Driver stuck with vehicle / loan?

[Cokiee]

Hi guys,

 

have got a theoretical scenario which i've recently heard of someone being in - it's not anyone i know, so purely academic purposes, and seeing if anyone has any ideas.

 

So car owner currently has a vehicle, with a 50k car loan left. Take for example he's paying 1K a month. He feels that he can't afford to pay this monthly installment now, and wants to reduce the amount he pays monthly. Repricing is out of the question, as the market is homogeneous.

 

He inquires as to the price he can sell the car at. Unfortunately, it fetches a bid of say ... 25K. He doesn't have sufficient cash to cover the additional 25K, even after selling the car. However he doesn't mind paying off the 25K in (lower) monthly instalments. 

 

What are the options open to him in this case? I know that taking a personal loan - assuming his income can support - is one option. 

 

[Thaiyotakamli]

Drive uber and gain extra income.

[Cokiee]

So unfortunately he doesn't have that option currently - is there a way to dispose of the car to reduce the loan amount?

[Ysc3]

previously banks were offering refinancing for car loans .... dunno now still have or not. but i think they will still stick to the lifetime of the car as the tenure.

[Chucky2007]

Have the person explore Pay $90 to sgcarmart for premium ad, post some nice pictures and sell himself? The asking price of dealer is 30-50% lower than sell yourself

[Philipkee]

One more thing to add. When was the car bought? Recently? Cos coe is "low" now. Does he hinge on coe rising soon?

 

My point is that if he feels coe is rising soon then he just wait a bit more before selling the car as @chucky2007 suggested. Cos the selling price for his car may go up next year so might be worth it to sell next year instead of now.

[Enye]

whatever "other" options available, he will pay more in terms of financial penalties than just simply selling and covering the 25k gap in cash

 

borrow from cscbb maybe

 

 

[giraffey99]

1) Sell the car to minimise loss. Sell direct instead of through a dealer may help.

2) Consider loan refinancing espevially if the current intetest rates are high

3) Consider doing grabhitch.

[Cokiee]

1) Sell the car to minimise loss. Sell direct instead of through a dealer may help.

2) Consider loan refinancing espevially if the current intetest rates are high

3) Consider doing grabhitch.

In the scenario I heard the owner is trying to do (1). But how does he sell off the car when he doesn't have the lump sum to top up the difference to clear off the loan?

[w7_lee]

I believe will have to sell to used car dealer.... if the dealers wants to take the car

They will clear the finance for him and he pays them back slowly.

 

I think one of my friend did that when he got retrench (many years ago).

Edited October 10, 2017 by w7_lee

[Kusje]

In the scenario I heard the owner is trying to do (1). But how does he sell off the car when he doesn't have the lump sum to top up the difference to clear off the loan?

 

Drive to JB and declare lost 

[Kusje]

whatever "other" options available, he will pay more in terms of financial penalties than just simply selling and covering the 25k gap in cash

 

borrow from cscbb maybe

 

 

[currypuff]

He have to call his finance company and explain to them that he cant afford the installment and has found a buyer who is only willing to take in at 25k. Propose to the bank the amount and no. Of instalments he will pay to the finance company after he sell of his car. Eg: outstanding loan =25k. Propose to pay 500/mth X 50months

I have done that many yrs ago. Afterthat, i decided to only buy without loans

[Stratovarius]

Hi guys,

 

have got a theoretical scenario which i've recently heard of someone being in - it's not anyone i know, so purely academic purposes, and seeing if anyone has any ideas.

 

So car owner currently has a vehicle, with a 50k car loan left. Take for example he's paying 1K a month. He feels that he can't afford to pay this monthly installment now, and wants to reduce the amount he pays monthly. Repricing is out of the question, as the market is homogeneous.

 

He inquires as to the price he can sell the car at. Unfortunately, it fetches a bid of say ... 25K. He doesn't have sufficient cash to cover the additional 25K, even after selling the car. However he doesn't mind paying off the 25K in (lower) monthly instalments. 

 

What are the options open to him in this case? I know that taking a personal loan - assuming his income can support - is one option. 

You've already mention the best solution, that is to take personal loan.

 

Refinancing is another option. The interest rate is usually lower. But you are paying more at the end of the day.  

[Kyrios]

Convert to OPC? Reduced road tax plus LTA gives a tidy sum of 2.2k per year if Im not wrong..if Iam not wrong..

[Ahbengdriver]

Trade in for a picanto or chevy spark?

[Victor68]

I thought MAS has this protected so that you wont loan more than the collateral? It never happen to HDB leh hahaha

[Toeknee_33]

I might be wrong, but I think this scenario is unlikely to occur in the first place. The equity of the car is unlike to fall so much faster than the loan balance.

 

Unless loan quantum at or above 100% at very high interest rates, matched with a car that has really awful resale value.