17 Year Old Owes $3500, Help?
I am 17 as of June. About 6 months ago, I bought a slightly used car(07 Cobalt LT 34k mi) through my grandmas name. Im paying insurance and the car note on it. The note is $280 a month. I have a job and i have no problem making the payments but i just dont have any money left over to do anything or go anywhere. Well I have decided to try to sell the car and buy something little cheaper and more affordable. Ive had the car listed in a local car magazine for maybe a month now at the price of what i owe on it which is $12,500. I havent had any offers on it. I recently took it to CarMax to see what they would offer for it and they would give me $9000 for it, I figure the next car I choose will be cheap and I can just add the difference onto that car. But I cant get a bank to loan more than what Kelly Blue Book says a car is worth, thats the hard part. Is there any easier way??
Well, to begin with, you didn't buy a car because you are under 18 and can't enter into any type of financial transaction. You convinced grandma to put her name on the line, and she bought a car.
Cars depreciate in value, and you are upside down on the loan at this point, you owe more than it's worth on the open market, and it's not likely you will be able to sell it.
Blue Book is over rated for the most part, and banks don't use their inflated prices, they use 'fair market value' and will loan up to (if you have great credit) 90% of that, not over it.
Generally it takes 2 years before you reach the break even point, where you owe as much as the fair market value of the car is, and you're "about 6 months" into it.
Keep on making payments, because if you don't and it gets repossessed, it's grandma's credit on the line.
And you don't want to elimiate one debt by taking on another, higher debt anyway, even if you could.
Another example of choice, leading to consequence. Sorry.
