Trade in?!

How much will you actually pay over the course of the loan without paying towards principal? It might make you feel better about selling it under water if you compare that number to what you lose in financing fees if you keep the loan.

Even if you can get a loan with cheaper interest rates, (which might be a reasonable thing to do), it’s still a big loan. Which would mean that you go that much longer paying monthly instead of saving monthly, or even just putting that monthly money towards something else.

 

Ok. Unfortunately that's a key piece this convo was the payoff.
This is not going to sound nice but no malice intended. Just trying the harsh truth route with.
You're kinda screwed here man.

Now the helpful part as someone who had to pay for school and all the living, etc on his own.
1. You can chill on the school for a bit until you pay that down a bit. Like sacrifice and devote every free penny to that balance.
2. Try selling it privately on marketplace etc. You'll get more but 7k more? Probably not. So maybe sell something else to cover it ( if you have a motorcycle or something also)
3. Ask for help from family or a personal loan from the bank to cover the 7k and have a way to pay off the outstanding balance. I don't recommend this one but it's just an option.

FYI i drove a civic for my years in school. Wasnt a cool civic either but it got me to work and class. So got to make the choice where the sacrifice will be. We've all had to make the choice.

 

This what we call being car poor. Without knowing your whole financial picture, it's hard to give good advice. Dave Ramsey would tell you to sell eh 4Runner and live off beans and rice. Starting off -$8k in the hole with no ride is not a good situation either.

The good thing is the 4Runner will last a long time with basic maintenance. It's easily a 20-year vehicle and can handle high mileage without becoming a money pit (in most cases); residual value tends be very good if well cared for. The bad thing is fuel costs can eat you alive if you drive a lot and they can be expensive to fix.

It sounds like you're still going to have a sizable car payment assuming you don't have cash in the bank (sorry this story is playing out like that is the case). You can refi or aggressively pay down your current loan and pay off the 4Runner ASAP. Or, trade in on something more affordable, but you'd have to pay down or roll over your negative equity, which is a terrible idea.

In any case, trading on a new Tacoma to lower your payment is probably an even worse idea.

 

@Steely123 I work 3 12hr shifts a week and can pick up OT here and there, (probably should just do that!? JK) just messing bro, honestly kinda feeling down now that I have fully decided to let go of the vehicle, but you are right it is harsh but it is the truth, I f’d up and now I gotta own it and find a way to resolve it.

7k is some money but if that means I can avoid paying A LOT MORE I’ll hustle up. Appreciate looking after.

 

Good choice. We've all done it. You've gotta good head about it.
I had to drive that crappy civic cuz i did the exact same thing on a Trans Am. Lol. You're not alone.

 

The negative equity is the killer here. People roll over negative equity all the time. But it’s usually on a new vehicle with considerable rebates/discounts. And at some point it will catch up to you if you keep getting a new vehicle every few years.

 

Knowing the actual numbers right now I guess I have to take it up the chin and hustle up the 7k, don’t see any other way but just to give an idea where I’m at financially.

take home 4200/mo apt 1200/mo, do have 401k at work and forced savings of 300/mo . Just really worried when I start school migut cut off work hours that’s why thinking of ways saving. Thank you all for the time and advice!! Meant the world to me

 

I went through a very expensive divorce a few years back. I wish my current income:mortgage ratio was at your level.

I also got laid off a few years before that and went back to school to get a masters degree. I sacrificed most of my spare time to get into a better life situation. I cut back expenses considerably as my income had declined by over 30%.

It sucks. Buts it’s temporary. It’s also manageable with the right attitude and will power.

 

How old are you, what is your line of work, and what are your educational goals? How do you plan to finance your education?

 

Depends on loan duration and interest rate but rough calculation based on your buy-off, 5 years remaining @ 7% you would pay interest over life of the loan just above $8K. That would be pretty close to a wash with your negative equity should you bail and eat that all at once and you would be starting over having to acquire another vehicle with what sounds like might be close to 100% financing. You are going to be upside down on the next one as well but if the monthly payments are what is driving your decision that might work I guess. It sounds as if, based on your goals, you should be driving a much less expensive vehicle.

 

(Not a financial advisor by any means)
If you live in CO that's a very decent income imo. If you could be patient and pay off the 4runner loan in 3 or 4 years, you have a very good vehicle for a family especially if you plan to have kids or even a big dog. Maybe wait for 3 or 4 years to pay off vehicle loan and pursue education target might be a good option. Some work places will pay for education. Loosing money by selling your 4runner and start school immediately might not be best. You will regret if you join a work place that pay for education. Again I have zero expertise on financial management nor have idea of your situation.

 

How many payments do you have to do 767 at?

 

If you can work OT then you should be all over that for as much as you can. You get paid 50% more for the same hours work. OT is a gift when trying to make money. Back in the day when I was single and hourly I would work all the OT I could. It was better to get paid vs sitting around playing video games. It also keeps you from spending extra money at a restaurant or bar. Buckling down and going mad in OT can have you out of the mess in a very short amount of time.

you will also most likely get a tax advantage now on the OT.

3 12 hour shifts??? You medical?

 

@San Angelo Yes, medical. Honestly I think it’s more of an mindset for me now, yall help me wake up that the “deal” that I got is BS.

