278-What Do You Do When You're Trapped in an Upside Down Car Loan?

Radical Personal Finance

Joshua J. Sheats, MSFS, CFP, CLU, ChFC, CASL, RHU, REBC, CAP

Finance, Retirement, Insurance, Business, Money, Education, Self-improvement, Financial, Independence, Growth, Advice, Investing, Family, Personal, Radical, Christian, Faith

4.4 • 1.9K Ratings

🗓️ 12 January 2016

⏱️ 30 minutes

🔗️ Recording | iTunes | RSS

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Summary

Today, we cover this question from a listener:

Joshua,

I know you get a lot of questions, but I was wondering if you have a radical way to get out of an upside down car loan.

I do financial coaching for people in our church who have requested benevolence, and most of them have large car payments - e.g. Someone owes $25,000 on a car worth $15,000. I cannot find a solution that is good (and maybe there is none).

Dave Ramsey says borrow the difference so you have a smaller loan, but by the time someone is requesting benevolence, they cannot qualify for borrowing any more.

Other ideas of rolling it into another car loan with incentives aren't great either. It is really the $3,000 in negative equity and more that I am looking to solve for.

Any radical ideas?

Travis

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Transcript

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0:00.0	Today in Radical Personal Finance, we tackle a problem that affects about 50% of new car buyers after a while,
0:08.0	which is this, what do you do when you're upside down on your car alone and you're trying to escape for
0:16.2	whatever reason you owe more money on the car than it's worth how do you get out of
0:19.2	that situation do my best today to give you a few helpful ideas. Welcome to the Radical Personal Finance Podcast. My name is Joshua Sheets and I'm your host. Thank you for being with me today.
0:46.0	I'll do my best to give you a few helpful ideas, but frankly, I need your help.
0:51.0	I have
0:55.0	had struggled for several days to get this episode to you. This is the umpteenth time I've sat down and hit record, but I'm determined,
0:59.0	like it or not, good or bad, record is on and I ain't stopping.
1:05.0	Sometimes it's easy for me to create content. I just hit down, sit down, hit record and go.
1:17.5	And sometimes I struggle and this is one of those questions that for whatever reason I've struggled with.
1:22.3	I wanted to answer this on Friday.
1:24.0	Here it is on Tuesday afternoon at 3.30 and I'm finally like re-recording and I'm determined by 5 o'clock
1:29.0	this thing is going out one way or the other even if I just get to the middle of it and say,
1:32.0	guys, I'm sorry this was my best shot. one way or the other even if I just get to the middle of it and say,
1:32.8	guys, I'm sorry, this was my best shot, and it stinks.
1:36.0	That's what's going to happen.
1:37.7	Because I've worked and worked on the question.
1:40.2	The question is not that complex,
1:42.1	but for me coming up with a useful answer that is what has been complex.
1:47.0	I've tried to come up with a framework, I've tried to come up with reasons, I've tried to come up with options, I'm going to share those with you today.
1:53.0	But this question is tough.
1:56.0	It's tough.
	...

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