You need to sell it. If it sells for less than the $18,000 you owe, you will need to come up with that difference right away to pay off the loan and get the title to give to the buyer.

It's not possible to come up with that difference, could I sell it back to the dealer and make up the difference through my normal payment with auto pay? I won't have access to my phone in basic.

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That isn't how it works. In order to be able to transfer the title the loan must be paid in full.

Nope.

You’d need a personal loan for the difference if you can’t come up with it in cash.

Maybe ask family to borrow it and pay them back?

Sell it.

That’s not a desirable car so it will not hold its value if you wait too long.

If there is a difference between the loan pay off and the sale amount, you will need to find a way to come up with that money.

No you cannot.

Would yall recommend making payments through basic, and then sell it when I have my enlistment bonus to make up the difference, it'll be 7 months before I get time to sell it.

If you can’t afford to pay the difference on the loan and can’t get $18k for it in private sale, then this is probably your only option.

Do you have anyone at home who could sell it for you? You're about to have some very stable income and be spending next to nothing for the next 10 weeks and then still spending very little in technical training.

You might be able to save up enough to pay the difference between what you bought it for and what you'll likely have to sell it for in short order.

If that's a possibility you may want to see about getting a power of attorney written up so this other person can sell it for you but you need someone you can trust.

Edit: Also, start contributing to your TSP ASAP and ensure it's not just going into the G fund. If you don't want to research or manage it manually, pick a target date fund in line with your projected retirement date.

Please don’t turn around and buy another sports car you don’t need at some absurd interest rate when you finish basic. I’d hate to see you on r/justbootthings next year. The days of the $5K used Civic are over but get something sensible and focus on building up some savings.

Have you even tried to sell it yet? Try. Based on the KBB values you posted, it’s entirely possible you break even. Don’t hold the car for 7 more months while it depreciates because you assume you’ll get under 18k now. You said KBB goes as high as 22k. It doesn’t cost you a dime to take it by Carmax or Carvana and at least find out.

Make your decisions with facts, not assumptions

Where will the car be when you are in basic? If it is parked the entire time, you may be able to lower the cost of your insurance. That should give you some extra money to make up the difference.

This could be totally unrelated to your situation, but it was my understanding that military members with loans when they get called up, can have them frozen until they return from service. Again, i could be wrong. But maybe something worth looking into? Good luck!

See what Carvana and CarMax give you for offers

No, that's not how it works. Where did your enlistment bonus go?

You can get your interest rate capped at 6% for loans and credit cards but I haven’t heard anything about freezing them completely.

Yeah, after looking into it. It looks like only if you are stationed out of country. My b.

Also your insurance is the same. Shop around over the next week and get that cheaper.

Because you have a Leon on it you will still need full coverage you should be able to drop off a couple hundred a month just from that.

I don't get my bonus until I graduate boot camp

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At my grandma's in a safe place, no one can drive it because gap insurance will not cover it.

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Does it depreciate from time or mileage? Because It will not be moving, thank you for this advice btw.

A lack of insurance will not stop a more unscrupulous family member from joyriding your car.

You’re going to basic, not prison. People use their cars when they are in the service. You will get a chance to go home. Put the loan and your insurance on auto-pay. Your expenses will be low so you should be able to afford it.

Both.

Thank you so much for the full explanation that answers some serious questions.

So I guess I need to shop around for buyers and insurance and then figure it out after I see some numbers, I appreciate the help alot everybody this has been a huge stressor on me, also how long will it take for the process to be over, I need my car until the week before basic.

It's guaranteed no one will drive it, I'm in a unique circumstance so that's no issue.

What do your acronyms stand for, and yes I have someone who could sell it. This is a good idea.

No he’s trying to get that 22% interest rate challenger after basics, he’s needs this car gone! /s

But I mean you never know, you might not need it depending on where you go.

That will be no issue I hope to never need a car again after this.

If the vehicle is financed, meaning you still owe the bank or credit union money, tell them immediately and show them a copy of your active duty orders. They must follow SCRA and MLA regulations.

