Hi All! Looking for some advice … located in Western PA!
Currently have a 2020 Jeep Grand Cherokee High Altitude with 55k miles. 1 dealer offered me 22k for it, the other 2 offered 25k. Problem is, I owe 37 currently. My current interest rate is 13% and I pay 850/month which includes GAP and bumper to bumper warranty on the Jeep.
Is there any way (lease or finance) to roll this negative equity into a better situation? I have about 3k I can put down. I need an SUV, as I have children and dogs. Open to suggestions on make and model, as I’m trying to search through all of the current deals and frankly, it has my head spinning. Thanks!
How high of a monthly can you afford? And do you have tier 1/A credit?
I think the only thing you can bury this much neg equity is an EV of some sort but your monthly is going to be high. EV9 or EQE/EQS is what Im thinking. Theres no magic fix, you end up paying the neg equity either way.
Have you gotten additional quotes? Is there a reason youre getting rid of the jeep, esp if its under a warranty?
Is there a reason you need out of a 4-5 year old car with average mileage and a warranty? The reason I ask is because you’ll be paying for the negative equity, plus interest in the case of a new lease, one way or another.
Rather than a new lease, have you looked into refinancing your loan into something less than 13%?
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Thank you for your reply! I have a 740 credit score currently, don’t believe that is quite Tier 1. I was hoping a lease would be an option, as I can be free from the negative equity within 3 years and pay less overall without paying as much interest. Even if it means a higher monthly. The highest monthly I can swing would be 1,100k.
Right now, I need to replace the tires on my Jeep. Thinking about investing the money into tires, plus my higher interest rate had me rethinking the situation. If I wanted to try to refinance, perhaps instead of paying to refinance, I can pay to get a newer car while also subsequently getting a lower interest rate. Or should I stay put? I appreciate the help!
Hi! thank you for the reply! Right now, I need to replace the tires on my Jeep. Thinking about investing the money into tires, plus my higher interest rate had me rethinking the situation. If I wanted to try to refinance, perhaps instead of paying to refinance, I can pay to get a newer car while also subsequently getting a lower interest rate. Not sure if that would be wise or not, really.
Paying $1k to replace tires seems like a relatively small price to pay in comparison to paying potentially a few thousand dollars in fees on a new lease plus the added rent charge of the $12-15k of negative equity you would be rolling over. Plus, there should be little to no cost to refinance you current loan and you should be eligible for better rates with a 740 FICO score.
It’s certainly possible to bury the negative equity, but you’d easily be paying $400/mo on top of what you would reasonably expect to be paying without it.
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I am pretty sure it is going to be cheaper than trying to “bury” about $12k+ in negative equity.
You shouldn’t have to pay any money out of pocket to refinance your loan. Btw, if you roll negative equity (NE) on a new lease/purchase, you will still have to pay interest on the NE.
And 9-11% tax on top of that in PA
How long have you had the Jeep, and how is your interest rate that terrible you have ok credit? 
Point being - in order to make this situation better, we need to realize/accept why we are in the situation in the first place. Trying to wipe this under the rug and jumping into the next deal isn’t going to solve anything.
$12k is an entire beater car - you are willing to just burn that? That is what is being discussed here.
Thank you all for your replies. I will just get my tires and stick with what I have, considering the situation. I appreciate all of the help!
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You’re still going to refinance though right?
Although a refi on the entire amount you owe may be tough since you owe more than the car is worth, and while it is likely you can find a lower rate somewhere else, you can cut your interest rate in more than half with Armco being right there in PA where you are.
I am not sure if I can, being that I have negative equity in the car.
Not the greatest option, but if you have no liquid assets (cash) lying around you can put the negative equity on a 0% balance transfer offer on a credit card for no fewer than 12 months (preferably 18 to 24 months and a low annual fee if a new card) and refi the remaining max amount with a credit union. Could be a large payment between the two if you can manage it but you will save big in interest.
The key here is to pay that 13% loan off ASAP or refi it to kill that interest.
Sounds like a great option to turn this bonfire into a forest fire
Totally agree, and that’s why I said it was “not the greatest option” earlier!
If you’re going to trade/sell this Jeep do not put new tires on it. You’ll never get that return on your investment back.
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