While it rarely happens, sometimes you get that brand new car home from Hampton Mitsubishi and after driving it for a few months, you no longer love it as much as you once did. What are you options for getting out of a car loan? Hopefully you didn’t take out a Cincinnati Bad Credit Auto Loan on your now un-loved vehicle, but if you did, there are some extra things for you to consider. Life would be easiest if you could simply go back to Clinton Ford Dealers or wherever you purchased the vehicle from and trade it in for something else. We trade in clothes and shoes all the time at department stores, but then again, we probably didn’t take out a $30,000 loan for those clothes or shoes!
If you haven’t had the car for at least three years, then you are probably upside-down in your loan. This means that you still owe more on your car loan than your car is actually worth. This is because cars quickly depreciate in value over the first three years of ownership and you are usually making payments that are higher percentages of interest compared to the amount of principal.
The best thing to do is keep paying on your current vehicle loan until you are no longer upside down. You can find out this information by determining what the wholesale value of your vehicle is and compare it to the amount you still owe on the loan. However, if you absolutely have to get rid of your current car and need something else, there are a few options. You will come out with the least damage if you can arrange to privately sell your vehicle. You get more value here than using it as a trade-in. Another option is buying a used vehicle. When you go to get your “new” car, consider something as old as the one you have now, if not a year or so older. This lower price will help absorb some of the loss you are about to roll over into your new loan.