SCRA takes care of the rate

Wow, the interest rates went down at the car dealerships off-base. TIL

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TSP= thrift savings plan. It's a traditional or Roth retirement account that was rolled out for service members a few years back when the retirement system was reformed from the 20yrs or nothing model. They will match your contributions dollar for dollar up to 3% and at .5 per dollar from 3-5% so that's basically free money. It's a no brainer to at least put in the 5% they'll match. G funds are one of the available investment choices within TSP. They are very low risk/low reward, so basically a bad choice for anyone who is not about to retire. They have more aggressive funds you can choose or lifecycle funds which are based on your anticipated retirement age and are a diversified mix of funds that adjust risk/aggressiveness as you get closer to retirement.

Lmao your funny. I wouldn't have got this car if I knew I was going into the service.

But for real, your best bet might be carmax. They usually offer the most. My friend used to be a car salesperson and she always told everyone to go sell their cars there and then come back to her instead of trading it in right then and there.

And good luck in basics!

Only active duty, basic training does not count as active duty until I am stationed, active duty could even get out of the loan all together.

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If you cannot come up with the difference right now to sell it, the only option is to wait until you have the funds to cover it. If you’re interest rate is over 6% then look into the SCRA and submit your orders to the loan company so they can cap the interest rate to 6%. Your recruiter could help out if the loan company needs some other documents proving your service if you don’t have your orders just yet.

Put the car in storage status with the insurance company and set up auto pay.

You won’t spend a dime in boot camp and more than likely you’ll be finished with about $1500+ after the two loan payments. It’s a rough number and I’m assuming that you’ll be an E-1.

I’m not sure where your MOS school is but some of them over a certain length allow vehicles. It’ll be up to your command and you would have to find out when you get there. There could be a waiting period to start school so there’s a chance to take leave to head back home and that might be the good time to sell the car. Unknowns aren’t fun but that’s sadly the military life. Some things are guaranteed but others will be figuring it out as you go.

Put the bare minimum insurance that is required to keep the cost down. A higher deductible may help too.

Correct, you just need to pay the difference.

Car loan with bank A has a 18k pay off

Dealer agrees to buy for 17k

You need to provide 1k to the dealer so they can forward complete 18k payment to bank A

You sign paperwork that allows bank a to send title to dealer.

The difference can be provided in cash, credit card (up to a limit defined by dealer and may have fees, ach, check (some don’t accept personal checks), cashiers check.

It's 14% and I will start as an e3 in submarine computer electronics, my school is pretty long with no break after basic. And no it's not fun this is super stressful.

Also how long should this process take for it to be gone.

CarMax is also super fast, you can usually get it done in a couple hours.

Find out what CarMAX will offer, you can do it on their website. If the price is enough then clean the car out and take it down there to sale. Someone at CarMAX will be willing to take you home, most likely, or plan on using Uber.

No.

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>Incorrect, you just need to pay the difference.

Which is what this whole comment chain is saying. If you sell the car for less than you owe than you have to come up with the difference out of pocket so that you can pay the loan in full and transfer ownership to the new owner.

You aren't adding to the conversation, you are correcting people that are correct and you are trying to say the same thing they said but you are doing it in a more confusing manner.

> You said KBB goes as high as 22k

Actually, OP said new it was 22k. They said they owe 18k and the KBB value is 15k.

Thank you everybody for your advice I will keep you updated.

Carvana and Carmax buy it on the spot. Check with them to see how much you get for it.

Were you drafted?

I've only had it since September, is it too early, could anything in my contract prevent this.

Keep the vehicle.

If no one will be driving the vehicle (family/friends) then talk to your insurance and tell them the situation. They can give you "storage" insurance (or whatever it's called), which is significantly cheaper.

Not sure if there is much you can do about the car payment. Keep the car lets you leverage your credit and begin building the credit history for future purchases.

I can't tell if this is serious or sarcasm, but no I volunteered but the reality of it didn't set in until I got my ship date after meps, I just think this car is going to be a waster of time and money once I start my life somewhere else, plus I won't need a car in a submarine.

Good thought, but being in the military alone will give me all the credit I need. What is the down side to owning the car outright and just keeping it as long as I can (beside the fact that it depreciates)?

You didn’t need a new car at your age, period. A great thing about the service is the financial counselling — take advantage of it. Learn from the mistakes of millions of servicemembers who messed up before you.

