How To Get Out Of Your Upside Down Car (Loan-Wise Not If You Rolled It)

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hello fine people of YouTube hard-worker

12 here taking a ride my old Saab today

and gonna talk about a topic that I'm

very familiar with being upside down in

a car not upside down and this one cuz I

have the title but I am upside down and

the other two cars that I have and I

don't care cuz I'm not trying to get rid

of either of them I've been a car

salesman since 2006 so I have dealt with

many customers who are upside down in

their cars upside down tanked buried in

it left in it wrong whatever you want to

call it you owe more on this car than

what it's worth and you want to trade it

in and try to get something new and this

can be a problem if you are really

upside down let's say you're $10,000

your car's worth 10 and you owe 20 let's

use that as a baseline because that's

pretty upside down so there's a few

reasons why you might want to get rid of

it first and foremost the people that

play what I call car musical chairs I

had one of these in my dealership a few

weeks ago they had like a six month old

Jeep Cherokee 2018 model they had traded

something else in that they were upside

down for that and now they want to get

out of a Cherokee and they wanted a

pretty new model that we don't discount

that much no rebates on it and they

wanted the same payment and they had no

money down no not gonna work so if

that's your situation all I can tell you

is good luck people want to trade their

upside-down cars in for other reasons

you just lifestyle change you have a

Camaro two doors and you just had a baby

and the Camaro is not working with the

car seats and the strollers and

everything else that a baby entails need

totally understandable maybe you just

got a new job now you have a long

commute you drive a big pickup truck gas

is killing you

understandable the the people I feel the

worst for is if they're upside down and

in a car that's older out of warranty

and it's had a major malfunction

transmissions gone it's gonna take

$5,000 to fix it you don't have the

$5,000 you need a new car okay I am

going to show you how you can get

yourself into a new car and there is go

ahead and cross ladies and there is a

little bit of an art form to this as a

salesperson I've dealt with these people

many times and the first thing I think

is I need to find a car that I can bury

this person's in equity into and still

make the loan makes sense so why am I

thinking this way the reason why a bank

will give you a lower interest rate on a

car loan or a home loan than they would

on say a credit card is because car loan

or a home loan is considered

collateralized debt so what that means

is if you get a car loan and you don't

make your payment's the bank can go repo

the car and they have something that

they can take to auction and try to

recoup you know the outstanding balance

on the loan they can't do this with a

credit card because all the steak

dinners and tickets to Disneyland you

bought they're never getting back so

that's why your car loan your home loan

is going to give you a much lower

interest rate than a credit card with

that being said there's a limit to what

a bank will loan on a cart so let's say

you have a thirty thousand dollar MSRP

new car some banks base loan-to-value on

MSRP some base it on invoice just to

keep things simple we're gonna base it

on MSRP of $30,000

typically somewhere between a hundred

and twenty to a hundred and thirty

percent of MSRP is what a bank is going

to loan you again depending on your

credit rating this is based on having

good credit so let's say you can get a

hundred and thirty percent on a thirty

thousand dollar car you can borrow

thirty nine thousand dollars against

this car well you add in tax license

registration plus the ten thousand

dollars that your upside down we're over

the limit and this is kind of a

best-case scenario because some people

will not qualify for a hundred and

thirty percent loan to value so how can

we get around this a couple of different

tips first of all if you have access to

a credit union if you're already a

member of a credit union or if you can

become a member of a credit union do

that and try to arrange auto financing

through the credit union the reason why

I say this is that in my experience

credit unions will often extend a higher

LTV they may be more willing to give you

that hundred and thirty percent hundred

and forty percent that you need or you

know if your credit rating is below

seven hundred they might be willing to

at least give you a hundred and ten or a

hundred and fifteen percent when a

regular bank would be less likely to do

so so try to become a member of a credit

union do your research on your financing

that may help you get out of where you

are another tip and this is what I think

about when I'm faced with this situation

and I need to find something that I can

put somebody into his you have to pick

the right cart you can't be that picky

I'm sorry I'm sure in your mind I'm

gonna trade in this bucket that I'm

