Thanks everyone. I appreciate all the feedback!
I get it that you want to “get rid” of the be negative equity, but there is no magic wand that is going to make it disappear. Keep paying down the loans on the two cars.
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Yeah, I think the OP should just ride it out, too (after checking out re-financing). Each car should be very reliable, relatively cheap to maintain, and they are both useful cars, too, for what the OP needs. The negative equity stinks, but the situation could be worse.
Trying to purchase or lease something else currently is literally just repeating the same mistake, IMHO.
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Like @Bluemkn57cars stated, no need to extend the term, keep the time the same on the loan, you would just be lowering the rate meaning more of the payment is allocated to principal instead of interest.
Honestly it looks like your really justifying a way to get a new car in your head while essentially carrying on with the negative equity strategy. It’s pretty common for us to see someone who only “wants to do it one more time” and then be done with it. Make your current situation the last one, not the next one.
Also mentioned in this thread was that a few people over the years were able to successfully pull this off. It had elements that no longer exist. Lower interest rates, higher incentives, dealers willing to discount more than in current times. Absent those it’s almost impossible to see how your going to be in a better financial situation but you would have a new car if that’s the justification.
I see more old 4runners and Camry’s on the road than most other makes / models and I personally moved across the country towing a Uhaul trailer in a 2002 Tundra with approx 225,000 miles on it and didn’t think twice about doing so. Keep the oil changed and preventative maint up to date and those Toyotas will last a long time.
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I don’t think that is a good idea based on their current rates compared rates available now for 10 year old cars, especially with the recent rate hike. I think all that happens is they get the same or worse rates and now have a ding on their credit.
You are going to have an easier time burying the negative equity from the 4Runner. Most banks will only loan a certain percentage of the car’s MSRP, so you will need to look at a very expensive car to do anything with the Camry or find a car with a huge discount and/or rebate. But keep in mind that if you are rolling over $14k of negative equity, that is $388/mo before you consider interest on that. Honestly, I would suggest trading in the 4Runner if you state has a tax credit and finding something really cheap to drive for 2-3 years while you pay down the Camry as fast as you can.
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Ride it out. Pay more into the car each month.
Realistically, everyone is saying refi. I think you APR are decent and you wont generally find anything lower in this market. Also keep in mind lender generally dont want to lend 100K+ miles vehicles.
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I’ve taken everyone’s suggestions to heart and am not in this justifying trying to just buy a new car. Nor a silver bullet. Just trying to look across all options to determine the best vehicle for current debt to absolve said debt over the course of the next few years. If that means sticking with current vehicles, maybe refi then cool. I just want to make sure I’ve looked at all options before I say eff it, we’re riding out this storm for the next 3-4 years as is.
So what are you saying - trade in 4runner for a really cheap ride while paying down Camry as fast as possible? If so, I’m not sure there’s anything so cheap out there while adding the $4500 negative equity from the 4runner that’d be less than our current monthly payment total ($747).
Just trying to clarify what you’re trying to say.
The real challenge
is going to be the next repair. If they need tires, put on tires. If they need CV boots or bearings or a radiator, do it. I wouldn’t think twice about any repair other than engine/transmission, and if it’s either of those do the math and try to make it work. You are either 3 years from being out of this hole, or you need to dig a bigger hole.
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Given current rates on used cars, you’re not going to get any better than what you got on the Camry, not to mention how massively underwater it is. You should ride that one out.
As for the 4Runner, you might be able to refi it down to a lower rate, worth a shot.
Just take the entire idea of leasing a new car and rolling negative equity and throw it out of your mind. Terrible idea for so so many reasons.
If you can ride this out, in 3-4 years you’ll have no car payments and two hopefully dependable vehicles. Then start putting money aside for repairs, will almost certainly be cheaper than depreciation on something new.
