hi Folks -- I am on a mission to get out of debt. My latest plan of attack is to sell a call that I owe more than it is worth. Here are the details:
I owe $28K
I have an offer from someone to buy it for $22K
KBB says private party value is $24K
I have the money ($6K) to cover the spread but I don't know if it is stupid to pay that much to get rid of this debt?
I haven't really done this before and I've made mistakes so I am not really sure if I know what I am doing...?
Any advice from anyone on whether to take the deal or hope for someone else to come along and make a slightly better offer (and maybe save me $1k-$2k)?
Getting rid of this debt would bring me down to roughly $45K left to pay off by next summer/fall timeframe.
Any good thoughts?
Selling a Car with Negative Equity
August 29th, 2011 at 02:26 am
August 29th, 2011 at 10:08 am 1314612529
August 29th, 2011 at 12:11 pm 1314619884
August 29th, 2011 at 02:02 pm 1314626547
What is the year on the car you are selling. What is the value of car #2? Is car #2 paid-in-full?
It is suggested that your vehicle value not exceed 50% of annual household income, do your vehicles exceed this?
If your car debt/value is less than 50% I would keep the car and just plan to drive it into the ground (200K/20yr) unless you have another reason to want to sell it and just focus on paying extra on the loan. Between selling this car at a loss of 6K then buying another replacement car you are looking at 11K in debt and possibly a much less relible car.
Just be sure to tell us what you deside to do about the car.
August 29th, 2011 at 02:41 pm 1314628862
the debt we have is for 3 cars - the one in question, my husband's car and then a car we bought for my daughter as a gift (before we realized how stupid having all this car debt is). I guess we thought since we could afford the payments & the interest rates are 0%, we went ahead & did it.
All the car debt together is currently $28K, $30K and $15K = a staggering $73K. So YES, this is a little bit over the "50% of income" ratio by about $8K-$10K. We are on track to have the smaller $15K paid off by end of this year.
So if we took this offer now, we would only have the one $30K car to pay off next year (after the new year) and we could probably do it in 10 months or so.
If we keep this one, it would probably add another 10 months to the total payoff timeframe but we would have very reliable cars to drive for many years. Not so sure this is a 'good thing' considering how expensive the cars are. I know you could get reliable cars for less.
One bit of good news I got this morning is that I will probably be getting back about $2K after I cancel the extended warranty on the car. I did not represent that as part of the car deal so I could cancel that & get a refund in a couple weeks.
September 2nd, 2011 at 07:31 pm 1314991902
Jerry