met with my pet salesman this week about trading the Cobalt for the Sonic. He wanted me to bring in the original contract from the Cobalt just to see what the fuck was going on. He called the finance company for the payoff and basically told them that in his 25 years of selling cars, he had never seen a company so completely fuck someone. Anyways, i need to get out of this payment. It's too big. It was always too big and now that things are getting even more expensive than they were, it needs to go.

Here's how it's going to go.
I'm getting $6800 for the Cobalt on trade.
I am taking a loan off my retirement (401k) for $5500 to pay off the bullshit difference of the car. By that, i should only owe a shade over $7000, but this company and their shady arithmetic are indicating that I owe $12950 on the car.
So, I will be able to go the credit union I belong to and finance cleanly the sticker price of the Sonic with no rollover or negative equity left from the Cobalt. My payment (and we ballparked this using a high interest rate of 7-10%) would be around $375 a month, which is HALF of what I am paying on the Cobalt.

Opinions? Cautionary tales?
Speak now, because in a couple of weeks, I am going to do this deal.

I think thats a smart idea considering the schmuckery of what loan you have. If I had the time I would take legal recourse to the loan issuer to get them to stop being an ass.

yeah carloans can be fucked up, when i bought the sunfire even after my GM employee discount and 0% financing i was paying 250$ a month, ive seen crazy shit with carloans, i was glad when i bought the truck in financed on my own with the bank.

I'd go for it. While I don't normally agree that buying a new car is the best way out of debt, but your case sounds like a particularly bad one. It sucks that the worst you can do to the finance company is make the loan a little less profitable by paying it off and terminating it.

As for the car, I've got to say that I feel the Sonic is leaps and bounds better than the Aveo. The one I looked at was bolted together as nicely as my $23,000 Astra. I didn't take a test drive, because it's smaller by a good margin than our Astra and it would have been a waste of time for everyone. It's Macpherson up front with a torsion beam in the rear, right? That's not a bad setup for a light car to be honest. Are you getting one with a turbo?

i am ordering the LTZ trim with the 1.4L Turbo/6speed manual. I haven't decided if I am ordering it in Inferno Orange or Victory Red.

Sam, this is the ONLY time I would ever suggest this, but after selling cars at Toyota, when you have a loan situation that fucked up, you could lease yourself clear of it in a couple years. You would have to bite the bullet and get something with better residual value than a Sonic, but you could roll your Cobalts negative into a lease agreement on a SUV of some sort and knock your payment back a couple hundred and be done with the entire situation in a couple years. Then you could get what ya want on your terms. I can't see a $300 plus payment on a entry level car, even a decked out one, being a good idea.


Dude, I promise I'm not being an ass on this. Just don't want to see ya fall into a similar situation again.

I thought GM doesn't do leases anymore?
I know Chrysler still does.

Pretty sure they brought them back last year

What are the terms on your 401k loan? You have to add that to your payment. If you're dead set on borrowing from your 401k, I would pay off the coablt entirely and drive it until the 401k loan is paid off. Then you have the equity in the Cobalt plus any cash you can save as a down payment on a new car in a couple years.

Do you own your home? Home equity loans are dirt cheap right now (3%)... you could refinance the loan you have on your Cobalt with a home equity loan, and pay if off fairly quick.

How much longer do you have to pay on the Cobalt? How much was the original loan amount? What's the interest rate? All seems like it should be very straight forward and there shouldn't be any mystery to it in a simple interest loan. The amount you originally agreed to finance on the car seems to be the issue.

Also, $375 a month seems like a lot of dough for a car that will probably only be worth $5k by the time it's paid off. Not trying to be a dick... but the poor residual value of small GM cars is no secret.

Boring advice since it none of it involves a new car anytime soon... but you know...

Posted by jeepdave Sam, this is the ONLY time I would ever suggest this, but after selling cars at Toyota, when you have a loan situation that fucked up, you could lease yourself clear of it in a couple years. You would have to bite the bullet and get something with better residual value than a Sonic, but you could roll your Cobalts negative into a lease agreement on a SUV of some sort and knock your payment back a couple hundred and be done with the entire situation in a couple years. Then you could get what ya want on your terms. I can't see a $300 plus payment on a entry level car, even a decked out one, being a good idea. Dude, I promise I'm not being an ass on this. Just don't want to see ya fall into a similar situation again.

No, i understand what you're saying, Dave, but the other considerations are the fact that gas here is pushing $4.00 a gallon, so an SUV or truck is not really an option. The other issue is the fact that everything is so far apart that leasing (due to mileage considerations) isn't an option. I had thought about going with a fully loaded Cruze LTZ (with RS appearance package), but wanted to keep the payment in the $300-400 range. People like my mother can lease a car. People like me cannot. When she leased her 2004 Silverado 4x4, she had 48,000 miles allowable on the lease agreement. When she traded for the 07 G6, she only had 23,000 on the truck in the 3 1/2 years she owned it. So a lease worked for her. My Cobalt was purchased in September 2006 with 8 miles on the odometer. It's 2012 and it's got 99,921 miles on it.

