Tips on Buying Cars: 2006 altima upside down, home equity loan company, home equity loan

Question
QUESTION:  have a loan of 18,500 on a 2006 Nissan Alima. purchased with mot so good credit. intrest rate 11.75 72 mo. payment $445 ..CANT DO IT ANYMORE! I am single, dealer used creative financing to qualify me and within 30days i tried to give it back and no way was the repeat answer. I live in Arizona. Alone, have worked 2 jobs just for payment & ins. need out from under this the nissan dealer offered me trade value $9000,that does not get me out of loan i saw an identicle on their salelot for $17,000. I want a Smarcare or Nissan Versa, what can i do...I just need my car payments under$300! I am desperate


ANSWER: Caroled,

Unfortunately you are stuck unless you can trade out of the vehicle.  I would go to another dealership and see what they will give you for a trade in value.  Explain the situation and lets see what they say, then we can figure out what moves we need to take from there.

Thanks - Jb

---------- FOLLOW-UP ----------

QUESTION: pls consider the options i came up with..and advise feedback  I have been to 3 other brand dealerships. I have a perfect pay history up to now since 10/06.. I am beyond the wait n see point I need to know what is next logical thing i can try ..home equity loan? What leverage do I have to coerce dealer I am not stupid..?I amaware i must lose more further I owe 18.5  I could try to get loan pay dealer 3000 cash to ake car and payment. or get new loan buy car i want cash and do what with the car i still owe loan on?

Answer
Carole,

I understand your situation, and wish that I had another option for you.  Obviously you can take out a home equity loan if that is what you choose to do, but they outcome will be the same.  You will still be paying the same amount of money whether it be in the form of a payment to the home equity loan company and a new car payment, or a new car payment plus your negative equity.  Getting a $300 car payment with all of your negative equity is going to be very difficult.  Your payment on just the negative equity will be $200 a month if your roll that into the new car loan.  Furthermore the finance company will not loan an additional $9000 to $10,000 in negative equity on top of new vehicle in the price range you are looking at with the Smartcar or Nissan Versa.  You would almost be financing 2 times the original vehicle price, which most loan companies will not do even if you had a 800 credit score.  It is just to big of a risk for them.  As far as your other options, sure you could get a cash car and then do what with the Altima??  Let it repo?  I don't think that is a good idea and I would never advise anyone to make that move.  

Once again, I understand the situation that you are in, but there isn't an easy answer here.  There isn't anyway to get the payment that you want and still role that much negative equity into it.  The only way is to put the amount of money down that you have negative equity.  If you did that, where would you get the money??  If you take out a loan to get that kind of money, you are still making the same car payment if not more because you will have to pay for the loan that you took to get the cash to put down on the vehicle.  There just isn't an easy answer here.  I know that isn't what you want to hear, but I don't know whatelse to tell you .  You are stuck between a rock and hard place.  

Wish I could be of more assistance.

Thanks - jb