buried in and I'm gonna get next I

understand everybody has what they want

I get it the problem is it may not be

feasible simply because you know if

you're looking at a new hot model might

not have the rebates might not have the

discounts that you're gonna need to get

that sale price low enough

absorb the inequity which is why again

when I'm faced with this situation on

the lot I'm thinking what car do I have

that I can put this person and what

programs do I have from the manufacturer

that I can make this work with sometimes

it's a used car but used cars are really

hit and miss it's really down to the

individual car so what I'm gonna do is

I'm gonna get on my computer and I'm

going to show you how you can find a car

that you can unmarry yourself with that

you'll be able to get a new car get

something that will hopefully work

better for your lifestyle or something

that runs if you're just in a car right

now that's jacked up and isn't running

and you don't have the money to fix it

you just want something else I'm gonna

show you how to find that so let's go

home and get on the computer okay so I'm

back home and I'm on my computer and I'm

looking for cars which is one of my

favorite things to do so if you're

looking for a car that you can unburied

you can use to help absorb your negative

equity my first tip is to look at

American cars the reason why I say this

is as a rule of thumb American cars some

of their models are going to typically

carry higher rebates specifically and

discounts that are going to help you

unbury yourself out of your current car

now as I record this it's January 10th

of 2019 and now is actually a really

good time to try to get yourself out of

your car so let me show you what I mean

by that right now this dealer which is

LA Motor world still has one hundred and

fifty to 2018 models left so let's see

what they've got and I'll show you what

I'm talking about so the very first one

new 2018 Jeep renegade MSRP on this car

is twenty six nine ten they've got it

down to nineteen nine nine five with

various rebates and discounts it looks

like you will have to finance through

Chrysler capital to get one of them

which may not necessary

be a bad thing but here you go you're

looking at a total savings of six

thousand nine hundred and fifteen

dollars on this car off of the original

MSRP so if you're ten thousand dollars

buried well there you go right there

you're taking care of almost seven

thousand dollars of it and with a pretty

low downpayment maybe a thousand of

$2,000 you could probably put yourself

into this car assuming that your credit

was okay not perfect but okay let's see

what else they have I'm sure they've got

something else that would work let's

look at chargers since I love Dodge

Chargers here we go this will this will

be good okay so similar savings here to

the renegade that we just looked at the

difference is this is a more expensive

car the more expensive the car the more

in equity you could bury into it if you

look at an MSRP of $38,000 and you're

talking about a hundred and thirty

percent of that you know you're getting

close to fifty thousand dollars that you

could possibly finance on this car

assuming you had good credit so with a

net price of 31 to 45 with ten thousand

dollars in equity even with zero down

you're well under where you would need

to be potentially to finance this car if

you do go this route let me just give

you a quick piece of advice please buy

gap insurance what gap insurance does is

if you total the car and your insurance

company deems it to be worth less than

what you owe on it which they certainly

would in this case the gap insurance

covers the the Delta the balance of what

you owe on the loan so you're gonna save

yourself some consternation there if God

forbid the car gets totaled also

consider buying an extended warranty

because you don't want to end up in the

position especially if you go with long

term financing five six seven years down

the road where you have a major failure

on the vehicle engine transmission

something blows up and you don't have a

warranty to fix it and you're right back

where you started being upside down in a

car the

not worth anything that you still owe

money on so at least consider an

extended warranty that will cover the

term of the loan however many years the

loan is let's go look at Forbes and see

if we can find something this is

Theodore Robbins Ford which is the Ford

dealer in beautiful Costa Mesa we'll

look at new vehicle inventory and we are

going to scroll down once again I'm

looking at 2008 teens right now they

even have a 17 talked about being buried

they're buried in that I'm focusing on

the 2018 model cars right now because

that's what's out there if you're

watching this video in June or July you

can do the exact same thing I'm doing

just look at current model year cars and

try to figure out what has the rebates

on it look at different dealer websites

some dealers do post rebates and

discounts and things others don't so

shop around let's see what we have let's

look at sedans sedans right now are not

