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Why would anyone do this😮


bigpoppa09
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The last post in this topic was posted 1807 days ago. 

 

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How do you get negative $52K in equity?

 

Rolling over multiple loans with the 'gotta have it now' mentality instead of actually paying a vehicle off.

 

I can only think of one occasion where I traded a vehicle against a new purchase, and that was nearly 30 years ago...and I was right-side up on the loan, so not only was the existing loan cleared, I got an addition $4K or so to put against the new vehicle (which had already been negotiated down to $11.3K with TTL included). I would have thought some of the bone-headed finance stuff ended after one of the car manufacturers did the no-down, zero interest and zero payments for a year and got badly burned (to nobody's surprise).

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How do you get negative $52K in equity?

 

 

Far too easily unfortunately. Little to nothing down or trade value. Luxury vehicle purchase (based on price not necessarily brand) and buying a new car annually will do it pretty quick. Most likely was upside down in a loan that started this snowball effect. Not just paying on this car and last one but two or three prior if they kept rolling over negative equity.

 

It is why I always advise to avoid car sales where they state "we will pay off your trade no matter what you owe" because it translates to paying on 2 cars (one you no longer have) when they roll over the negative equity to your new loan.

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I had a co-worker that traded in vehicles just about every year or less. He'd buy something, find fault with it/see something else that he had to have, and off he'd go to his "good buddy" - the new car sales manager to get the next great vehicle. After a few years, they told him that he had so much negative equity, the F/I manager refused to finance. He went to several other dealers and no one would either.

Last I heard, he filed bankruptcy.

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I can tell you right now, covering $52,000.00 of negative is not going to happen. The alleged vehicle would have to cost well over $100,000.00 for that amount of negative equity to come close to being carried. And, if that were the case, then that type transaction does not fit the usual profile for a buyer in that price range.

 

But that's just me, flying with a SWAG.

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Taking on huge amounts of debt for a car, which is just a depreciating liability, is beyond my comprehension. Besides high-interest rate credit card debt or payday loans, what kind of debt is worse? Heck, even gambling debt you can write-off on your taxes, and you might even win occasionally. Being tens of thousands of $$$ in negative equity on a car? Huh?!

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I had a fleet of hotshot trucks I traded or sold them at 350k miles BUT I kept MATICULIOUS maintenance records on all of my trucks.

My final truck was an 09 Chevy 2500 duramax with 322k purchase price was 36400 I sold it for 27300 in 2014. It was so clean you could eat off of the floors and seats.

I bought a Mack M7 tri axle dump truck in 2014 and everytime I brought the truck in for service the Mack dealership would offer me 15k above what I paid for it because of the condition it was in. I had it for 3 years and sold it to one of my drivers for 10k above what was owed.

 

Yes it is stupid to roll over negative equity of that amount into anything.

With a loan that big I can almost bet some financials were fudged a little bit.

 

As far as interest rate depends on who it was financed through and how IE personal vehicle loan or a commercial loan.

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