Can I trade in my car with a blown engine and an upside down loan?

Question

So here's my dilemma... I blew the engine of my 2012 kia optima due to poor maintenance (went without oil for 32,000 miles) The car also has 65,000 miles on it, a damaged nose (destroyed it when i hit a ran over a tire on the road), and has 22,000 left for me to pay on it.

The KBB values it at around 8,000 and I've been told by my dealership that a new engine would cost me between 7,000 to 11,000 dollars... and a new bumper around 3,000 to 5,000 dollars.

Is it better for me to save up over 17,000 to repair a car that's apparently worth 8,000? Trade it in and hope for a loan on a used car that isn't over 500 dollars a month? Are there any other options that I haven't considered?

I know I've screwed myself here >.< I really would like someone's advice on this. Thanks in advance.

Answer 1

You are too far upside down to trade it.



If you eventually pay it off, they will take it on trade for $100-200 depending on who toes it.

Answer 2

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Answer 3

Well you have to think about what the dealer would pay for it. Most likely they would not follow KBB or other car rating websites or communities. However with being a new car if you replaced the engine which would be 7 to 11 grand, the car would then be more money. But either way your not going to get all of your money back that is due on the loan. The car is worth 8 grand because of the engine and nose damage. If this was fixed it would sell for more money but then be on the cars summary report for damage which then could affect the cost. Now you could always find a used engine which would probably be anywhere from 3 to 6 grand and use an engine that has around 65,000 miles on it. My father does this all the time since he has been a mechanic for 30 + years. He told me by putting an older engine in it you could try to sell it for more money since it would be running. You want to avoid the dealers unless the car is under warranty and maintenance from the car dealership but if you want to do it on your own it would save you money because dealerships love to overprice and over charge on almost every service. Try this but if you want a new car engine I believe you will be spending a lot of money. I am just saying if you had a used engine that is about the same miles wise as the engine that you damaged then to the dealers eyes its basically the same car. Do you see what I mean. I hope you do okay in your decision making. Its tough going through such hard circumstances.

Answer 4

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Answer 5

No dealer is going to take this car in on trade without a very significant amount of money down. Here's why:



Even though KBB said this car was worth $8,000, you still have to figure in the fact that the dealer has to replace the engine and the bumper, and anything else that may be damaged, just to resell the car. With a retail value starting at $16,295 (before figuring for mileage - KBB allows 15,000 miles per year, so you're deducting for 35,000 miles), and a retail of roughly $12,495 after mileage, they need to be in the car no more than $8,000 to make a profit. However, they need to put a new engine in the car, as well as a new bumper, which, even at cost, will be close to $8,000 in repairs (to include labor). This cost alone would put them over the retail value of the car, and they would have to sell it for more than that, just to turn a profit. They can't do this, as the bank would only lend up to 125% of the retail value of the car (called loan to value), to include tax, title, and license. 125% of $12,495 is $15,618.75. They would make nothing on the car as it is. Let's not forget the fact that you owe $22,000, which would have to be paid to the lender, just to get the title released so they can sell the car. What does all of this mean? It means NOBODY will take this car in on trade. Wrecked, and with a blown engine, the car has no trade value. Even if they gave you $8,000 for the car, and you bought a $20,000 car (max on the loan would be $25,000), after tax, title, and license, you could only absorb $3,000 of the negative equity. You'd have a $500 payment, but would need a down payment of $11,000.



In reality, you've dug yourself a pretty big hole here. You have VERY few options, and none of them are good. You can a) save enough to replace the engine and bumper, and pay the car off, b) allow them to repossess the car, and repay what you owe minus what they sell it for, or c) buy a beater, and file bankruptcy. They can repossess the car, and you can keep the beater, and no money comes out of pocket for the Kia. You will, however, have to pay the attorney for the bankruptcy. Keep in mind, though, that if they repo the car, or you file for bankruptcy, your credit is trashed.



I wish I had better advice, but I don't. Sorry I couldn't help more.

