Originally Posted by
catatonic
NEVER GIVE THE VEHICLE BACK.....that's just horrible advice, and you'll get shafted so hard that not doing anything and simply paying for the vehicle you can't afford would be a better decision in the end.
The best option is selling the vehicle off privately, then paying the full loan off ASAP....sell whatever you have to for this to happen. If you default when someone else owns it, you can expect not just civil issues, but possibly criminal issues as well....so pay it off quickly.
(edit): by the way, the only wsay to get upside down on a car purchase is to have the loan extended to reduce monthly payments (depreciateion exceeding rate of payment). If you cannot afford the car under a normal duration loan, don't buy it. I know it may sound harsh, but this is one of those rules that if followed, you're pretty much ready when the crap hits the fan.
IMHO most cars loans go upside down pretty quickly due to accelerated depreciation...look at the dump in market value of SUV's when gas peaked at around $4 a gallon. Even with a 20% down payment and a 48 month loan people were upside down. Also rolling over old loans into a new loan will get you upside down pretty quickly.
FWIW I typically pay cash for a gently used vehicle rather than buy new, the greatest deprecation of most new vehicles is in the first year or two, then, unless there is outside influence it pretty well stabilizes over the remaining life of the loan. Best bet is to pay cash or take out a very short loan and DON'T BUY NEW! Let someone who can afford it (or thinks they can) take the depreciation hit.
Aaron
