Dear Driving for Dollars,
I am halfway through the term of my two-year car loan, and I’ve already paid about $1,600 more than the value of my car.
The total cost for my car loan (the car plus interest on the loan) will be almost $14,000, and my car is currently worth about $5,300. I can’t afford the payments anymore. Can I somehow clear the title for the car and own it outright because I have already paid more than its value, even though I have a year left on the loan?
— Bill
Dear Bill,
You are in a really tough situation. It sounds like you have a very high-interest car loan to be paying that much more than your car is worth. No, there is no direct way to simply get a clear title so you own the car free and clear just because you’ve already paid so much on the loan.
It sounds like you are having some financial problems, so refinancing your car loan is probably not an option either. You might check with the attorney general for your state to discuss the terms of your car loan. Some states have caps on the interest rate that lenders can charge for car loans to protect people from situations similar to yours. If your state has such a law, then the attorney general’s office may be able to help.
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