Changing vehicles while still paying one off

[JKosprey]

This could go here or "Kitchen Table"...mods feel free to move it if need be...

I have a somewhat eclectic vehicle history-

My first vehicle was a used Jeep Cherokee that my folks bought for my neighbor as a HS graduation present. I drove that from 2006-2009 with minimal issues. I replaced it with a 2002 Ford Ranger, both for personal pride reasons(Parents bought my car), and for the fact that I wanted to learn stick.

I gave the truck to my parents when I got back from Iraq and realized I was going to be commuting to college....the pickup was getting about 16 MPG and it just wasn't working for me. I bought myself a nearly new(2010, 24K) Subaru Outback. At the time, it seemed like a good choice-both of my previous vehicles had 4WD and high ground clearance that I never used. The Subaru offered good MPG with reasonable handling in bad weather or on a dirt road.

Little did I realize just how much dirt road time my degree program would involve. I spend a good amount of time on dirty, bumpy roads in the middle of nowhere, and the Subaru isn't full capable. I'm beating on it every day. I had one (Very stupid) accident on my part which damaged the rear fender last fall, and that one issue has snowballed. I want to repair the issue but I am seriously considereing scrapping the Subaru and buying a Jeep or a Toyota Tacoma. I'll take a hit on gas MPG, but wont beat on my vehicle as hard. Thing is, I owe about 12K on the suby. Is there a way to deal with this without eating an insane amount of money?

[Yogimus]

Sell it to someone for what you owe on it. Either way, you are going to bite the bullet on this one. (sans insurance fraud)

[JKosprey]

Yogi,

You recommend I try a private sale where the buyer assumed the lien on the title?

I do expect some hit on this. I'm just hoping not to get raped.

[Yogimus]

Speaking from PCS experience here, so I don't know how the real world works, but here we go:

A mutually beneficial private transaction might help, where you take the payments from someone who bought a truck but doesn't want it, and he takes over payments on your vehicle. You just have to make sure the lien holders are OK with it.

[JKosprey]

Thing is, I owe about 12K on the suby. Is there a way to deal with this without eating an insane amount of money?

Short answer?

Not really.

You're going to get spanked one way or another.

The simplest to get out from under the loan, is to make whatever repairs are needed, then go buy another newer used vehicle, and negotiate hard on the tradein.

The good news is that interest rates are great right now, and new car sales in most sectors are slumped; which has led to much higher prices on good used cars.

That means higher tradein values, helping you get out from under the previous loan without being underwater.

The bad news of course, is that your new vehicle will also be more expensive; but will most likely be purchasable at a lower interest rate than your older vehicle (presuming you've maintained or improved your credit).

Unless you have enough cash on hand to pay off your previous loan, that's pretty much the only GOOD plan.

If you're underwater on your previous loan, you MAY be able to get the difference rolled over into the new vehicle, but be prepared to pay a higher interest rate, and a MUCH higher down payment.

No-matter how good your credit is, these days, you won't be able to get over 100% book financed on a vehicle; so after you've negotiated your sale price and your tradein, however much you are left underwater is added to the amount of the loan, and you'll need to put down enough to bring the total loan amount under 100% book on the new vehicle if you have excellent credit; under 95% if you have less than excellent credit, under 90% if you have mediocre, or under 80% if you have poor credit (if they'll do it at all).

Chris, I planned on making repairs...they seem somewhat inexpensive, I just want them to stop. My mental plan was to buy another slightly used vehicle rather than a brand new one. I'm cool with the idea of higher payments. I only fought for longer payments in the interest of building credit. I imagine I have improved my credit, ahead of payments with pretty much no income aside from a minimum wage tutoring job and my GI bill payment.

I could potentially pay off my loan. I have a bit in a CD account which hasn't been touched. I'd rather not use it much at this point, but if I have to, I'd rather spend it now than on regular payments for repairs later on. I wont share pernsonal financial info on Facebook, but if it would help I'd be willing to share in a PM

[JKosprey]

For the moment I have 20x in a CD and 12x in savings, plus a bit in checking. Roughly 12K on the loan left. I plan on seeing a dealer in the next month with the hope that I can trade. Not sure if that makes a difference, either in interpretation or how much I'm gonna be boned. Lesson learned is never to buy another fragile vehicle.

[Yogimus]

If you have a month, throw an add in the paper for a sale. Nothing to lose, if you have the time.

[Netpackrat]

Lesson learned is never to buy another fragile vehicle.

Subarus are not particularly fragile; they are practically the Alaskan national car, which wouldn't be the case if they were fragile. They are just not a truck. And it sounds like you need a truck.