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      02-06-2013, 12:58 PM   #1
AllBlackBimmer
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upside down car loan?

I guess this doesnt just apply to BMWs but upside down car loans in general...

so my 08 328i is worth about 18g's according to KBB... I still owe about 10g's on it. owned the car for 2 years now.

At the rate I put mileage on my car, I am going to be upside with my car loan in the next year or two... about the same time my car will be paid off.

Do i keep my car for the long haul, pay it off and be done with it

Do I trade my car in on something else in another year? - not necessarily a BMW, but hopefully it would be.

Do I just try to sell or trade it in now, where I could get the value of it, and pay my loan off?

Thoughts? I know others must be in a similiar situation.

I love my car and would like to keep it, but not so sure about owing more than my car is worth at ANY point during ownship...

I am only 26, am buying a house in the next few months. I want to be "smart" with my money (I guess owning a bmw is not consider "financially smart" ) but that is debatable i suppose.

thanks guys.
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      02-06-2013, 02:10 PM   #2
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With the amount of miles that you say you put on a car, there is no reason for you to purchase a new car until you feel this one is not worth the hassle anymore due to maintenance costs.
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      02-06-2013, 02:15 PM   #3
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Originally Posted by pits200 View Post
With the amount of miles that you say you put on a car, there is no reason for you to purchase a new car until you feel this one is not worth the hassle anymore due to maintenance costs.
I'd have to agree with this.
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      02-06-2013, 02:18 PM   #4
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You aren't making sense (or I'm misreading something). If your car is going to be almost paid off in 2 years, how could you possibly be upside down on it in 2 years?
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      02-06-2013, 03:42 PM   #5
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You aren't making sense (or I'm misreading something). If your car is going to be almost paid off in 2 years, how could you possibly be upside down on it in 2 years?
yep, it sounds like he is saying he will have paid more for the car than what it will be worth in 2 years but.... that's normal.. depreciation lol.
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      02-06-2013, 04:09 PM   #6
Tom K.
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Depending on a number of factors, your house MAY be considered an investment. But your BMW is not - you bought it for other reasons.

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      02-06-2013, 04:25 PM   #7
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Buying another car is not smart.
As long as the car is running fine, especially when paid off, you get upside.
No car payment is where you want to be and since it's a NA 328i, the engine will last forever.

Keep it maintained and keep it.
BTW - I bought my first BMW before buying my first house.
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      02-06-2013, 04:28 PM   #8
Dhoffm80
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Quote:
Originally Posted by AllBlackBimmer View Post
I guess this doesnt just apply to BMWs but upside down car loans in general...

so my 08 328i is worth about 18g's according to KBB... I still owe about 10g's on it. owned the car for 2 years now.

At the rate I put mileage on my car, I am going to be upside with my car loan in the next year or two... about the same time my car will be paid off.

Do i keep my car for the long haul, pay it off and be done with it

Do I trade my car in on something else in another year? - not necessarily a BMW, but hopefully it would be.

Do I just try to sell or trade it in now, where I could get the value of it, and pay my loan off?

Thoughts? I know others must be in a similiar situation.

I love my car and would like to keep it, but not so sure about owing more than my car is worth at ANY point during ownship...

I am only 26, am buying a house in the next few months. I want to be "smart" with my money (I guess owning a bmw is not consider "financially smart" ) but that is debatable i suppose.

thanks guys.
To help you out cause I'm confused upside down means the cars is worth $10,000 and you owe $18,000 since it's the other way around you are defiantly not upside down unless you trade it in and the dealer gave you a low trade in offer below 10k then that would make you upside down and you would need to make up the difference.

Cars depreciate most in the first year (new model) and then they gradually taper off each year after that.
Lets say 08 328 when new depreciated 15,000 miles a year
2009 -9k,
2010 -2.5k,
2011 -2.5k,
2012 -2k,
2013 -1.5k.

Now as long as you pay your loans interest and put more then 2k each year towards the principal of the loan you shouldn't ever be upside down.

Above are hypothetical numbers and mileage, accidents, condition of paint and interior will affect your depreciation.

But I would say your not upside down and I don't think you will be at anytime in the next 2yrs just put some extra money towards the principal to keep yourself ahead.

Also Banks don't like to see new auto purchases when you are about to buy a home it can raise your APR keep your debt low if you have any credit cards keep them between 10% and no more then 40% of the line of credit don't close any revolving lines of credit just pay them down. Save any new auto purchase till after your home purchase is complete you don't want a 10yr to 30yr mortgage to go from say 4.5% APR to 5,6 or even 7 because you decided to go buy a new car before you bought the home or closed credit lines.
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      02-06-2013, 05:29 PM   #9
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Quote:
Originally Posted by Dhoffm80
Quote:
Originally Posted by AllBlackBimmer View Post
I guess this doesnt just apply to BMWs but upside down car loans in general...

so my 08 328i is worth about 18g's according to KBB... I still owe about 10g's on it. owned the car for 2 years now.

At the rate I put mileage on my car, I am going to be upside with my car loan in the next year or two... about the same time my car will be paid off.

Do i keep my car for the long haul, pay it off and be done with it

Do I trade my car in on something else in another year? - not necessarily a BMW, but hopefully it would be.

Do I just try to sell or trade it in now, where I could get the value of it, and pay my loan off?

Thoughts? I know others must be in a similiar situation.

I love my car and would like to keep it, but not so sure about owing more than my car is worth at ANY point during ownship...

I am only 26, am buying a house in the next few months. I want to be "smart" with my money (I guess owning a bmw is not consider "financially smart" ) but that is debatable i suppose.

thanks guys.
To help you out cause I'm confused upside down means the cars is worth $10,000 and you owe $18,000 since it's the other way around you are defiantly not upside down unless you trade it in and the dealer gave you a low trade in offer below 10k then that would make you upside down and you would need to make up the difference.

Cars depreciate most in the first year (new model) and then they gradually taper off each year after that.
Lets say 08 328 when new depreciated 15,000 miles a year
2009 -9k,
2010 -2.5k,
2011 -2.5k,
2012 -2k,
2013 -1.5k.

Now as long as you pay your loans interest and put more then 2k each year towards the principal of the loan you shouldn't ever be upside down.

Above are hypothetical numbers and mileage, accidents, condition of paint and interior will affect your depreciation.

But I would say your not upside down and I don't think you will be at anytime in the next 2yrs just put some extra money towards the principal to keep yourself ahead.

Also Banks don't like to see new auto purchases when you are about to buy a home it can raise your APR keep your debt low if you have any credit cards keep them between 10% and no more then 40% of the line of credit don't close any revolving lines of credit just pay them down. Save any new auto purchase till after your home purchase is complete you don't want a 10yr to 30yr mortgage to go from say 4.5% APR to 5,6 or even 7 because you decided to go buy a new car before you bought the home or closed credit lines.
Oh good great explanation cuz I was like oh snap I'm already upside down according to his calculations;(
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      02-06-2013, 06:25 PM   #10
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Originally Posted by bmwforme View Post
yep, it sounds like he is saying he will have paid more for the car than what it will be worth in 2 years but.... that's normal.. depreciation lol.
One of my friends is like this. He keeps his miles low and expects a certain amount back on the car to buy a new one. When he starts running the miles up on it and the value decreases to much he considers it a loss.

Me on the other hand I think it is worth it to buy a car and drive it until the wheels fall off instead of trying to use the old car as a down.
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      02-06-2013, 10:15 PM   #11
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I don't think you should buy another car. Being upside down on a car loan is almost inevitable, just pay it off and buy the house.
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