selling as well as SUVs and trucks so

okay so here's one this is a Fiesta and

this car has a pretty pretty hefty

rebate considering its price seventeen

4:05 MSRP gives us a low thirteen 339

sale price but don't get it confused

here because this might not actually

help us if we're ten thousand dollars

upside down and we don't have a lot of

down payment you got to think about

loan-to-value so the loan-to-value you

know the maximum amount financed on this

car if you're looking at a hundred and

thirty percent of seventeen four oh five

one seven four zero five times one point

three you're gonna finance about twenty

two thousand six hundred dollars on this

car this isn't gonna help us get out of

our upside-down this because we got to

apply tax and everything else so unless

you got a little bit of money down this

isn't a good way to go that's a mistake

a lot of people make when they're trying

to get out of a car that they're buried

in they think if they go with a cheaper

car it's going to work out better

sometimes it's actually the OP

you need a more expensive car to absorb

the inequity let's look at this Ford

Taurus bingo this is this is what you're

looking for 35,000 MSRP car for twenty

five nine nine nine you're looking at

over nine thousand dollars worth of

discounts and rebates here so if your 10

grand buried done that wipes you out and

this is a car that you can get into you

can drive and hopefully will work for

you as far as your lifestyle whatever it

is this is the sort of thing you're

looking for but you're saying I don't

really want an American car I don't want

a Ford Taurus I don't want a Jeep

renegade okay I have one more outside of

the box idea for you B M W oh wow javier

Duran is working I know this guy he's a

good guy

we went to Texas together once anyway

that's neither here nor there

this is Crevier BMW Crevier BMW is the

largest volume

BMW dealer in the US and what you're

gonna want to do if you're looking at

BMW is go to see pio specials let's see

if this brings me where I want to be

perfect okay this is what you're looking


previous courtesy vehicle okay so what

these cars are is these are serviced


this is BMW had a 2018 x1 Crevier BMW

had a 2018 x1 in their inventory they

essentially sold it to themselves and

they used it as a service loaner so they

gave it to people if you bring your BMW

for an oil change or warranty repair

they give you a car to drive now the

beautiful thing about these is you can

still utilize new car programs on a

service loaner so what you want to try

to do here is potentially do a lease now

this x1 probably had an original MSRP of

around $38,000 they got a sale price on

it of 29 988 so you're already looking

at $8,000 below the original MSRP but

BMW Financial will let you use the

original MSRP for loan-to-value purposes

so again we can bury 10 grand in

this car if we need to and you can do it

on a lease now I'm gonna tell you right

now don't get excited you are not gonna

qualify for this 228 per month if you

have an equity that you're rolling in

because I'm sure this requires some down

payment and blah blah blah blah blah

but if you go into this and you lease

this car and you can afford the payment

for three years cuz this is a 36 month

lease right here you'll be done you'll

be out of it you're an equity we'll be

gone you know you can least return the

car get something else do whatever you

need to do so Mercedes I think also runs

a similar program I only know the

details of BMWs programs because I sold

BMWs for a while so that's why I'm

familiar with this but you may be able

to do the same thing with a Mercedes so

that could be something to look into and

you know this is a small SUV four doors

could work as a family car if you don't

have too many kids potentially it could

work as a commuter because the gas

mileage isn't bad you know 32 on the

highway not terrible and they have cars

they get better mileage you could do a

3-series and get higher mpg and this

cars got less than 5,000 miles on it

still under warranty so this is a

potential way that you might go as well

look at a BMW service loan or lease see

if mercedes-benz does it similar they

probably do because the Germans just

copy each other

ow d doesn't do it this way because

Audi's outie is Audi they're different

but anyway this is what you need to do

you need to find a car that that will

work for you that you can live with that

you can bury this inequity into so if

it's some American car with a big rebate

you know a service loan or BMW a service

loaner Mercedes or you know who knows a

leftover car on a Toyota lot something

like that that they can discount

significantly to put you where you want

to be that's what you need to find if

you're upside down you don't have a lot

of money down and you need a new car so

that's my advice to you I hope you found

this video to be helpful I really do

appreciate you watching if you enjoyed

the video if you could subscribe or

leave a like or a comment I would

appreciate it again thank you so much

for watching and have a wonderful day