Answer 6

You are up a creek without a paddle unless you have $14K in cash that you can put down on a new vehicle.

No lender will roll $14K in negative equity into a new loan.



There is no good solution to this problem. You're going to have to pay for this loan one way or another. Take it to an independent mechanic and you can probably get a new engine for around $5K and a new bumper for $1,000-1500.



As stated, a new bumper should be covered under your collision insurance, minus your deductible.

Answer 7

Who declared the engine blown? What are the symptoms of the blown engine? It would make more financial sense to just replace the engine if indeed it is the problem. But $4500 is a little expensive for a remanufactured engine. How do you still owe $10,000 on a Kia that's too old to be under warranty?

Answer 8

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Answer 9

Depending on the dealership, they may or may not take your vehicle as a trade in. Understand that the value will be minimal as they will have to replace the engine and all necesarry parts to get the car running. We recommend you check with some Kia authorized mechanics and see if there is a cheaper option for you.



Raul

Kia Social Team

Answer 10

A new car should not have needed oil in a year. The oil light should have come on.



You may have a claim against Kia if you were sticking to the service schedule but with such a huge mileage in one year it should have been servuced twice.



If you hit a tyre on the road you can claim your insurance for the bumper.



No dealer will give you real money for a car with a blown engine.

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Answer 13

Rather than an expensive "new" engine, check with local auto salvage yards for a "used" engine for your Kia, which could be thousands cheaper.

Answer 14

it is possible but it means they ad the principle of your current loan to your next loan.



I thought they were supposed to have 100k drive train warranty ( but not checking the oil for long time is bad and may have voided the warranty .)

Answer 15

Here is an engine from a 2011 Hyundai Sonata which is the same one used in the optima. It has 31,000 miles on it, and is $2,700.

http://www.ebay.com/itm/11-12-13-HYUNDAI-SONATA-ENGINE-2-4L-VIN-C-8TH-DIGIT-FED-EMISSIONS-ULEV-2-874599-/131044586305?pt=Motors_Car_Truck_Parts_Accessories&fits=Year%3A2011%7CMake%3AHyundai%7CModel%3ASonata&hash=item1e82ddb341&vxp=mtr



Here is a brand new bumper which can be painted to match your paint color for $320

http://www.ebay.com/itm/NEW-PAINTED-TO-MATCH-Front-Bumper-Cover-2011-2011-Kia-Optima-SX-NON-HYBRID-/331007481663?pt=Motors_Car_Truck_Parts_Accessories&fits=Year%3A2011%7CMake%3AKia%7CModel%3AOptima&hash=item4d1195573f&vxp=mtr



Heres an Upper Grille for $80

http://www.ebay.com/itm/Kia-Optima-Front-Grille-Grill-OEM-Original-11-12-13-fits-Hybrid-and-regular-/231032685720?pt=Motors_Car_Truck_Parts_Accessories&fits=Year%3A2011%7CMake%3AKia%7CModel%3AOptima&hash=item35ca9f0498&vxp=mtr



Heres Headlights for $300

http://www.ebay.com/itm/BLACK-CCFL-HALO-PROJECTOR-HEADLIGHTS-w-LED-PARKING-FOR-2011-2013-KIA-OPTIMA-/310768671045?pt=Motors_Car_Truck_Parts_Accessories&fits=Year%3A2011%7CMake%3AKia%7CModel%3AOptima&hash=item485b419945&vxp=mtr



Hope this helps. You have a really nice car, and it is a shame that all of these things happened to it. If you replace the engine, remember to change the oil every 5,000 miles.

Answer 16

every time i post a question, even if its the simplest one, they cant offer me a good informed answer here. what happened to people who really make the effort to write an answer?

Answer 17

Sure, but it has little value and you are going to have to pay a big portion of that $22,000 you owe on it out of your pocket.

Answer 18

depends on the paper you signed, read it

Answer 19

Thankyou for the answers, greatly appreciated