That car is selling less than $18000 now. Most dealers are going to offer you 8000-10000 for it because the used car market is crashing. Your best bet would be working with the lender and explain the situation and see what programs they have. I would recommend keeping the car, its a little short sited thinking you will not need a car after boot camp. During my A school being able to jump in the car and get away from it all at times was great. Second depending on where you get stationed you will need a car....most bases are far from public transportation.

I know I fell for a bad recommendation to go into one of these no cash down car places and I had no credit, I would not have this car at all if I knew these things,I just don't know what .y best option is now.

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You won’t need a vehicle when you’re on a sub but you won’t be at sea for the entire 2 years. You do get a break. You can store the vehicle. Yes, it was a stupid purchase but, if you can’t afford to sell it now, your option is to store it and pay down the loan. The upside is once you get access to it again, it’ll be really low mileage for its age.

Thank you that's a good point, my rate will be submarine computer electronics secf and the schools are in Groton Connecticut, kings bay Georgia, and Washington state, I'm leaving from from norfolk va.

Good points, thank you for your feedback, I have a hard time seeing the bright side something, I just didn't want to be tempted to waste my enlistment bonus, it just seems like insurance is always a rip off, I know I need it incase something happens but nothing ever happens.

I don’t know which deployment port you’ll be in, but all sorts of things can happen while it is in storage, especially if you’re on the gulf or east coast. Your insurance should drop because you won’t be driving it but it still needs to be covered for damage. Ask a mechanic what you have to do to store it properly if you can’t leave it with someone who can drive it occasionally.

I’d put it out on Facebook marketplace. We’ve sold several that way. Car max and others will cost you at least 3-5k

This is why I’d tend to keep it. Especially if you have someone who you can trust keep it in their garage and get it out and running every now and then the car should be mint, with good value still when you return from basic training.

Fixed it

The only problem is the gap insurance will not cover another driver.

Happy cake day! Also would they pay full amount or would I be like a lender, I guess we would have to go through I financing company?

Your other driver should own their own vehicle and have their insurance. If they cause damage while driving then their insurance covers the car.

It's not a lease, right? Only you know the terms of your loan, but I would be surprised if it prevented you from selling the car and paying off the loan early.

Even if it's only their car in their insurance, or do I need to put them on my insurance and they pit my car on theirs???

What is the difference between a lease and loan? And where on my paperwork would thus be specified?

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Auto insurance covers you as a driver … any car you drive is insured if you cause damage while insured and auto insurance covers damage to your car.

You don’t need to do anything except let your insurance agent know that the vehicle is in storage. If the car is going to be in storage (garaged) in another state, they need to know, too. Vehicle insurance doesn’t usually move states.

Does it make a difference if it needs full coverage because its new?

Not really. Your vehicle isn’t “new”.

Your vehicle has comprehensive on it. That part of your insurance policy pays to repair your vehicle if it is damaged. You need that even if it is in storage. If a tornado goes through while you’re deployed, the vehicle is covered (more or less).

Then there is liability coverage. That is the part of the policy that covers you and damage you cause. Talk to your insurance agent for more details.

The gap insurance is an add-on to your policy that helps you to pay off your loan if the vehicle is totaled. Soon you won’t need to keep that.

Thank you so much you've taught me more about insurance my parents or my agent ever could have, I have a hard time comprehending all of these things at once but you put it in terms I could understand, I appreciate the info very much.

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Probably have to get a loan to clear up the title. I wouldn’t hold the car while is was deployed. Cars are gonna go down more

If you decide to keep the car contact your insurance about putting it in locked storage. I did that with my kids car when he went in the air force and he saved a fortune on insurance while he did basic and tech school. It was under $50 per month but he had liability coverage.

You might want the car at your Tech School

You spend $800/month on a Mitsubishi Mirage…. Why would you ever do that?!?

Wherever your payments go to you can view a copy of the promissory note and that would tell you it's a loan. If it's a lease then you will have access to the contract from wherever your payments go to and the contract would tell you 'lease' or not

Are you with USAA? Most of their customers are service members and they can advise you as to what to do as far as insurance. When we shipped our car, they had us drop the standard insurance and we only payed a fraction. You could do something similar for the months you're not driving it, during basic and when underway.

Awesome. Did he use it enough afterwards to justify keeping it?

Ok, I hope I'll be able to justify keeping it.

What do you suggest? And also because I was a first time credit user.

Awesome I appreciate that.

