That just means the Truecar price is too high. I don't trust it anymore.
IMHO most people aren't comfortable with negotiation so Truecar can make them feel like they're getting a good deal (which they are) but not the best deal. That's OK because then I can get an even better deal
I wish I could negotiate every "major" purchase. I negotiated the price of the TV I bought in 2010.
or roll in the negative equity into a cheaper leasing option & basically just keep paying what I am now, only on a leased car for the next 3 years. Both seem dumb to me because this is Jeep's problem & they didn't take care of it in the first place. Bah.
I never understood the part of about being upside on loan. That has nothing to do with the vehicle and everything to do with the loan. One should never confuse the two. Financially, using extremely simple calculations, it makes zero difference on your bottomline whether you had paid the vehicle in cash or you are making payments when you are making decisions about getting rid of a vehicle. Obviously, interest payments skews the calculations but never in your favor unless the rate was negative!
Even engineers who should be smart enough to recognize this don't get it.
There's some variability to it; buy a vehicle with high depreciation and don't put much down (or roll in negative equity) and you're there. Likewise, take out a long (I hear there are 8 year loans now?) and you'll likely be in that situation too.
Basically, if the finance guy tries to sell you GAP insurance you know you'll be in that situation.
No, they have effectively made it your problem. Corporate entities tend to do that to average working folks. Lemons are bitter. At this point it is unlikely that the car will ever function correctly. Rather than stew about it, take the advice I gave you and ditch it. Life is too short to worry about an easily replaceable item like a car. I hate to sound like a salesman but you could, literally, be driving away in a new car today.
If it makes you feel better. It's still money out of your wallet either way. I'd just do it now and be done with it.
Yeah. The tough decision is the financial part. I either shell out $4k cash or roll it into another car. The best way to do that is to get a cheap lease & add the negative equity in, which would tack on probably another $100/mo, but the overall payment would still be doable because it's not financed, so I could probably end up with a cheaper lease payment overall than what I'm paying now.
Although, winter is coming up, and it's awfully nice having AWD/4WD in the snow, so I may stick it out through the cold months & pay it down until sometime next year when the trade-in difference isn't quite so steep.
It's simple math. Sample numbers, but for example:
1. $25k car new (first-year model of this car, no used options available at the time)
2. Basic 5-year loan @ 2% with $0 down = $450/mo payment
3. Paid on it for 10 months = $4,500 paid = $20.5k still owed on loan
4. KBB values the car at $16.5k (2015 with 10k miles on it)
5. $20.5k left - $16.5k trade-in value = $4k still owed
If I do lemon-law through the state, I will get market value, so I will have to eat $4k. If I trade it into a dealer today, I will have to eat $4k. Depreciation on new cars stinks if you have problems with it & can't get a dealer or legal solution for it. I just checked KBB for a newer 2016 Renegade in excellent condition with 1 mile on it...$16.5k, same as my used model with 10k miles & a year older, so you get whacked even if you simply drive the car off the lot. My original goal was simply to have Jeep swap it out for the same model, but a working one - denied. Then to have them give me credit to buy a different model under the FCA umbrella - denied. Third-party arbitrator - tried contacting for a month, no response. Lemon-law attorney...they gave me the scoop on what I could & couldn't do & what I would end up with, which right now isn't good. At best, I could swing the "more than 30 days in the shop" angle & get market value. My goal was to get the full loan paid off through the attorney (or even better, get the full original priced paid). So at the moment, I'm either stuck with it, or I can get rid of it & eat $4k.
That was the point I was trying to make. He will loose (or have lost) the same amount of money even if he had paid cash for his purchase. I am not sure if he has grasped that fact.If it makes you feel better. It's still money out of your wallet either way. I'd just do it now and be done with it.
I'm also not done with the legal battle yet...I'm still determined to find a way to make Jeep pay for this. Sold me a dud & didn't stand by their product. So lame.
The problem with this calculation is that if you wait until your trade-in matches what you owe, you might be paying the same $4k or potentially more... and you're in an unreliable car during that time.
For the sake of easy calculation, 10 months down the road you'll have paid another $4500 on the loan. Will you be at the magical break even point then? You've still paid over $4k to get to this point and you're not even in a car you can trust during this time. The only question is do you want to eat the $4k now or spread it out over 10 months? In the end you're going to be out the same money.
That was the point I was trying to make. He will loose (or have lost) the same amount of money even if he had paid cash for his purchase. I am not sure if he has grasped that fact.
The following items need to be looked as independent of each other
1) Purchase price
2) Financing
3) Selling
4) Buying another
5) New purchase price
6) New financing
But if you are used to only looking at monthly payment number, you get taken by the car industry.
you would have to factor more depreciation for waiting another model year as well, right?
After she opened a Lemon Law case with the Department of Consumer Protection, Chrysler made Salazar an offer, but she declined, took them to court and won her case.
Chrysler is paying off the remainder of her car loan, which is a little over $29,000.
The court estimated she got about $17,000 of use out of the car before it was considered a lemon, which she already paid.
This thing sounds like a nightmare. I'd be willing to eat the $4k and move on with life... it's a tough one though.
In an email sent to Salazar, Chrysler offered to buy back the car for just under $34,000, which means Salazar won’t be refunded the $5,000 she already put into the car.
She rejected the offer and has opened a Lemon law case with the Department of Consumer Protection.
According to the formula DCP uses in lemon law cases, Salazar should only have to pay $286 towards the vehicle for the time it was working, not $5,000 but DCP said that is pending the conclusion of her case.
Chrysler is paying off the remainder of her car loan, which is a little over $29,000.
The court estimated she got about $17,000 of use out of the car before it was considered a lemon, which she already paid.
“Glad we could help her out during this issue. We wish Chrysler would have acted in a more expedient manner but we’re glad it finally came to a resolution,” Jonathan Gengras said about the decision.
NBC Connecticut reached out to Chrysler for comment.
"FCA US LLC had negotiated a buyback with Ms. Salazar but she objected to our mileage offset and thought she could pay less by going through with the arbitration. However, the arbitrator in fact came back with a decision requiring Ms. Salazar to pay more of an offset than FCA originally offered," the statement says
...
Salazar did received about $3,100 back for other fees associated with the purchase of the car.