Car repossession question

[bagofpucks]

They got talked into every little extra. So extended warranty, maintenance package, fancy wheels for the winter tires, 3M...the works. Of course, those items don’t hold any kind of value if you keep the vehicle for less than two years...haha. The biggest issue is it’s a domestic SUV. They completely drop like a rock in regards to depreciation.

[Derek Sutton]

Originally Posted by Ducay

Sorry, Im trying to do the math. How do you end up negative 12-14k equity on a 2019 SUV? Even a pricey domestic that has terrible value retention shouldn't be that far underwater unless you had some insane financing terms, like no payments for 2 years or something, or it was involved in an accident or had 200,000km on it.

Anyways, as an actual answer, I would suggest she talk with whoever the financing is with (Bank or the manufacturer financing company). I dont think I've ever seen financing through a dealer themselves (Aside from the shady used car places that are also loan sharks), so as long as it was a typical dealer they effectively have nothing to do with the financing once its off the lot.

Advantage there is you're likely dealing with a bank or manufacturer's credit company, and both of them have dealt with this situation plenty and should know the options and impacts.

Originally Posted by bagofpucks

They got talked into every little extra. So extended warranty, maintenance package, fancy wheels for the winter tires, 3M...the works. Of course, those items don’t hold any kind of value if you keep the vehicle for less than two years...haha. The biggest issue is it’s a domestic SUV. They completely drop like a rock in regards to depreciation.

Yah if that’s the case they likely haven’t even started making any payments toward the actual vehicle itself. Two years in average depreciation is 37%, 10-12k backwards is very common.

[81MC]

I know it’s their own fault, but I feel really bad for people like that. It should be illegal to finance a loss on another loss, but those dealers will do anything possible to pray on people. Unlike an impulsive purchase at BestBuy, these people fall into a trap that has no end.

[CaptainCrunch]

Originally Posted by 81MC

I know it’s their own fault, but I feel really bad for people like that. It should be illegal to finance a loss on another loss, but those dealers will do anything possible to pray on people. Unlike an impulsive purchase at BestBuy, these people fall into a trap that has no end.

I'm guessing the car market is pretty soft right now because I keep getting calls on trading in my car on a newer model, though I'm still a couple of years away from finishing my car payments.



I can see why its seductive, you can get a new car, with the same payments, no muss no fuss, except that some of these people end up with 7 or more years of car payments.



The last time, I was just curious and went in and the pressure was immense to make a deal, and they used every trick, the scrabbling 4 squares, the bringing the manager over to make a deal. The used car salesman vibe.



I can see how someone could get overwhelmed.

[lazypucker]

Do the 4 square, re-financing, trade in your old ride for a new one, free this / free that type of deals only happens in American cars dealerships? I don't recall seeing any type of those high-pressure sales tactics in a Japanese or European car dealership...

[CaptainCrunch]

Originally Posted by lazypucker

Do the 4 square, re-financing, trade in your old ride for a new one, free this / free that type of deals only happens in American cars dealerships? I don't recall seeing any type of those high-pressure sales tactics in a Japanese or European car dealership...

This was Hyundai

[TorqueDog]

Originally Posted by bagofpucks

Alright, bumping my old thread as I have a similar question. Different friend is in a dilemma. She has a 2019 SUV that she has $12-$14K of negative equity on. She is going through a divorce so it has become clear she can’t afford to keep it (probably couldn’t have afforded it in the first place, but I digress...). What are her options? Sell privately and eat the loss? Hand back the keys and take the 6-7 year hit on her credit? She has tried to discuss options with the dealer, but the issue is she really can’t afford any kind of payments, so there isn’t a lot of options there. Anyone else with experience on this have any insights?

I'm guessing the payments must be just dreadful on this thing, such that my first thought of a lease or finance takeover is out of the question.

[lazypucker]

On a side note, I noticed that the past few weeks while driving there were number of really new American "luxury" cars like Cadillacs, Jeeps, RAM trucks being towed. The only reason I could think of is because they are being repossessed.

Normally only beat-up POS cars needs to be towed because they broke down on the road, but higher-end new cars? A lot of people are struggling these days, and these bloodsucking car dealers' trick deals weren't helping either....

[bagofpucks]

Originally Posted by TorqueDog

I'm guessing the payments must be just dreadful on this thing, such that my first thought of a lease or finance takeover is out of the question.

Yah, the big issue is someone could get a 2020 for a similar price and possibly better financing without all the dealer add ons.

[CaptainCrunch]

Originally Posted by lazypucker

On a side note, I noticed that the past few weeks while driving there were number of really new American "luxury" cars like Cadillacs, Jeeps, RAM trucks being towed. The only reason I could think of is because they are being repossessed.