I'm with geico and I'm still a young male so my insurance is normally expensive.

I don't know when you can join USAA, but I'd try them. Because they work with service members they can probably get you a better deal, also look at refinancing through them, I think you mentioned a 14% rate? They might be able to beat that, and knowing that you'll have stable income for the next few years makes a difference in rates.

Not buying a new car, ever. With few exceptions buying a new car is a waste of money. You eat all the depreciation. If you sold that car tomorrow it will have cost you $7000 + paid interest. Even in this market you could have found a used car for $10k that will run for years with minimal maintenance.

Buy used. Let someone else pay the depreciation. A new car is an unnecessary luxury.

Where can you store the car, is it in a private garage or is it on the street?

If it's in a private garage, in many states you can file an Affidavit of Non-Use with the DMV, so you do not have to maintain registration and insurance on the vehicle. Then you can contact the insurance company and cancel the insurance policy. Leave the loan payment on AutoPay, and you're good to go.

If the timing wasn’t so short notice, you could get a lease and put that negative equity onto the lease and turn it in when you get orders under SCRA.

You need to go to legal services on your base and get them to use the Service Members Civil Relief Act to lower any of your preservice interest rates. Also talk to a financial counselor at the service center on base to get advice on retirement and your TSP as mentioned. I would use USAA or Navy Fed as a bank as well.

I am in the military, doesn't give you any credit. For the most part the credit agencies have no idea what your profession is, nor do they care. When you request to get a loan they ask how much you make and that, along with your credit, is how they determine how much additional obligation against your credit they can take and give to you.

There are multiple factors to your credit, and one is a history of paying your on your credits. Starting that early is a good thing, although the car payment is probably not the best way to do so.

It's a lot better to get rid of it. Then you're not paying interest on the loan and also riding the depreciation curve on the asset value. You'll have more money in the end if you do it that way than paying for a car you aren't using. But yeah, if you can't find enough to cover the difference via a reasonable interest loan then you have no choice.

Oh yeah. He kept it for probably 6 years. Once you get through boot and your advanced training you'll have its of time unless you're deployed. Just keep some sort of insurance coverage forever. If you ever stop it all together you'll come back as high risk and it is ridiculously high.

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$350/mo insurance.

My mind boggles...

Both but KBB is slow to react to market changes and this has been a very hot sellers market. Call Carvana/CarMax/whatever is in your area and see if anybody wants it.

Just because KBB says $15k doesn't mean that's what you can actually get. Look around and see what a comparable car would cost.

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Spend half as much on the car with half the interest rate.

Keeping a car they don't need and won't drive is a much worse financial decision than selling it for a loss.

Young, single guy … seemed reasonable

D’oh. It was too early for me to be reading correctly

I’d still get a quote before trusting KBB in this market

So once I refinance with someone else, they take over my loan all together?

Of course I know that after a bad recommendation from someone I trusted. I totally agree, was a really bad move.

But it was in the contract that I maintain full coverage?

I appreciate the info. I'm pretty sure I have to graduate boot camp and be stationed first tho.

Yeah definitely not. Just happened to think I needed a car at the time little did I know I could live without one.

How long am I required to have full coverage, is that something that would have been worked out with the dealership and the loan company?

Check with your lender for what is allowed, you may be able to change the insurance policy to a "storage only" policy in that case.

Awesome and to answer your previous question it will be stored in the middle of a field way out in the country at my grandma's house. Far away from anything.

not true, you sign for it, you make payments & keep at least storage insurance at all times while vehicle is registered & financed.

I shopped between 3 companies and geico claimed this was the best they could do, do I need to be more aggressive on the phone with insurance?

You’ll get an opportunity to talk to both USAA and Navy Federal banks while in boot camp, they allot specific time to set up new banking/work on existing things! You can ask them about refinancing at that time. Also, once you get to your duty station you can ask about a new insurance rate through USAA.

If you have the opportunity I’d keep the car for A school depending on where A school is located. A lot of a schoolers with cars actually make out well because folks without cars pay them to give them rides and such. A lot of rides share services still don’t have base access.

Honestly if you’re less than 25yo, that number would be reasonable/considered average. Have you been in any accidents ever (while you were driving)? Any speeding tickets? That would drive your rate up as well.

