Quote:
Originally Posted by olddog
Good financial tips for someone to consider is not a bad thing...
It is generally a bad idea to be upside down in a car loan. You buy it brand new and your likely going to take a 20% drop in value the first year. If you didn't put 20% down, you will owe more than it is worth.
Let's use easy numbers. Say you pay $100K and finance it all. One year later a drunken slug totals it for you. His insurance says it is worth $80K and hands you a check. You still owe $95K. Now that the car is worthless the bank wants $15K from you right now. No more payments, because the title no longer secures the loan. No bank will loan you $15K to pay off another loan. Now you are in a pickle.
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Always buy gap insurance with your auto loan. Pickle avoided! Hell, if someone wrecks your upside down loan, YOU WIN!
(and gap insurance is cheap)
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Adam
Fulfilling my lifelong dream to own a Cobra... MISSION ACCOMPLISHED!
MKIV FFR 347 cid, Levy T5, 3.55 3-link.
SOLD
Replaced by something with a Flat-6
