Help! Upside down auto loan and junk engine?

atlanta donate junk cars

Depending on the make and size, you should be able to get a used engine from a junk yard and have some relatives install it. Then trade it in. I know it sounds silly, but, in good running condition, the car is worth more.

atlanta donate junk cars

Negative equity is exactly what you have. it is when the value of an asset used to secure a loan is less than the outstanding balance on the loan. you are in a pretty tricky situation. Buying a foreign car isnt a bad idea, but because they are seen as more reliable, they also are priced higher. another idea would just to buy a more reliable domestic. you could buy a more popular car like the grand prix, it has been car of the year in the past and it is fairly reliable. Domestic cars are more reliable the newer they get,and they are cheaper, although their resale value is a lot less. what i would seggest doing is buying another used car (ex: a 2004 grand prix) and negotiating a low price (due to the poor car market right now) from a GM dealer (because they now are offering employee price for everyone) and ignore questions about a trade in because if you tell them that right away they will use that to make sure they get that and you pay more. AFTER you negotiate the price mention the tradein, go to kelly blue book (kbb.com) find out what they should give you , and take no less money that kbb says. that way you will have a newer car and gotten rid of your old one for maybe a reasonable price.

atlanta donate junk cars

well, its worth less on trade than a private party sale. But, there are only 2 ways out of this

1) repair it, and drive it til the wheels fall off. You can get rebuilt or used engines cheap. I know I can get them at Pic-a-Part for $100 – then get a relative to install it.

2) trade it. Frankly, if I was going to trade it I might still put the engine in. $100 + 8 hours labor might make you a few extra bucks on trade.

The problem is that negative equity you have to deal with. It doesnt just disappear when you trade the car. You still owe the balance of your loan. If you owe $3600 more than the trade is worth, that $3600 would be added to the next loan.

So lets say the car is worth $3000, and you owe $6600. Lets say you are buying a $10,000 car. On trade, we give you $3000 allowance – making you owe $7,000 on the car. then we add the loan that is not paid off – $6600 – so now you owe 13,600 on a car worth 10,000 on, as you said, a beautiful day. before the ink dries, you are already $4000 buried.

You wont be able to get a 6000 car with this negative. Its a matter of loan amount vs. car value. A bank wont loan 150% of the car's value – especially on one so inexpensive.

typically, the only way to hide a large amount of negative equity is to get a much more expensive car, or a brand new car with strong rebates that can help erase that debt. So a car with a $5000 rebate would offset that negative amount.

Bottom line is, it will be near impossible to get a 'cheap' car, AND hide this much negative.

I say put the engine in it, drive it as long as you possibly can.

EDIT – the previous answerer is well off base. First off, the GM Employee pricing only extends to brand new cars in stock. There is no emplyee pricing dictated by GM on 5 yr old cars.

Second, dont try to be clever and hide the trade from your negotiations til the end. All you will end up doing is wasting everyone's time, including your own. Tell the peolpe up front what your situation is, so that they can help structure a deal that makes sense from the onset. Hiding the trade is in no way to your advantage. Why work out a deal that is impossible? Work out a deal with all the cards on the table so that no one is wasting anyone else's time.

atlanta donate junk cars

No dealer will take your car if it is not in good running condition. So trying to trade it in on a new car is probably not an option. The only option you have is to replace the engine. Look on EBay to get an idea of what re-built engines go for. You can probably get one for about $1000.

One thing you can research is look for new cars that offer large rebates, $3k-4k. You can use the rebate to pay down some of your loan and then put the remaining negative equity into the new loan.

Good luck.

atlanta donate junk cars

First of all, buying another car using negative equity is worse that the situation you're already in. Imports are no more reliable today than domestics though the asian vehicles are generally better designed and built. A foreign car does NOT retain equity — a Honda Accord may not drop in value as fast as a Dodge Neon but believe me, there are few things in this world that lose value like an automobile — which is why you need to pay it off as soon as possible. Have you considered replacing the engine with a used one? Usually they run about $500 – $850 for a decent one. Even if you spent 1500 bucks fixing your car and driving it for two more years you would still save money in the long run.