If you have financed a vehicle, chances are that you are upside down. What does that mean? It means that you owe more on your car loan than the vehicle is actually worth.
This can be discouraging to think about, however, it is not the end of the world. It is possible to get rid of your upside down car, although it might take some work on your part.
5 steps to sell your upside down vehicle
1. Determine the value of your car
Go to Kelley Blue Book and search for the year, make, and model of your particular vehicle. Once you have done this, then select all of the options and add-ons that could increase your car’s value like power seats, sunroof, premium wheels, etc. After that, choose the “Sell to a Private Party” option because you will get more for the vehicle that way than if you traded it into a dealer. Lastly, you will pick the condition of your car.
Make sure that you read the description of each condition thoroughly as the majority of cars fall in the “good condition” category. Once you have done all of this, you will see an
estimated value of what your car is worth.
2. Verify that value
Although Kelley Blue Book is a reliable site, it is not always accurate. The true market value of your car could be different and the best way to find out if this is the case is to do your research. Go to Craigslist and search for the year, make and model of your car in your area. Look at least 3 of the listings and compare their mileage, features, and condition to your vehicle. This will give you a better idea of what you can actually get for your vehicle.
3. Figure out how much you are upside down
Call up the bank that holds the note on your car and ask them for the payoff amount. They will give you the exact amount that you owe so that you can determine how much you are upside down. For example, if they tell you the payoff amount is $15,000 and you have determined that the true market value of your car is $14,000, than you are upside down by $1,000.
4. Come up with the difference
There are many ways that you can come up with the difference. The first way is to sell stuff around your home that you don’t need. Some items that sell well are things like old cell phones, textbooks, designer clothes, and electronics. You might be surprised at how much stuff you really could sell to come up with the difference.
Another option is to borrow the money. This is not the most ideal option, however, it is better to owe $1,000 than $15,000, wouldn’t you agree? With services like peer-to-peer lending, it should not be too difficult to find the money you need by going this route.
You can also consider getting a second job for a short period of time. Consider a job like delivering pizzas or serving at a restaurant, as these kind of opportunities are generally part-time positions that are outside of normal business hours. This way you can still work your full-time job and the two won’t interfere.
5. Put your vehicle up for sale
Once you get to the point where you have a buyer, the process is fairly simple. The buyer will write a check to the bank that holds the note for the payoff amount and you will write a check for the difference. And there you have it. That is how you sell your upside down car and begin your journey toward being debt-free.
In select areas of the country, you have services like Carphoria.com, Carlypso.com, and CarLotz.com. With the latter one, you pay to put your car on their lot. It’s almost like a consignment shop for cars instead of for your clothes!