Most of the time, car loans for used cars are not going to end up â€œupside downâ€. Used cars have already experienced the majority of their depreciation in the first couple years, and for the most part â€“ buying a St. Louis used car instead of new will prevent you from owing more than the car is worth. There are some instances when your used car could end up with an upside down loan, though â€“ and if youâ€™re in that situation, Cross Keys Auto offers the following tips to help you turn it around:
Consider Selling Your Car
If your used car loan is upside down and you were thinking about trading it in for a different used car, the trade-in value may not be enough to cover what you still owe on the loan. When this happens, you have to pay the difference, or roll the remaining balance onto the back of the next car loan. This is not ideal, nor always possible, particularly if you have less than perfect credit. On the other hand, sometimes you can get more money by selling the car yourself, instead of trading it in at the dealership. If you can get more of the money you still owe, selling the car to get a different used car might be your best option to get out from under an upside down car loan.
Keep the Car and Make Payments
If you are upside down on a used car loan, you can just keep making the payments until the loan turns around. This is what most people do. The downside is if you get into an accident during the time you owe more than the car is worth, you could be faced with paying on a loan for a car you can no longer drive. Whenever possible, make more than the minimum monthly car loan payment to help speed up the process and get the car value more in line with what you owe on the car loan.