• 02-26-2010
    62kona
    need some financial advice
    Well just over 2 years ago I purchased my 05 Kia sorento used for 20K. It is everything I need in a car so I am happy with it for now. But, I still owe 15K on it, and it already has over 100K miles. I am just worried that I won't have it paid off before it hits 200K miles and needs too many repairs. I was thinking about trying to sell it and getting something older and much cheaper. Pay cash for it and work on paying off my loan. But I also need something very reliable because I drive a lot for work. Any advice would be appreciated. I know there are a lot of very knowledgeable people on this site. Thanks.
  • 02-26-2010
    62kona
    Just a few more thoughts: I know it is not worth anywhere near 15K right now so I will be taking a loss if and when I sell it. I would think about refinancing, but when the ecconomy slowed down my work was directly effected and I had trouble making a few of my payments on time last year. Never missed any, but I think 3 or 4 were over 15 days late. I just want to work my way out of bad debt and get on the right track.
  • 02-26-2010
    cobi
    Go to kbb.com and see what it's worth to sell/trade in. How much are your current payments and how many do you have left?

    I looked it up, not knowing what options yours has or if it is an EX or LX. I chose EX and minimal options and came up with around 7K for a private party sale. Yikes! not good if that's the case, that doesn't even cover 1/2 your loan. So, lets just say you sell it for 7k. You'll probably spend at least two of that to buy another vehicle? So maybe you pay off 5k of your loan leaving it around 10k for a vehicle you're not driving!

    Man, not sure what your best option is here. If it's fully insured, I'd consider leaving the keys in it whenever I parked it.
  • 02-26-2010
    DJ Giggity
    This is a tough one. Assuming you don't want to trash your credit you don't have many options. For starters, you most likely can't sell it as the bank probably holds the title. You would have to pay off your loan before they would release it. About the best you can do is try to dig yourself out of this hole as quickly as possible. Is there any way you can make extra payments on it? That at least is a bit more proactive than waiting till it dies and hoping you have paid the loan down by then. Whatever you do, don't roll the difference into a loan on another car. That will insure you are underwater for many more years.

    On the plus side, it sounds like an OK car for what you are using it for.
  • 02-26-2010
    cobi
    Quote:

    Originally Posted by DJ Giggity
    For starters, you most likely can't sell it as the bank probably holds the title. You would have to pay off your loan before they would release it.

    Good point, I didn't even think about that! Yeah, I doubt selling it is really an option.

    quick google search came up with advice on a similar situation:
    http://www.stretcher.com/stories/05/05feb28b.cfm
    http://forums.kiplinger.com/showthread.php?t=8501
  • 02-26-2010
    Econoline
    Quote:

    Originally Posted by 62kona
    Well just over 2 years ago I purchased my 05 Kia sorento used for 20K. It is everything I need in a car so I am happy with it for now. But, I still owe 15K on it, and it already has over 100K miles. I am just worried that I won't have it paid off before it hits 200K miles and needs too many repairs. I was thinking about trying to sell it and getting something older and much cheaper. Pay cash for it and work on paying off my loan. But I also need something very reliable because I drive a lot for work. Any advice would be appreciated. I know there are a lot of very knowledgeable people on this site. Thanks.

    Sounds like the terms of the loan almost guaranteed that you would get upside down on this deal. I'm kind of surprised you were able to borrow that much on it. Is this a personal loan or is it secured by the Kia?

    Unfortunately whether the car is sold, stolen, or totaled you are still responsible for the difference between the $15k and current market value of the car. That's why lenders offer "gap" insurance on cars.

    Your best bet is probably to keep the car running well and drive it for as long as possible. Hope that helps, there's no easy answer to this.
  • 02-27-2010
    62kona
    Thanks for all the replies. Well, at least its an LX with a lot of the options. But I didn't think of the fact that I probably cant sell it until its paid off either. I may be able to make extra payments, as long as work stays busy.
    I really learned a good lesson when I bought this car. I didn't have much of a down payment when I got it, I didn't negotiate at all for the price, and I didn't research the resale value at all. Those are all very important things that I unfortunately had to learn the hard way.
  • 02-27-2010
    RIS
    The least expensive car to buy is the one that you already own.
  • 02-27-2010
    62kona
    Ya RIS, I read some of your other replies and I think in my case that would be the best. Also, cobi, thanks for the links. They had some great info on them.
    When I first got my car i made some stupid decisions, and i really neglected routine maintenance on it and because of that, the engine has already been completely rebuilt. So, at least i've got an almost new engine at 100k miles. Maybe it will last until I can pay it off.
  • 02-28-2010
    NashBiker
    It's so easy to get in trouble with auto financing. When I had to replace my dead Sentra, I went to the local, well-established Toyota dealer with a great credit score and a %15 downpayment on an economy car. The salesman refused to give me an APR rate on the loan he wanted me to sign. He would only tell me what the monthly payment was. He said he couldn't tell me the interest rate without consulting the finance dept., and that they weren't allowed to be consulted until I signed a contract to buy the car. Rrrriiiight........ I walked out.

    I went home and reverse-engineered the math. He was trying to give me about 13% APR, during the height of the easy credit days! Jerk! (I got 5% down the street the next day on the same model.)

    Not knowing all the details, I would probably keep the Kia. It sounds like you may have a pretty high interest rate since you only have 5k paid off after two years.. So, anything extra you could pay to get the car paid off quicker would save you money. That's easier said than done, I know. If you can work on getting your credit score up, it should help you get better terms next time around. Hopefully your Kia will last long enough to get it paid off or close to it. I wish you all the best!
  • 03-01-2010
    canuckjgc
    Keep the Kia -- it has a new engine, and if it needs a new transmission, that's only $2500 or so. It should hit 200k no problem. Run the wheels off that puppy.

    For others reading this thread, you can avoid a lot of headaches by buying cars with cash -- never make payments. Life changes and that easy payment now can become an anchor on your finances and your life later.