CoolCarGuy.com

NEGATIVE EQUITY

Recently, I was talking with a woman about her 1999 Lexus RX300 and received the following question from her about selling her vehicle and eliminating the negative equity….

“John,I have had this car for about 6 mos. It is in good condition, could use tires and has some normal interior wear. I would like to get what I owe on the vehicle.

I’ll attach some photos and here is the VIN #.

Also, if I am able to sell the car for less than what I owe, are you able to finance the negative equity on top of the Subaru?

Thanks,

Tracy“

There are millions of people driving vehicles today who owe more on the vehicles than they are worth. In fact, a recent study showed that as many as 37% of the people driving automobiles today are “upside down” on the vehicles they own. Personally, I think that figure is low and Tracy is obviously not alone in her situation.

In her case though, it’s always difficult to buy a vehicle and get out of it 6 months later for what you owe on it. Especially, if you paid retail for the vehicle to start with because all vehicles depreciate, especially SUV’s right now with gas prices approaching $3 a gallon. Time is what eliminates negative equity because every month that goes by you own more of the vehicle.

Tracy’s best bet is to find a buyer for her vehicle as close to what she owes on it as possible, but that’s not always easy because most people looking for used vehicles want a super deal. If they are buying from a “private party” they want to pay even less than what they would pay at a dealership.

THE LEASING ADVANTAGE

One great option for people wanting to eliminate negative equity is to lease a new or pre-owned vehicle. The lease allows a person to get a lower payment, have a guaranteed buyer of their vehicle at the end of the lease period by staying within the lease terms, and potentially roll the negative equity into the leased vehicle.

I’m currently assisting a client that is coming out of a large truck with 45,000 miles that he is upside down on by $5,900. He’s getting a 2006 Chrysler with only 15,500 miles on it and at 15,000 miles a year he will have a lower payment than what he’s paying now by almost $150 a month! At the end of his lease, he gets to start over and the $5,900 will have disappeared.

My suggestion for Tracy is to get out from under her Lexus RX300 by rolling the negative equity into a new or near new vehicle. Lease it for 36 months to get a better vehicle, a lower payment and a guaranteed buyer at the end of the lease.
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Auto Consultant – John Boyd: The Cool Car Guy

John is an auto consultant with his license at a car dealership in Denver, Colorado. He can help you save time and money on any make or model, new or used, lease or purchase – nationwide! Call or email John about your next vehicle! jboyd@coolcarguy.com or Twitter @coolcarguy

President George Bush made the following statement earlier today… “Our addiction to oil is a matter of national security concern,”.

With all the political rhetoric about dependence on foreign oil, and gasoline approaching $3 a gallon, I thought I would put in my two cents on a potential solution to America’s addiction to foreign oil.

Most people don’t realize that you can actually modify a deisel engine to run on cooking oil. That’s right, the vegetable oil coming out of the deep fat fryer at your local fast food joint can actually run your automobile with just a slight modification. There are even companies like GreaseCar that are capitalizing on this fact and selling everything you need to turn your vehicle into a cooking oil burning machine. Check out Mike’s grease running Passat.

Couldn’t manufacturers of automobiles offer this same modification to vehicles without trying to create a new type of alternative vehicle? Sure. The problems that have come up with this idea have been two primary issues:

1. Is there enough cooking oil produced in the United States to fuel the demand?
2. What would be the distribution center for getting the fuel into your vehicle? Road Trip movie full

Here’s a thought to the first question that will probably blow your mind…

BioFuels The Family Stone ipod – “…only about 10% of the waste vegetable oil (WVO) produced in the industrialised countries is collected, billions of gallons a year aren’t collected. Apart from the waste oil produced by restaurants and food outlets and food processors, an estimated 1.5 million US gallons of grease and oil goes into the sewage system every year for every one million people in some US metropolitan areas. Extended nation-wide that’s hundreds of millions of gallons wasted every year. US restaurants produce about 300 million US gallons of WVO a year, much of which ends up in landfills.”

Granted that’s not enough WVO to fuel the entire world or even the United States, however that’s just left over “waste”. If you take the time to read articles on BioFuels you will discover that oils from foods, such as vegetable oil, are “renewable” sources that can be grown in mass to meet the demand.

The next question is distribution and that’s really the bigger issue in my opinion. You can have the greatest product in the world, but if nobody can get your product you have a problem. The key is none other than the fast food restaurant industry that we see on every street corner. Today there are about 160,000 fast-food restaurants serving more than 50 million Americans daily. These businesses generate sales in excess of $65 billion annually, which is one of the few industries that could actually take on big oil. And unlike oil companies, there is no OPEC for the fast food world because these guys are more competitive than a couple of two year olds fighting over a rattle. McDonald’s, Burger King and Wendy’s are not about to join hands and sing koombya or price fix anything.

This means that consumers would be able to get their oil at the best possible price, like a $2.99 value meal. Plus, oil companies would absolutely freak out if fast food giants starting eating into their profit margins. Suddenly, the shortage of oil and dependence on foreign oil would disappear and we would probably see gasoline prices dropping to the floor. In addition, our government would lose billions of dollars until they figured out how to tax cooking oil, but it would force politicians to get out of bed with Exxon and other oil barons.

Fast Food restaurants could install miniture vegetable oil filtering systems and storage tanks for handling their new business model. It’s really quite simple in my opinion. If you want to change the market, get rid of the monopolies and open the market to additional choices to create supply and demand. Remember AT&T and what we had to pay per minute for a long distance phone call? Not anymore. Telecom companies practically give away long distance today and you don’t hear them making any claims about the cost of fiberoptics or that they haven’t had a price increase lately.

It’s what capitalism is all about and promises in a free market, except when it comes to fueling our vehicles. I would love to see McDonald’s get a deal going with General Motors or Ford Motor Company to modify 10,000 vehicles to run on cooking oil and get a test pilot program started in a major city. I can’t imagine that the investors of both of these giant publicly held companies, wouldn’t like to see them create an additional revenue stream that takes on the oil companies with a slight modification to their existing assets.
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Auto Broker – John Boyd “The Cool Car Guy”
John is an automotive consultant with JFR & Associates in Denver, Colorado. He can help you save time and money on any make or model, new or used, lease or purchase – nationwide!
Call or email John about your next vehicle!
jboyd@coolcarguy.com

It might be time to get yourself a vehicle that gets better gas mileage. After you read the article “Oil prices could put consumers over a barrel” you will see that gas prices are heading in the wrong direction once again….

“High oil prices can dampen economic growth by weighing on consumer spending and business investment.

“The danger is that this latest bout of higher oil prices will last longer and have a more detrimental effect on consumer activity

,” said Nomura Securities Chief Economist David Resler.

“Mortgage rates and long-term rates are certainly much higher than the last time we were flirting with $70 a barrel for oil, and that means we’re not going to get the counterweight from low interest rates to ease some of the burden of energy costs,” Resler said.”

Visit MSNBC at the link above for the whole story.

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Auto Broker – John Boyd “The Cool Car Guy”
John is an automotive consultant with JFR & Associates in Denver, Colorado. He can help you save time and money on any make or model, new or used, lease or purchase – nationwide! Call or email John about your next vehicle!
jboyd@coolcarguy.com