Upside down Negative Equity, possible to upgrade?

Yeah, I suppose you're probably right once I look at the numbers. He could shoot for 84, but I doubt he would find the truck for the price he would need it at (30-31k) in order to keep his payments the same. Of course...a used truck could be had in that range and is worth considering.

Yeah, he'd be getting even more in debt and starting it off even more upside down, but his monthly hit wouldn't be much worse. Plus, just because he's upside down doesn't mean he can't afford the payment.

Anywho, sound advice.

 

"Im upside down. Can I spend more money?" I can't believe you even asked the question.

 

In spite of what so many people seem you believe, the ability to afford a payment doesnt mean being able to afford the debt. With that mentality it's almost always the opposite.

 

Why? It makes more sense to wait for the '16s to come out, which will lower the price of 2nd gens.

 

Affording the payment isn't the problem. The problem is spending nearly $600 a month on a $27k vehicle that could have been bought for less. If he can't afford the payment and afford to save $2k on the side then he wouldn't be posting, methinks. He would pay his loan even and go broke again.

 

That was also on my mind...?

4X2, Prerunner, 2.7L does not equal 27K dollars. Maybe 23K paying MSRP.

 

See my post about price. 27k is sticker. I have the same truck as OP.

 

Trade for older 4x4? LOL

 

You made a decision, you gotta stick with it at this point. There is no point in taking a $2000+ loss when you have a functional vehicle.

 

Wow... I love me some creative financing. More bad decisions don't fix the current bad decision. If you needed more seats I might even de a little more sympathetic, but you are trying to buy it in 4x4? The stealership loves you guys and this is why when I try to play hardball they look at me and tell me someone else will pay more. Maybe you could get a 12 month same as cash charge card and put the difference on that?

 

We don't know what he can or can't afford. Being upside down on a car loan tells us nothing about his larger financial status. Maybe he paid too much to begin with? Maybe his financial standing has improved or worsened since signing his loan? Maybe he can afford to pay extra each month but isn't educated on how much that can benefit him so he chooses not to? Maybe his car loan is his only debt? Maybe it's added on to a mortgage and college loans? Who knows!

I agree though, truly living within your means requires looking beyond your monthly cash flow.

 

OP, I would not do it if I was you. The dealer will surely work with you and work out a deal that sounds good, but the reality is that you will just be further upside down. Unless you have cash for a good down payment to wipe out the current negative equity and have some left to bring down the new truck's price, I would just stick with what you have until you are in better shape. Try to either pay off on the current truck a little extra to get to break even quicker, or try to put a few dollars aside every month to build up a cash down payment. Then when you are at break even you trade straight up and put some money down on the new truck.
Good luck, I hope it work out for you.

 

hope we didn't scare to op away. A lot of us armed forces guys stepped in on this topic I think because we see this happen a lot. There is a lot of good advise on this forum coming from older more educated individuals. I believe what happens is younger folks finally have a steady paycheck with no other debt and then assume they can afford an expensive truck. I sure as hell thought the same thing but came to realize how stupid I was. I had a nicer truck than 90% of the senior enlisted and they make almost twice as much as me.

Hopefully the OP will inform us more on the situation so we have a better understanding. All of us are just guessing at this point.

 

If you base the purchase of a vehicle on the monthly payments alone, you will lose every time. I hated when I was on my search for a Tacoma and dealers wanted to ask me "how much can you afford to pay each month?". Its not about that. Its about how long will it take me to pay the thing off and will it be worth anything when I do.

Tacoma or not 84 month financing some of you are talking about is a ridiculous idea on any vehicle.

 

I disagree...If that mindset is good enough for our federal government, why not for a new truck? LoL

 

I was just throwing out an alternative that hadn't been mentioned. I don't even know for sure that you can get an 84 month loan from most lenders, but I have seen some willing to do it. Yeah, long term is daunting, but your monthly payment is lower and you can always pay it off early, but have the flexibility if an unforeseen expense arises one month and you're stretched thin.

Regardless, most people aren't concerned with how much their vehicle will be worth when it is paid off for a number of reasons. Firstly, it will never be paid off; they intend on trading in after a few years. Secondly, it's understood that it depreciates rapidly and is more of a requirement than an investment, as opposed to a house or land. The downside to a longer term is purely the interest you pay...which again can be negated by paying it off early.

Money comes and money goes, it's the nature of the beast. If you can afford the truck you need by paying cash, way to go. If you can afford the truck you need with a 36 month loan, go for it. If not, maybe a longer term is right for you. Is it worth getting in to it for something you "want" but don't "need?" That's for each individual to decide. My Tacoma is my first vehicle i've ever purchased and it was used. Why? Became a dad and needed a backseat for the carseat to ride safely. Otherwise i'd be chugging along in my ole Chevrolet because I wouldn't have "needed" a different vehicle. Why is it used? Because that's what I could afford.

 

I think the OP has left the building....

 

What's your APR at? Maybe try to refinance and reduce your monthly payments if your APR is high. Then start making double payments to reduce principle only.

 

I say just go buy the new truck. Get yourself in a mountain of debt and spend years crawling out of it, if ever. Like a heroin addict hitting rock bottom, it's the only way you'll learn.

 

Livin the american dream... on credit