Negative Equity
 

Ok guys heres my problem, I have a 2000 Dodge Ram that gets 12 mpg and I owe 17k on it. The blue book on it is just over or under 12k for trade in worth...

I guess what Im asking is, how many of you have dealt with negative equity like that before??? As long as I dont pay more for an 8 than the MSRP would be Im ok.

And before you ask, the MPG does make a HUGE difference because I will be going from Maine to Virginia at least once a month and 12mpg gets to be expensive. And I still have the means to get a nice car so while the 8 doesnt have the best gas mileage it still is leaps and bounds over my Dodge.

Oh yeah and I have access to the S-plan as well. Any strategies or help??

You might want to try selling it off yourself rather than trading it in. On the other hand, it doesn't hurt to drive by several dealerships and see what kind of deals each is willing to give. Some dealers will bend over backwards in order to make a sale happen.

when i was younger i was in the same boat your in now. it was a hards choice but i had to bite the bullet take the lost and be more careful in the future. the down side is if you wait 6months to do this you will have lost more on the dodge.

actually I just learned that about the Dodge. I was looking to buy 5 months ago right before I left for Italy (where I am now for 3 more weeks or so) and figured that with the truck not being driven, the mileage would help for trade-in... Yeah that was true, it did help, but 6 months later the truck is worth 1k less than I saw last!!!

As for selling it myself... I cant work that because I wouldnt be able to sell it to someone for what I owe and I cant come out of pocket for 3 or 4 grand...

I know I want an 8 with MT, NAV, Touring, Appearance...

From what Ive been gathering here, with the S-Plan and some serious effort you can grab that for around 30k... add my 5k negative on there and im at 35k... Retail on an 8 like Im talking about is right at 35k so hopefully financing would work in my favor. Still looking for any more thoughts.. Thanks guys you are a great help so far!

I bought mine (6spd, sport package, no other options) off of S-plan a month ago. Cost me 26K+TTL. I skipped on the Touring and GT packages. I was swayed by an opinion on this board that since they all have the same HP and more than adequate handling (sticking within the trans type anyway), everything else is comfort. I decided what comforts I wanted (xeon headlights and DSC) and that decided it for me.
I also took into consideration that some of the other "cool doodads" could be added later (MP3 player, spoilers (I want the euro lip one), skirts, etc....

Don't forget to add taxes, title, etc, to that number. My 8 listed for $35,400 and on the road it was around $33,500. The s-plan discount made my car near $32,000 before taxes, so it sounds like you are still going to have to come up with a few extra grand to do what you want.

Good luck and don't forget you will be upside down in the car too.

Its a vicious cycle. I will never be right in this truck until its paid for, A LONG TIME FROM NOW.

So I guess its a matter of being upside down 5k in a 2000 Dodge Ram or being upside down 4k or so in a new RX-8... hmmm

Tough call.

Why cant someone just run smash into my truck and total the damn thing so gap insurance can do its thing... :mad:

Careful what you wish for, cause you may be in it when they hit it.

But I also would rather be upsidedown in the 8 than the dodge.

I really think you should just suck it up and make some extra payments on the truck until you're not upside down. The gas mileage really isn't going to make that much of a difference, and being upsidedown in anything is a really bad financial move, ESPECIALLY for someone as young as you. The 8 may look good now, but if you take a $5k loss on the truck, you're going to be a lot more than $4k (more like $7-8k) upside down on the 8 for a loooooong time. I don't think anyone is paying $35k on the 8, any more, even fully loaded. And you're going to lose at least $2-3k in value the minute you drive it off the lot, no matter what. Trade in on a fully loaded 8 is only about $27-28k, at the most.

Here's an idea for you:

find a private buyer for your truck and ask the Mazda dealer to courtessy trade it for you to save on taxes. Both dealers in my area readily agreed to courtessy trade my Mitsu on an RX8 as soon as I find a buyer...

If you drive a lot and the cost of gas is a concern, maybe you should consider a Mazda 3. At least if lose part of your rear end on cutting loose of the Dodge, the Mazda 3 will be less of a car payment, less on insurance and sips gas. Most guys on this forum are only getting about 16 to 19 mpg out of their RX8s. How did you get so upside down on a 2000 truck anyway? Never mind Josh I am starting to sound like your Dad.

you guys are great!!! Im getting the feeling that everyone seems to think that Im 16 years old or so...

Anyway I got so upside down in the dodge because I was a fool 2 years ago. Now gas mileage makes a little bit of a difference when you start thinking about that Maine to Va. trip I make once a month...

at 19mpg itll cost me 200 dollars for a round trip to VA and back

at 12mp it cost me almost 400 dollars round trip...

Starting to see a difference??? Once a month I am dropping at best, 100 dollars extra in gas in this hog..

Keep the help coming guys, I appreciate it.

I agree 100%. So you save $100/mo. in gas. Big whoop. You're losing $5,000!! It would take four years of RX-8 gas mileage just to make up for the hit you'll take on the Dodge, and by then, the 8 will have lost a LOT of its value, too, so you will have taken that depreciation hit as well.

I'm sure you want an 8. I do too! :D But this is a very financially imprudent decision.

No one buys an 8 to save money on gas. You buy it because you desire it, and that's cool, but don't rationalize it by claiming better mileage. Your Ram has already taken most of its depreciation hit. Over the next two years, it will go down very slowly. I'd wait until I can afford to sell it privately for what I owe on it, then go buy the RX-8 Turbo, or whatever's out at that time.

Read this guy's post.

T.