Dave Ramsey Advises Caller on How to Get Out of an Underwater Car Loan

Are you feeling trapped in an underwater car loan? Financial expert Dave Ramsey recently shared some valuable advice on how to get out of this sticky situation. Being underwater on your auto loan means that you owe more on the car than it is currently worth. This can be a stressful and challenging position to be in, but there are ways to navigate your way out.

In a recent episode of “The Ramsey Show,” a caller sought advice from Dave Ramsey on how to deal with his $32,000 underwater car loan. Ramsey’s solution was simple yet effective – sell the car and come up with the difference between the loan balance and the car’s current value. In this case, the caller needed to come up with $5,000 to pay off the loan and get rid of the problem once and for all.

Ramsey also cautioned against selling cars with underwater loans to companies like CarMax, as they may not offer you the best deal. Instead, consider trading in your car at a dealership, where you can apply the trade-in value towards a new vehicle purchase or lease. Just be sure to carefully review the terms of any new financing to avoid ending up underwater on your new car as well.

If you find yourself in a similar situation, take the time to research the current value of your car on sites like Kelley Blue Book. This information can help you make informed decisions about how to proceed. Remember, being underwater on your car loan is not a permanent situation – with some strategic planning and smart financial decisions, you can work your way back to solid ground.

For more tips and advice on managing your finances and building wealth, be sure to check out Dave Ramsey’s Best Passive Income Ideas for 2024. And if you’re struggling with debt, explore options to become debt-free for less than you owe. Don’t let an underwater car loan weigh you down – take control of your finances and start moving towards a brighter financial future today.