I work 3 12s in an ICU and 1 8hr to as facility as side hustle. The income I mentioned is based of that work hours (minimum to say the least)

 

So RN I guess. It will be easy to get out of this mess if so. Heck look at some weekend travel gigs that are not far from your location.

You going back to school to be a mid level or being forced to go from ASN to BSN?

 

Keep the 5th gen and budget else where.

 

@mattdc.032 do you have any family members or friends that you can lean on for financial advice? Random people on the internet is not a solid plan. I think you need a holistic approach looking at every dollar your spending and goals you want to achieve.

I was driving a Mazda 323 in my 20s not able to afford what I am able to now. I am giving you the same advice I am my kids even if its not popular. Discipline on spending and saving has put me where I am now living debt free on track to retire young in a few years. Unfortunately financial literacy is not taught in schools like it should be.

I have known many colleagues making good money that spend as fast as it comes in. Literally talking about the next new car/house/boat/bike when a promotion or bonus. You have to live below your means or you will never get ahead. Spending what you make is losing battle.

Cars are just a depreciating asset that can be a money pit trying to buy something cheap.

Something to consider is the scenario my relative is in. Upside down on current car loan on got into a significant accident. It was not his fault but car totaled. Even with full coverage insurance and other person insured at fault he is responsible for the extra money. Unable to work short term with no savings and had to buy a replacement vehicle immediately.

How would you be equipped if something unplanned happened today? You are in a good spot to reset and get your affairs in order. Learn from others mistakes while you are young and have years to recover financially. The older you get it becomes harder.

 

At the end of the day, the only real value of a car is it being reliable transportation. Personally, the last thing I want is an unreliable car that can interfere with your job/making money, and drain your savings and free time having to go to the shop for repairs.

Knowing more about the OPs situation now, I think it’s reasonable to consider refinancing, and possibly buckling down and paying extra towards the principle every month. If you have food and shelter financially covered, you can pay it off quicker and pay a lot less in total interest. If your 4runner is new and trouble-free, it has real value as a long term vehicle, more so than any other vehicle in my opinion (as long as you maintain it, including the frame).

Since they literally don’t make them like the 5th gens any more, it’s worth running the numbers to see if you can push hard and get it paid off in 3 or 4 years. Put all you can into it as payments towards the principal, like tax returns, bonuses, OT, grandmas birthday money, etc.

If you conserve on mileage/usage on the vehicle, keep it maintained, and pay it off in 3, 4, or 5 years, then you could reasonably expect another solid 5 years or more with no car payments and very little or nothing in unexpected repair bills. Once you pay it off, you’ll feel rich!

Another option is to keep paying extra towards the loan principle until you’re not upside down. Then consider a cheaper car after you’ve saved a decent amount for a down payment. This might be a good option if you think the operating costs of the 4runner are too expensive (for example, if you end up commuting a lot more than expected for work).

 

@2021venture thank you for your advice, I am 31 and really starting to look at the future hence going back to school to do more while I can, I think sharing my situation in this forum made me look at the bigger picture and I am so glad that I did, for now since the negative equity is too high and definitely not gonna take out personal loan to cover that.
I literally just pickup up 2 shifts this week and will going to allocate that for "extra" payment

I learned a lot in this forum about finances more than being a soon to be not 4 runner owner but I am glad and thankful.

 

@McSpazatron I haven't touch refinancing as option but will to it! Right now I am about to go crazy with overtime, I work 3 12hr shift on my full time job and got a side hustle for 8hrs, if I can consistently pickup at least 1 or 2 shifts a week I can make it and go from there, avoiding the interest by paying more and sooner than the actual term might actually work. Appreciate your words!

 

This forum is mostly a bunch old men. Occasionally we get tired of yelling at clouds and something helpful falls out Good luck young whipper snapper!

 

IMO, financial literacy should be a requirement in high school. We are seriously setting up our future children to struggle the way things are going. I'm just glad I had parents that taught me but not everyone is as fortunate. Personally, the only thing I would ever finance is a house. Everything else is paid in cash. If I can't pay it in cash, I can't afford it. Keep that in mind. Just IMO.

 

Been in trucking for 40+ yrs. When these 2 young guys come to work where I did, the boss had me "train" them on their duties, they were very rough around the edges, they lived it seemed like paycheck to paycheck, making bad decisions. I'm thinking they will never figure it out. 1 day they had a plan to buy out the boss, I'm thinking NO WAY would I ever work for these guys if they ever get a business. They found a business to buy out and low and behold, guess who I work for? They are in their late 20's and they have a very responsible financial outlook, must have learned the financial stuff overnight! I hear ya about the financial things when you (and I) were her age.

 

If you’re not already, find easy ways to trim down. Every penny counts. Buy store brands at the grocery store/shop price per ounce, trim down on some coffee runs and/or eating out, buy cheaper shampoo/soap etc, be easier on the throttle to save gas, etc. Stuff like that.

My wife and I aren’t in financial distress by any means, but we’re taking some of these measures to help us stash away some cash to start to build our next house. You might not think it makes a difference, but it will. We’ve been tracking our expenses and income in a spreadsheet and it’s amazing to see what the difference is when we are more focused on abiding by our trimming methods than when we’re less focused.