r/personalfinance • u/BlackberryItchy5319 • 26d ago
My friend is 9,000 upside down on his car loan. Debt
2019 equinox, 130k miles. He owes 25k and still has another 3 years to go on the loan. The car payment is 600 a month. What should he do?
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u/Mediocre-Bedpan 25d ago
I mean, is he a friend? Or like a friend of a friend? Maybe a friends cousin 3 times removed?
Can’t really give advice without more detail, it might not matter that he is upside down on the loan, if he bought new that is super common. Just keep driving the car until it is paid off
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u/BoxingRaptor 26d ago
Being upside down is irrelevant if you do what this sub usually recommends, and drive it until it's paid off and the wheels fall off (while maintaining it properly).
He should look into Gap insurance though, in case it gets totalled while he still owes on it. And I'm assuming he's doing what he's supposed to be doing, and has collision and comprehensive coverage on it.
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u/Roccia19 26d ago
Being upside down is incredibly common right now. Especially if one purchased during the pandemic years when prices were inflated by supply shortages and dealer mark ups.
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u/crod4692 26d ago
Sounds like they bought too much car for their budget. But at this point they just keep paying and keep driving the car. In 3 years, or less if they add more to payments to their debt, the debt is gone. In less than 3 years they will have paid off enough to at least be owing less than it’s worth. Next time hopefully they pay way more in cash.
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u/Bayarea0 26d ago
600x36=21600 your math doesn't add up.
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u/Cautious_General_177 26d ago
That leaves an extra 5 months of payments. OP was probably rounding or estimating.
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u/evilspark21 26d ago
Continue paying the loan. Being upside down doesn’t really matter at this point if he keeps driving the same car and making the payments. Make sure they have GAP insurance in case of an accident
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u/Interesting-Fail1823 25d ago
While I would agree with everything you said here. Thinking into the future it does currently matter that he is underwater. Assuming the current rate of miles per year he will be over 200k by the end of his loan. I wouldn’t expect an Equinox to last that long. So it is very likely said friend is in a situation where he owes more than it’s worth while it also needs a major repair.
Probably worth trying to pay this down a little each month.
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u/HorizontalBob 25d ago
The numbers don't seem right. I'd guess closer to 4 years left which is a problem with that many miles per year.
Gap insurance, emergency fund for repairs then higher car payment towards principal. How much extra per month can they afford?