Normally only beat-up POS cars needs to be towed because they broke down on the road, but higher-end new cars? A lot of people are struggling these days, and these bloodsucking car dealers' trick deals weren't helping either....

That was likely to happen as the banks have come to the end of deferments. I expect that there are lots of foreclosures happening as well.



Its sad to see, my dad's neighbour lost his and his wife's car, he's been looking for work since March and I think he finally gave up. He's young too.

[Snuffleupagus]

Originally Posted by CaptainCrunch

That was likely to happen as the banks have come to the end of deferments. I expect that there are lots of foreclosures happening as well.



Its sad to see, my dad's neighbour lost his and his wife's car, he's been looking for work since March and I think he finally gave up. He's young too.

Yeah, It's amazing what 8 months of hardship can do, my nephew had to sell his F-150 Raptor, his wife's explorer and it cost him another 14k in savings to clear the loans to save his credit and likely their house.

[CaptainCrunch]

I think we're just at the start of the hard times that we're going to see. I have a friend that's getting ready to sell his truck when the deferments come to an end (Which I think is next month). Another friend that's looking at losing their house.



Bankruptcies had started dropping in August but were spiking in the last quarter of last year. I haven't seen any figures for this year. But with a lot of people running out of benefits we're going to see a lot of people giving up cars and houses.

[calgarygeologist]

If this is true it is going to be an awful year for mental health and suicide. Those stats could be really scary this year as people lose everything they have worked for and give up on waiting for a recovery.

[CaptainCrunch]

The stats are a little harder to find


https://www.cbc.ca/news/business/ins...ovid-1.5798319


I found some articles on business bankruptcies at the end of 2020, but nothing for 2021.

[Igottago]

Originally Posted by Table 5

I'm almost 40 now and was just this weekend considering maybe buying a new car for the very first time. I knew it all along in the back of my head, but this thread knocked some sense back in me. Oh well, it was fun to dream a little.

I'm the same age as you and I literally completed the purchase of my new (used) vehicle today, and I understand exactly how you are thinking. I was was always intending to buy with cash but once looking around I started having the internal battle about having a newer car. Its funny how your irrational vs rational brain works. You start thinking "the interest rates are pretty good, look at all those new safety and tech features, the new model looks sweet, what about apple car play, blah blah blah.." etc. I actually test drove a couple newer models that I probably would have financed. And you know what? After I drove them I didn't care about any of it. I realized they were just cars and in 2 weeks I'd be used to them and thinking about something else, but with years of monthly payments to have to take care of.

In the end I bought a used vehicle, cash, at a very comfortable price point in my financial situation. Best decision ever. I will sleep tonight and not even think twice about the purchase, and I still got a vehicle that I genuinely like and will do just fine for me.

[undercoverbrother]

Originally Posted by Scroopy Noopers

If you have the means, get the same car a year or two used. That’s a smart move in my opinion, if you’re buying a vehicle because you want to and can easily afford it. Just do the math to calculate how big of a downpayment you should make so your never upside down on the car.

Pretty solid advice

I always buy a couple of years old and drive then till I have to call a cab while the vehicle dies at the side of the highway

I am 270,000km into a 2011 Durango Citadel I bought used in n 2013, it had 30,000 at the time of purchases and I got it for less than 50% of the original price.

[I-Hate-Hulse]

Originally Posted by CaptainCrunch

I found some articles on business bankruptcies at the end of 2020, but nothing for 2021.

The judicial action / foreclosures on MLS is a good indicator of this.

CP's realtor used to track bankruptcies on MLS in his forum but it appears he's stopped.

[I-Hate-Hulse]

Originally Posted by burn_this_city

I think Jeep overestimated how many people would pay real truck money for something that is mostly for show.

This made me curious as to Gladiator sales. From goodcarbadcar - YTD Sales in Canada (Dec I think):

Ford F-Series 128,650
Toyota Tacoma 16,946
Ford Ranger 10,840
GMC Canyon 5,030
Jeep Gladiator 4,479
Honda Ridgeline 3,369

That is terrible for something as hyped as the Gladiator was. Clearly they priced this wrong. Typicaly FCA (err Stellantis!) it'll be $15,000 on rebate next month....

[Fuzz]

The thing with the Ranger and Canyon is that they have cheap versions that companies can buy as work trucks. No company is going to buy a Gladiator at $45k when the others are under $30k.

[Sliver]

Yeah, Gladiators are laughably expensive and they don't look cool enough in stock form. I've seen some with wheels, tires, lifts, etc. that look amazing, but then those guys have to be like $80k into a friggen Jeep. That truck should have started at $30-$35k to make it attractive to your average 30-year-old guy that would want to buy it. Old guys with money are very unlikely to buy a Gladiator if it's going to be their only vehicle because no doubt they drive like garbage with compromises here there and everywhere.