Dear Terry,
I’m currently upside down on a vehicle by $15,000. The Kelley Blue Book value is $8,000. I was recently told by the dealer that I need $6,000 worth of work done to my van. I know I will have to pay one way or another, but would it be wise to trade in my van for a newer, used van for around $14,000 with less mileage and a warranty or ride it out with this current vehicle?


Dear Jessica,
It’s a little hard to fathom your situation based on what you’ve revealed. I’m assuming you owe $15,000 on a van that’s worth $8,000 — hopefully you don’t mean you owe $23,000 on an $8,000 van!

What has me puzzled is the idea that a van worth $8,000 needs $6,000 worth of work, as the dealer suggests. For that kind of money you’re talking enough to pay for a complete engine-transmission overhaul. If that’s the case, then the van isn’t worth $8,000 because it clearly isn’t salable without the repair work.

Before you make any decision on repairs, get a second opinion on what repairs are really needed. If a couple thousand dollars will get you on the road safely, then I would try to hold things together until you can get out from under the loan.

But if you do need to pour $6,000 into that van to make it safe and reliable, I would take that $6,000 and pay down the loan, trade the van for what you can get and roll the balance on the loan into a newer, better vehicle.

While I almost never recommend rolling the balance from an old vehicle’s loan into a new vehicle, you don’t have many other good choices.