The other thing is that that Cobalt is approaching 100,000 miles and I wanted to get out of it before the value of it really took a shit. Don't get me wrong, it's been a fantastic car, but I need to be out of this $650 a month payment.

thank you guys for your insight and advice... I know it sounds hollow, but it's very much appreciated.

by DelbertGrady What are the terms on your 401k loan? You have to add that to your payment. If you're dead set on borrowing from your 401k, I would pay off the coablt entirely and drive it until the 401k loan is paid off. Then you have the equity in the Cobalt plus any cash you can save as a down payment on a new car in a couple years. Do you own your home? Home equity loans are dirt cheap right now (3%)... you could refinance the loan you have on your Cobalt with a home equity loan, and pay if off fairly quick. How much longer do you have to pay on the Cobalt? How much was the original loan amount? What's the interest rate? All seems like it should be very straight forward and there shouldn't be any mystery to it in a simple interest loan. The amount you originally agreed to finance on the car seems to be the issue. Also, $375 a month seems like a lot of dough for a car that will probably only be worth $5k by the time it's paid off. Not trying to be a dick... but the poor residual value of small GM cars is no secret. Boring advice since it none of it involves a new car anytime soon... but you know...

I don't have enough available in my 401k to cover the entire payoff of the Cobalt, unfortunately. I had thought of that scenario. Luckily, with my 401, i can move stuff around, BUT you're only allowed 2 active loans at a time. Now, with my home, it's my home, but all the financing is in my mothers' name. (it was just easier that way as she was in her 50's and had crystal credit). Now, with the Cobalt, on paper, it was supposed to be paid off in October, BUT this company has tacked on so much in late fees and supposed deferred payments (of which i cannot find any evidence of in my records), that the car might be paid off 8 or 9 months AFTER the contract was supposed to end. This company flatly refused to do anything to modify the loan (due date) to accomodate changes I had in my pay schedule. To be honest, it has become a huge pissing contest.

Now with the $375 or so a month, that was a worst-case scenario ballpark if i cannot get a decent interest rate through my credit union. I feel that because of my loan performance history with those folks over the past four years, my interest rate should be fairly low on this car, which will lower that payment significantly. Also, I don't plan on going with a 60 or 72 month loan with this car. The Cobalt was a 72 month loan. Never again with that noise.

I already told him to go for it outside of here.

Our 401K loan plan is 4 percent interest, he can have the loan paid back weekly at about $40-60 a week for 2 and a half years. When you take home upwards of $600-700 a week, you really aren't missing it if your car payment is cut in half...in the end, the trade off of $240 a month that you never see and won't miss for a reduction of your car payment by almost half is worth it.

You are just paying yourself back and considering the state of Social Security, you'll have another 30+ years to build up enough in there to retire, if we're able to retire at all. So, it's a win win situation. At least from my perspective.

I usually use 401K loans to do big stuff with that I don't have the cash for right away, like replacing appliances or what I plan on doing next, having Lasik done so I can throw away my glasses. I don't miss the 50 bucks a week. The interest goes back into your 401K fund, you aren't paying the company you're paying yourself. The company sells your securities and stocks to fund the loan. So, you aren't really losing anything. Since our plan grows by something like 8 percent a year. You're losing like 4 percent, which you can make up with one good trade and I have in the past. I've made up that and more.

http://www.youtube...atch?v=MejbOFk7H6c

Bad cars make interesting music videos.

You can see the horrible fit and finish just from a music video!

Posted by shadowedsmile http://www.youtube...atch?v=MejbOFk7H6c Bad cars make interesting music videos. You can see the horrible fit and finish just from a music video!

Now, now, it's Only bad because you don't like it

yeah, lets talk about non-diesel VW's build quality and long-term reliability.
and honestly, what the fuck do you know about 'build quality'?

I know of several 1.8T's that are in the 300k+ mileage range and all run like champs, also the interiors are holding up great!

congrats, you know of a couple good ones out of millions produced.
Do you want a medal?

My VW broke nearly weekly, had paint coming off every panel, interior looks nice but you couldnt keep a glovebox or arm rest on.

Everyone knows of some shitty car thats running high miles now, and everyone knows of some amazing car produced that dies at very low miles. This argument is useless.

Posted by team haymaker congrats, you know of a couple good ones out of millions produced. Do you want a medal? My VW broke nearly weekly, had paint coming off every panel, interior looks nice but you couldnt keep a glovebox or arm rest on. Everyone knows of some shitty car thats running high miles now, and everyone knows of some amazing car produced that dies at very low miles. This argument is useless.

Truth! I have seen a Yugo with 150,000 plus claimed miles on it. Of course I have seen more with less than 60,000 in the wrecking yards with straight bodies if that tells ya something. 150,000 on a Yugo is equal to about 900,000,000,000 on a Cherokee, quite a feat.

Posted by Nismo I know of several 1.8T's that are in the 300k+ mileage range and all run like champs, also the interiors are holding up great!

That's because VW owners don't use the cup holders.

I keep forgetting that the Chevy Sonic is the second greatest car ever made*, even though no one has owned one for over 6 months yet.

(*second only to the LeBaron)

Posted by bandi I keep forgetting that the Chevy Sonic is the second greatest car ever made*, even though no one has owned one for over 6 months yet. (*second only to the LeBaron)

I'm sending Dirty Harry to shoot a hole into your engine block, you kraut mobile lover.