Upside Down

[InbetweenDreams]

Normally it is always always always a bad idea to trade in a car while being upside down in a loan.

Here's my problem, I pretty much was a dummy when I bought the Challenger, way too excited to get a Challenger and got into a bad deal. Bought way too much car and got nailed on extras they through in.

To make matters worse when I drove the car off the lot well it was towed the next day, the transmission blew up...seems to be a thing with Dodge and Chrysler... Anyway they did fix it and the transmission works fine but I don't have confidence in it and the service isn't the greatest and the urge to drive excessively fast it is probably a good idea to get rid of the car. I don't think it will be reliable in the long run and might end up getting me hurt, killed or put in jail.

So I've decided to look into getting another Prius. I had the Prius c before, good car, too small. Since gas prices are cheap they are selling a regular Prius about $5,000 below MSRP, which puts the one I'm looking at $21,463.

So here's where I sit with the Challenger. I'm making payments of $634.90 a month, fucking Christ right? I owe about $31,800 on the Challenger and on a trade in should get around $24,000, which leaves a good bit of negative equity. However, with the purchase of the Prius I still end up shaving off a bit from what I owe and still come about the same on payments but with a shorter loan term, so essentially I still pay off the new car the same time I would have with the Challenger.

Your thoughts... My intent is to keep the Prius indefinitely. My sister has had very good luck with her 2007 and consumers agree... Aside from the Honda CRV, Prius owners hang on to theirs for a long time.

Does this sound like a reasonable plan? I know what I will and won't take for the Challenger, same with interest and so forth.

Generally speaking I would say rolling over a loan is a bad idea, but I'm pretty sure if I stick to the Challenger I'll be stuck trying to fix a car out of pocket... They're not known for their reliability, warranty isn't good for as long as what Toyota offers, on and on.

[InbetweenDreams]

More specifically here's what I'm looking at. My car is worth somewhere $22,500 (below what I will accept) to $24,850... So I'm expecting something around $23,500, if they offer me less than $23,000 I walk, simply as that and wait until next year most likely.

New car is $21,463
Destination is $895 (estimated)
Tag is $45
Sales Tax (3.0%) is $672.09
Registration is $40

Total new car is $23,115
Unpaid Car Loan is $31,879.03 adjusted for this Saturday
Trade-in is $23,000 minimum, $23,500 expected, $24,000 preferred

Leaves a negative equity of $8,419

New car loan will be $31,494 and basing that on a higher than expected interest rate of 6% with 60 months brings my payment down slightly to $608.87 using all those figures. I can make the payment lower by going with a 72 month loan but I think aiming to pay it off sooner is best with having more flexibility to refinance later on, make principal payments and so on.

The whole mess started in 2009. I had a real gas hog, Mercury Grand Marquis and gas was $4.79 and then they had the cash for clunkers program and ended up trading in a clunker for a shit box Pontiac G3... I almost had it paid off and it was also worn out, was pretty much done at 101,000 miles. Had to trade that in for the Prius c. Again, the Prius c was fine, didn't have anything major, did have to take it back for warranty work once but beyond that it was fine, just a very small vehicle that was missing some "essentials." Then I left a very stressful job and for whatever reason I decided I needed to go buy a sports car and ended up with the Challenger. I did that while in the midst of changing jobs, bad idea, especially not knowing how much I will be bringing home and not being used to being paid once a month. Now I have made it work, but I still have a bad taste in my mouth with everything that went on with it and well the wow factor is gone too. It's fun to drive but expensive in everything else. I could have bought 2 sets of tires for the Prius.

I mean I pretty much have my mind made up. I will hopefully be able to pull it off, unless they offer me crap for the car which isn't happening, not desperate, just unhappy and I'd bet on a Prius lasting longer 5-6 years over the Challenger any day.

[Darius]

My guess is that you will be disappointed by what they offer you.
Also, a common mistake people make is to look at the monthly payment and say "I can afford that".

If you are determined to get rid of the Chrysler, why do you have to buy new? Why not buy one that is a year or two old and the depreciation fell on someone else? There must be a lot of used Priuses out there at a good price.

[Camfer]

How long do you have left to pay on the existing car? Can you spend $10-15K on a replacement vehicle instead of $23K? Do you really need to buy another new car? Can you run this kind of deal and acquire a used car?

[InbetweenDreams]

I did consider a used Prius, seems that a lot of them that are being sold have pretty high mileage...and a lesser warranty...

I have to buy a new car right now, no. So I am considering to not do anything right now, but it will be a long time before I ever break even on the Challenger and likewise if I proceed with this deal.

The only thing I might accomplish is possibly getting a car this is more reliable and maybe, if the deal works out owe maybe $2,000 less in the total amount financed and be able to pay the balance off at the same time I would have if were to keep the Challenger. Otherwise it is a silly idea for the most part.

