation? Do you think our country would be better with improved walkability and public transport options. I know I do.
Wont really work anywhere other than big cities. Im 30 minutes outside NYC and could get no where without a vehicle.
Great advice and information
Thanks
Dave would it be possible to make a video about third party warranties?
Great Topic !
I’m upside now but I’m happy with my 2019 vehicle but I’m having a hard time trying to refinance because of year, miles, and price.
My credit is better now a year n half later and I’m trying to have a better DTI to increase my pre approval home loan. Any advice?
pay extra towards the principle of your car loan, refinancing your car will do nothing to help you DTI
Dave, you have earned a lot of respect for your honesty on this issue. Wish there were more car salesmen in this world like you!
Ditto that.
Great
Thx for getting straight to the point.
I bought my truck 2021. A 2019 Toyota Tundra at a little higher price than it was probably worth (that's when there was a chip problem in 2021). Paid 44k. Got a decent rate of 4%. In May, resale price (private seller) was around 39k to 43k. A month later, it was 37k to 39k. 3 weeks ago, it dropped to 26k to 29k. How does the resale price (in the best reselling vehicle on the market) drop by 15k, give or take in a matter of 5 months?
First you paid way overprice, then economy slow down with now high interest rate, which means all car price, home price goes down due to demand slowing way down.
Excellent advice.
Thanks for watching!
Don’t buy more car than you can afford, don’t take too long to pay off a car, don’t buy new cars so often.
I messed up and now im just trying to get rid of the payment without getting a new car. I dont the vechicle amymore
Alot of dealerships aren't helping, though, with "market adjustments" over MSRP and dealer add-ons, and that's before any additional warranties are added
yeah but now the table has turned and theres not many markups and trade values are tanking, as you can see in this video the guy was 10k under already...
@Cory exactly it's going to crater the used car market because people will be so upside don't nobody will want to trade as often as before
Curious, do you lock interest rates on preorders or is the rate based on the delivery date?
Based on delivery date
Pay your insurance in full and total it. Get the gap coverage as well. Works like a charm. Ask me how i know!
How would you total it?
I have a 10 year old car, I owe 9k value is 4k and it needs a $3500 repair. I looked at a 22 vw jetta, which puts me at 39k I don't want the lease option hoping to make this new car run for 10years. What to do?
Repair it. You don’t want to go into payment at $39k with current high interest. And why do you NEED a $39k VW?
I have a q50 2018 29k left 5 years with 51k miles I wanna get into a cheaper car with less payment and less gas charge I also have gap insurance I wonder if it will help
Gap I sure does not selling the car, it only helps when you total it and insurance gives you less money than what you owe. You are better off paying it off fast and keep the car with no payment. Gas is cheaper than car payment.
My current situation. They don't even want to roll over the difference into the new car. They want me to pay the equity as a down payment. The whole was to trade in, why would I pay the whole equity as a down payment. Example I owe 12k on my car, they giving me $5k so the want me to pay the whole $7k as a down payment. The last dealership I went to wanted half down($3500). I don't know what to do because I do Uber & can't use my car in a couple months & I gotta work. It's frustrating
Getting a car $13000 under msrp because of a discount but $6000 upside on my current car is it still a good idea to roll it over ????
There is a reason why the car is being discounted at $13k, nobody wants them because of reliability, being a gas hog or a high priced truck? Don’t do it, it is a trap.
Hey Dave B. is there any mark ^up^ by your store above MSRP on this white HigH Country suburban. ?!? BTW - The fixed running boards on this model make for a very unattractive side profile. It is quite frankly unacceptable that an SUV at this price point (ie; 75K) doesn't include RETRACTABLE running boards. Hope This Helps Yo ! 💰. 💰. 💰. 🔍. 🤔
No, we don't have markup on used vehicles.
@@DaveBsellsChevy Do your used vehicles sell above the MSRP for new?