I bought a car. A year later, I regret it. What are my options here?

January 8, 2014 1:57 PM

One year ago, I was approved for an auto loan (via Ally, if it matters), and bought a 2006 Mini. I like the car well enough- it's fun to drive, no issues, and the newest model car I've ever owned...but it's an automatic, and as I've always been a manual driver, I find that I now deeply regret my purchase. Can I trade/sell this car, and get another, on my current loan?

I am a FAR more inattentive driver behind the wheel of an automatic, and don't feel like I'm "connected" to the car...like I'm just passively sitting in the driver's seat turning the wheel. The Mini has a fake-y shift/toggle option (I forget what they call it), and I've played around with it, but it's no substitute for having my left foot on a clutch. I have about 3 years left to pay down at my current loan repayment plan. I'm cool with/able to afford the loan, my payment plan's fine, no issues with Ally, etc. I just, frankly, want a stick-shift car. I do not want to pay to have the transmission converted, so please do not present that as an option.

I want to know if it's possible for me to sell this car and buy another without rocking the boat too much. Has anyone else been where I'm at? Should I talk to Ally, or my dealership, or...? I appreciate any and all input, so long as it's not chiding me for buying it in the first place (I have my dad for that). Thanks all!

posted by ElectricGoat to Travel & Transportation (13 answers total)

Almost certainly not. The loan you have is secured by the car you have. You'll need to sell the car you have, pay off its loan and get a new loan (assuming you'll need one) for your next car.
posted by jon1270 at 2:04 PM on January 8, 2014

You can certainly try to sell it if you want. The note still needs to get paid off, though, so your choices are basically:

1. advertise it, take what you can get and pay off the bank balance yourself,
2. sell it for enough to pay the loan off completely,
3. sell it and have the buyer assume the note, or
4. try to trade it in at the dealer and get them to roll the current note into a new one.

You can get an idea of the value of your make/model/trim package from sites like Edmunds and then figure out where you'd like to price it.
posted by jquinby at 2:07 PM on January 8, 2014

...though it's worth pointing out that the bank will hold the title to the car until the loan is paid off, something you'd want to be sure to work out with a potential purchaser. For what you want to do, I expect number 4 is probably the route to go, though now basically paying off 2 cars at once. :(
posted by jquinby at 2:22 PM on January 8, 2014

I feel your pain; just did the same thing for the same reason. The loan has to get paid off, and the safest way to do it (if you can) is to sell the Mini for at least what you owe, pay off the note directly, and get a new loan for your new car. I'd advise selecting, but not buying, your new car until you've sold the old, as it's easy to believe you'll get more for your old car than you actually will.

If you're underwater and can't sell it...I'd recommend waiting and sticking with your current car for now, until you're not underwater. That's what I did, and it was worth the wait.
posted by davejay at 2:22 PM on January 8, 2014

For what it's worth, at least in these circumstances you have car that retains much of its resale value, historically. I owned my moderately well-appointed 2005 MINI Cooper for about 12 months, and due to life circumstances had to sell it and did so private party for more than I owed on my loan. There's a shot you could do the same depending on how the car is configured. Definitely listing it private party (via AutoTrader or other reputable online private party listing sites) would yield you a higher price than trade or equivalent like CarMax. Obviously, the downside of getting rid of your current car and buying another is factoring in the payment sales tax, title, fees, etc., again.
posted by Asherah at 2:28 PM on January 8, 2014

You can't just switch the loan over to a new car, but buying a new car when you haven't fully paid off your trade-in is a common enough that dealerships will know how to deal with it (of course you'll get the remaining loan balance taken off your trade-in value). Of course, that's assuming you're going to get your next car through a dealer.
posted by ckape at 2:29 PM on January 8, 2014

Wait till the end of the month, then go to a car dealership. It's better if you already have your next car selected. My experience has been that you can get 3x-4x more value out of a trade-in than a resell.

My wife found that she drove a stick much better than an automatic. In fact she selected a stick for her first new car for that reason.

