The Only Options to Escape a Bad Car Loan


Michelle on writes:

“So I made the mistake of financing a $19,995 2011 Toyota Camry 2 months ago the loan term is 72 months and my rates is 26.7%.

I put down 3700 dollars.My payments are $443 a month and now 2 months later I seriously regret getting this car.Now I’m trying to take it back for something cheaper but no one will take the car without at least 2 grand down because I owe more than its worth.I don’t have 2 grands to put down towards a new car.

How would you recommend I get rid of this car? Selling it isn’t an option either because no one wants to buy the car.I had one dealership tell me they would be taking a loss buying it straight out without doing a trade.I wish I had found your site before buying this car I had never financed a car before and i’m only 19.

Having parents finance wasnt an option either since they both have bad credit and I have no credit. Thanks for the information”



Thanks for being honest about your mistake! You still have a little bit left to go in your assessment and taking of responsibility for the situation, but thats pretty impressive for age 19.

The last part you should acknowledge is that no, you didnt have parents to finance the car but you also didnt need to finance the car in the first place.

Every time we avoid sacrifice & patience, we drive fool speed into regret.

I’m sure today, you would trade that car for a short term paid off reliable bucket given the chance.

Which brings me to my next unfortunate point. If you’re looking for a clean way out of this, there isn’t one. You’re pretty much stuck, my friend.

Only ways out of most bad car loan deals before the maturity date are:

  1. Bankruptcy
  2. Repo (this normally leads to Bankruptcy)
  3. Go hard at the BKF debt debt snowball method and knock the balance out early.  (using Note: refinancing with a credit union can help you do this even quicker, but it won’t be easy, regardless of the interest rate you end up paying. Remember, you’re paying over $20k for a car likely to be worth $8k-$10k once you finish paying it off. No interest rate on earth can save you from this ultimately huge financial hit.
  4. Have someone take over payments (like or– and yes this rarely works out)
  5. Sacrifice by cutting back on other expenses so you can  save up enough to pay the difference. (I’m referring to the difference between how much your car will sell and how much you owe the bank before you sell the car to a private party or Carmax. There is always a difference)

That last option means you’re also going to be taking the bus, Uber, public transportation etc shortly after you’ve agreed to sacrifice.

Because spending $6k to get out of a negative equity car loan and then buying a $14k Dodge Challenger means you just got exactly nowhere.

This is why we don’t mess around with debt. And especially not debt on items that depreciate a the rate of Mach 1.

Wrote a song about this horrible situation dealers sucker us into. Like to hear it here it go>>


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