Thread: Doozy of a car loan problem

Alright, this is my first post, it's to be a long post, and present you all with quite the dilemma...

Here's the situation. A couple of years ago, I purchased a new Honda Accord EX V6. I got a little bit off of MSRP and traded in my old car, which by this point had just over 200,000 miles on it. I drove that car for a few months, and it was stolen, and recovered several weeks later, 2 states away in a ravine, burnt to a crisp. (Oddly enough, it was missing it's wheels...) I neglected to get the supplemental GAP insurance, so I was forced to buy a new car with the problem of negative equity, to the tune of about $5000. After switching insurance companies, I bought a new Dodge Magnum R/T. Nice car, great power, good rebates, and coupled with the attractive finance rates, a seemingly good deal. Of course, I did have to add on the negative equity, which Chrysler Financial was kind enough to agree to, based on my credit score of 785.
Now, two years later, I've received a transfer for work, requiring me to drive over 150 miles a day. That kind of commute and a Hemi do not mix well, so I elected to trade the car in on something a little more economical, said car being a 2008 Toyota Camry.
Here's the kicker: The depreciation on the Magnum was absolutely horrendous. I now had $14,000 in negative equity, but I needed something that would not cost me $200 a week in gas. I put $7000 down on the Camry, and got out the door with a new '08 for just over $30,000.
60 month loan with a payment of $640. Apparently, somewhere along the way, my credit score went down because they said I no longer qualified for the top tier rates, due to the negative equity I was financing, despite the down payment.
Okay, now 2 months later, my wife has been out of her job for 1 month 3 weeks and I'm paying ALL bills in the household. I'll admit, she made a lot more money than I do, so we've got a fairly high mortgage, and her car payment on top of other houshold expenses...
I simply cannot afford to make the payments on the Camry AND all the other bills we've got. We drained our savings account in February when we bought the house, and it hasn't built back up yet, so that's not an option.
Toyota Financial isn't willing to work on a solution at this time because I'm "not yet 30 days delinquent, and even so, with the account so new, there's not much we can do for you." I tried to trade the Camry on an older, 2002 model, but that $7000 financed negative equity has now become more like $10,000 and that's the price a 2002 Camry is selling for, so they won't approve double retail value, and I can't blame them. It was suggested I trade it in on a more expensive car, in the hopes that by the time the first payment is due, my wife will be back to work, but if that's not the case, I don't see how that will make life any easier. I had one dealership suggest I just let the Camry go back to the bank, and buy a new car with NO negative equity before the repo hits my credit bureau, but... No, I don't think that would work out very well with my conscience. I feel obligated to pay this loan, but I don't see any options for me. I quite simply do not make enough money to cover expenses, and I am under contract to not have a second job, so that isn't an option, either.
Further, there's not enough equity in the house to get a home equity loan, combined with my income alone, which is in the $30K range. (We tried that.)
For demographic purposes, we're both in our 20's, college grads with no children.
Suggestions? Help?

What else can you sell? Sounds like you need out of the bad deal and maybe it's time to think about what you can actually afford on a consistent basis.

20/20 hind sight you should have put that $7000.00 down on the camery to pay off the negative that you owed for the car being stolen or kept the magnum and just paid the $200 a week..but what is done is done.

I think if you were to try to get a more expensive vehicle would just be down right stupid/reckless..what if your wife doesn't get a job? Then you would be worse off then you are now. I think your only option is to turn the car back in to the bank and you will have to pay all the negative equity that you have rolled into the car. Or if a return will not work, take out a personal loan to cover the negative equity and sell it out right or to a dealer. You then would just be stuck with a 10k loan rather then a 40k loan. then with the extra money you are going to be saving, I think you should just buy a used cheap car (5k or less) go back to basics just to get you by for a year or so until you are back on your feet. If you do not handle this the right way, you could be looking at years of credit punishment for a couple of bad choices.