Thank you for this info, single handedly the best advice I have received on this post.

I'm 25 in VA, I've had accidents and tickets before but right now I have nothing that shows up on my driving record and I have +5, progressive wanted 550 for the same deal I'm getting with geico.

So yeah, your insurance rate is reasonable and you likely won’t find anything cheaper in the near future. If you keep a clean driving record for the next year, you can contact your agent again to see if they would reduce the rate then.

Before I got my liscence I was under the impression that a males insurance didn't go down until 21, then when I turned 21 I learned it was 24, when I turned 24 I learned it was 27, will it ever go down for good?

Only if you maintain a clean driving record for good

Dang it, no more temptations for sidewalk driving or bumper cars?

The magic number used to be 26. When I turned 26 my insurance dropped like $1000 a year.

Keep your nose clean though, your insurance company cares what you've done longer than the police do.

Thank you for light at the end of the tunnel, I hate insurance so much, I was always told nobody wins until there is a total loss. Little scared to take that risk...

MONTHLY?!

Definitely, KBB is a good place to get a rough idea of value. But I have had cars where I got way more or way less than KBB estimated they were worth.

No you'll be required to keep full coverage as long as you have a lien on the title. (until your loan is paid)

That's more than the insurance for a Ferrari I used to own.

What kind of research did you do on vehicles to make you land on a Mitsubishi in 2023?

You could've got an older loaded mint condition Toyota for half the price with pretty much the same amount of life left and 4x the performance and quality.

For you, my friend, 22%. It's half off. I'm losing money here but I can tell you're smart and a good person so I'll make this deal for you

It's definitely just the accidents and tickets. I'm 27, totally clean record, I drive a truck with a value of around 25k my insurance is like $120.

Assuming US, the draft ended in 1973.

Basically, you call up the new place, say hey I've got a shitty loan, can you beat it? They say yes or no. If it's yes, they basically pay off the old loan, and you pay them now, hopefully with a better interest rate. Might cost a fee, but if you can't sell it right now, then this will at least save you money in interest and lower your monthly payment. You could still pay it down enough to sell it, but it's up to you. Doesn't hurt to call.

Why would you buy a new car in September with plans to enlist? This is not logical. Adjust your thinking going forward so that you can get ahead in life.

Enough to find out that I would not be approved anywhere else for anything else, it's America's cheapest new car. An the fact that I did no research and listened to the nearest 40 y/o meth addict....my judgment on thus sucked.

Ask your recruiter for your orders to basic, once those orders are cut and official you can feed them to your creditors (car loan owner, credit cards, banks, whomever you're paying interest too) and they are legally REQUIRED to lower your interest rates under SCRA. If they do not then you can get your legal team involved during basic. Usually this process is all automated now if you have orders, or is a short 5-10 minute phone call.

The savings in interest could make it worth keeping the car. Honestly though probably just sell and keep expenses low while you're getting laid through basic and first duty station.

Take the advice above and start contributing to your TSP (Thrift Savings Plan) as much as you can afford. Roth and traditional options are available and it's a great plan for all service members.

Figuring out a new car was a scam was my final straw to make me want to join, I want financial dependence and the guidance to make the right decisions. I'm tired of being a stupid civilian.

It depends on your area too but a lot on your age and keeping a clean nose. Don't get tickets, they're easy to avoid.

In my mid '40s, 2 drivers on the plan, 3 cars, something like $1500/yr living out in the country. It definitely gets better.

That is good to hear that you are changing your money mindset. I would just continue making the minimum payments for now. Once you receive your enlistment bonus, pay down your loan to what you can sell the car for. Then sell your car.

That's actually pretty good, yeah I don't have a problem either simply obeying the law, it just seems like it's going to take forever for that to get here.

I think this is going to be my best option and also the last time getting a loan for anything, I'm ready to simplify my life, I can't wait for the options I get from the military, thank you for your suggestions. I hope I never need to make a post like this again.

Be careful what you wish for. 26 was a hard year for me, I'd already gotten married, passed the drinking age, voting age, gotten my license. Getting cheaper insurance was the last age related milestone I could see...

That's OK how much better could I really get, I belive the next milestones would be prostate exam and aarp magazines?

Life is pretty melancholy regardless the age it's like lettuce it's already pretty bad but gets worse with time.