But you have to also understand that a stick is MUCH harder to drive than a standard. Especially if you live in a place with topography (here in south Florida, landfills are the most elevated spots we have). Also, there's a special bonus effect: when friends/coworkers ask to borrow your car, you only have to say, with maybe a little shrug and a sigh, "It's a standard." A solid 95% of people don't know how to drive one.

Good luck -- let us know how this turns out, please!!!
posted by honkeoki at 2:34 PM on January 8, 2014

Definitely do NOT walk into a dealership and let them come up with a plan to swap your car for a different one. They will invent some complicated scheme that maybe sounds good at first but really screws you in the details. Negotiate the value of the old and new car separately and then hash out terms for the new loan.
posted by mullacc at 2:36 PM on January 8, 2014

The things you need to know are how much the car is reasonably worth, and how much you owe (loan payoff amount).

If the car is worth more than you owe, then you are right side up, and this is an easy deal to do. If the loan is for more than the car, then you are upside down and this gets tricky.

As a rule, you'll get more in a private sale than a trade in, but trade ins are easier and safer.

There will be transaction fees to consider, too. Probably a few hundred dollars, plus you need to secure new financing - which may mean you need to come up with a down payment as well.

If you decide to trade in, negotiate the price of the new car first. Then negotiate the value of the trade against that value. Treat them as two separate transactions. Don't bundle it - it is really easy for dealers to pull a shell game that way.
posted by Pogo_Fuzzybutt at 2:42 PM on January 8, 2014

First, contact Ally and determine your payoff amount. Then check Kelly Blue Book values for your car, personally, I've always taken the step down from the condition that I think it is. If my options are excellent, good, fair, and poor and I firmly think my car is in good condition, I'll still base my plan on it being rated as "fair."

Now you should have a reasonable idea of what you need to sell the car for and what the market will bear. If these two numbers match or are near each other, then you can start determining what car you can afford and what you want. You can then take all this information to a dealer for either a new or a used car. I would also contact Ally and tell them you are expecting to buy a new car in a specific price range and ask them for a quote on a new loan for that car. You can use this to negotiate a better rate from the dealer or run with Ally if it can't be beat.

What will happen next is you will (hopefully) sell the car to the dealer for what you owe and a bit more, the dealer will take what you owe and cut a check to Ally. They will either pocket the bit more (unlikely) or apply the bit more to the total price of the new manual transmission car. Then either through your own financing company like Ally, or through the dealership's financial compay, you will then get a loan for the new car. After Ally gets the check to payoff your loan, the title will then go to the dealership. Depending on what state you are in, you will either then get the title for your new car with a lienholder listed on it, or your lienholder will get the title and you get it once it's paid off.

One side note, call dealers before you show up wanting to test drive a manual. At least here in the States, most dealerships only have one or two manual transmissions on the lot. I've bought two manuals from new car dealers and the first one I had to order and wait six weeks for. The second, I got really lucky and they had the exact car I wanted on the lot. But that was only after going to 4 different dealerships for 4 different car makers.
posted by teleri025 at 3:10 PM on January 8, 2014

I'll just chime in to say that I did this sort of thing. In addition to being an automatic, my car had low profile tires, and Chicago's post crash street situation ruined each of them and then another one over the course of a year. It probably cost me a fair bit, but I have never, ever regretted the decision.
posted by wotsac at 3:17 PM on January 8, 2014

I was in your exact situation. I sold the car. It was actually a pretty simple transaction, just a few forms to fill out to get the loan paid off, title transferred directly to the buyer. Inquire with Ally how to do this.

Any other arrangement is ceding control of the situation to someone else's benefit. A private party sale will get you the most value out of your car, and since you don't NEED to sell your car right now, time is on your side.

I happened to do this concurrently to buying a new car, and it worked out ok, but if you can stand to not have a car while you look, I would sell first.

BTW, I never regretted any of this, other than getting the wrong car in the first place.
posted by danny the boy at 4:47 PM on January 8, 2014

I have been in the same boat (more times than I care to say) and used jquinby's method #4. It hurt, and it wasn't fun, but if you're stuck, you're stuck.
posted by getawaysticks at 5:34 PM on January 9, 2014