How to bury
Negative Equity In A Lease
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
for
previous courtesy vehicle okay so what
these cars are is these are serviced
loners
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