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I definitely love the 4runner, and suits us well aside from gas expenses. They get decent gas mileage for how bug and capable a vehicle they are, but nothing compared to even an ICE Hyundai Tucson you know? Gas expenses are a concern for us, as I don’t believe we’ll ever see the prices we enjoyed several years ago, and perhaps, will only remain high or raise even higher over the coming years.
That and the fact that the frame was fairly rusty when we bought it. We undercoated it when we bought it, and I’m not too worried. But I’d be lying if I said that wasn’t in the back of my mind. Maybe I just need to apply a hardcore rust conversion process to it and seal it in grease afterwards to buy more time with peace of mind…
Oh, and replace a cat and/or exhaust soon. Damn rust…
Keep in mind you are occurring $4-$6K in new fees just to change to a new car including sales tax, doc fee, bank fee, etc. Doesn’t hurt as much since it’s rolled in, but think of the potential repair bills that could cover.
As painful as it may be, don’t make the same mistake twice. Your lucky they are Toyotas vs high mileage German cars.
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Fair enough. Thanks for your insight! I’ll give refi a look for the 4runner. Camry I’m sure I’ve got the best rate through some friends at the Toyota dealership directly through Toyota Financial.
I believe in NE, you get a trade-in credit. So if you trade-in your 4Runner, you are saving up to $825 in sales tax. So lets say you find a car for $10k. You pay $0 in sales tax ($10,000 new car - $15000 trade in value = $0 taxable amount) plus whatever registration fees you have. Roll in the $4500 and now you have a loan amount for lets call it $15k. 4.99% over 60 months from a credit union and your payment is $290/mo. It ain’t pretty, but you now have an extra $150ish per month to pay down the Camry or save. Your challenge other than finding a car for $10k, will be finding a bank willing to roll in the negative equity. But I think with your credit scores and a lower loan amount, you should find a taker.
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Sounds solid, thank you! I’m looking into refinancing at the moment, but I’ll explore this option as well to see if there’s anything worth pulling the trigger on in doing so. Thanks again.
Guaranteed you did not get the best rate possible.
In the future, rate shop with banks and credit unions. I’m guessing you’ve had the Camry for a few years if you have 4 years left on the loan? In 2019/2020 banks were basically lending money for free and you still landed a near 5% rate with excellent credit. I always encourage people not to just accept what their friends give them.
You’re not going to get a better rate now, however so refinancing is probably completely out of the question for both vehicles. The only financial advice I can give is just ride it out another two years and do the maintenance when you need to.
Toyotas are reliable and straight forward cars, they’ve worked for you up until now and will continue to do so. The 4Runner is your best bet for dumping debt, but you’ll dig yourself far deeper when you go to replace it. Rates are the worst they’ve been in decades and it’s literally the WORST time to buy a car that’s used or new. Especially since you’ve stated you effectively need a crossover/SUV.
Just keep the 4Runner. The Camry is what it is, just gotta pay on that.
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Good luck. You might be able to save a little on the Camry, but I think the 4Runner will be tough. But you can also do the same thing on a lease. $4500 is about $125/mo (before interest) on a 36 mo. lease. So if you can find something that leases in the $300 ballpark, that is another alternative. Maybe a Nissan Frontier (if those still lease well) and you can put your drums in the bed.and/or get a tonneau cover. A lease is the best way IMO to get rid of negative equity since it will be gone in a few years.
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Are there any newer SUVs that meets OP’s requirements that’s more reliable than the 4Runner and meets all of his requirements for 10k in this market?
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It’s already been said best case for this situation. Drive these until wheels fall off or you out of debt.
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You are acting like these cars are gonna fall apart. They aren’t. Could they have a bad failure ? Sure but there are tons of Toyotas with 150k miles on the road doing just fine.
You are in a pretty bad spot and reading between the lines you don’t have a huge shovel to dig yourself out of. Frankly you’re not going to be able to do better with regards to newer cars so refinancing( if possible which is unlikely) and hoping they don’t break is your best option.
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