I do think the transmission isn't quite right in the Challenger, it is a new transmission but it doesn't drive like the RT I test drove.

What can I say I am a bit of a sucker but it does seem it doesn't appear to be as bad of a deal. I really think that I will be able to hold on to the Prius for the long haul...

I plan on going this weekend and see what they offer and go from there. I do realize I will have more negative equity, but I don't plan on trading in again, I'll simply have to keep it.

[jimcrackcorn]

In your situation,,, your gonna be upside-down either way you go....

A new car loan will mean another 6 years before you can get out of the upside-down scenario.

If you keep the Challenger for another two years, you should be able to sell it for what you owe on it - provided you keep it in good condition...... This would be the best thing to do in my opinion......

My hubby bought a quad-cap a few years back,, and the transmission stopped working the first year we had it... So I know what you mean about the reliability problems with this manufacturer (smile)..

Good luck,
Jimerooo

[LJay]

[MENTION=23180]axle2152[/MENTION], I am a Honda freak. Am presently driving a 2001 Honda CRV and liking it very much. Why not look at a used Honda Civic? It may not satisfy your sporty wishes but they have a great reputation and can get reasonable gas mileage. Maintain it well and you may be driving it well after the Challenger is paid off. You should also be able to get a deal a good bit under $20,000.

[Camfer]

I recently bought a 18-month old truck from a private party. It was $43K new. 18 months and 23,000 miles later I got it for $25k. So it depreciated $1000 a month. I can afford new, but I prefer used. I save up and pay cash. I like to keep a vehicle for 10 - 20 years. I have other priorities than expensive new cars.

My Advice: use credit to buy appreciating assets. Use cash to buy depreciating assets. If you have to delay a purchase because you don't have the cash, then be honest with yourself if you really need it or can wait. 150,000 miles on the right modern vehicle is no big deal.

5 years from now that new Prius will be obsolete due to advances in assisted driving technology. I'm going to bet that you're not someone to keep a car forever.

The modest monthly difference in loan payments seems irrelevant. Getting out of debt earlier is worthwhile if that is possible. It seems like the bigger issue is that you now realize you bought the wrong car for you. You might have to live with your existing car for a few more years.

If the dealer makes you an offer and doesn't give you a few days to think about it, then that is just a pressure tactic to close the sale. There are car buying services now, and you can get quotes from competing dealers right over the internet. You can do most of the legwork from home. If you walk uninformed into a dealership, you just made yourself a target for paying too much for more vehicle than you need.

[InbetweenDreams]

[MENTION=11919]jimcrackcorn[/MENTION] Yeah mine blew up at 134 miles on the odometer, literally the day after.... I should have demanded my old car back and unwound the deal, but there's no laws allowing that, so they don't have to therefore they won't. During the two weeks without the car I learned that pretty much they aren't all that reliable, even one person posted pictures of his Challenger having caught fire due to some electrical short. There's all sorts of stuff about engines ticking and having engine work done at very low miles, very easy to find on their forums. I know Prius, or any vehicle for that matter, has their issues and the occasional lemon, but I don't come across that so much on Prius Chat, unless we're talking about a 2004 pirus or something that's pretty old.

If I can walk away with the Prius, shave a bit off the loan and the payment and be happy, I'll do it. So they still have to offer a reasonable amount for the Challenger and be able to offer financing. If they offer me less than $23k then I'll either have to talk them up or go home, that or they'll have to whip out a cash rebate on the Prius. Either way, I have set numbers on what I will take and won't take. Obviously the know anyone walking into a dealer with a car that's 1 year old either hates the car or there's something going on, I'm sure they'll bank on that.

As far as being upside down on the Prius, yeah going to be way upside down, for a lot longer but not for the entire time. Unless I put a lot of miles on it I should be alright but it would probably be sometime in 2019 before I hit the break even point...about where I stand with the Challenger if I opt for a 60 month term.

If it doesn't work out, can always look at next year. Definitely want to part ways before something else goes wrong, like the transmission I'm concerned about. It likes to buck when it's cold, never driven a car that behaved like that even when cold. Problem is that if I take it to the dealer and bitch about it they will give me the old there's nothing wrong with it...

[InbetweenDreams]

[MENTION=23180]axle2152[/MENTION], I am a Honda freak. Am presently driving a 2001 Honda CRV and liking it very much. Why not look at a used Honda Civic? It may not satisfy your sporty wishes but they have a great reputation and can get reasonable gas mileage. Maintain it well and you may be driving it well after the Challenger is paid off. You should also be able to get a deal a good bit under $20,000.

Honda CRV and the Prius lead in owner loyalty...1st and 2nd respectively. I think some 28% of owners hang on to them for 10 years...