2022 GMC Sierra owner is $30K underwater on his car loan and wants out…so dealer suggests just renting it on Turo
So far in 2024, 80% of Americans who purchased a new vehicle financed. As such, you can imagine that there are more than a few folks out there who didn’t quite understand what they were signing up for. In an attempt to help inform car shoppers, I’ve been sharing cases where drivers (often unknowingly) opt into, well…some really crappy car loan situations. Here’s another one.
Driver owes $65K on a 2022 GMC Sierra truck…with a $33K wholesale value.
Yusuf Benallal operates Charlotte Auto Sales in North Carolina. He often shares chats with customers who want to trade in their vehicles.
This particular driver has a 2022 GMC Sierra pickup. Even though it’s nearly new and the guy still owes nearly full market price, trucks depreciate rapidly.
Case in point: Using MotorBiscuit’s car buying tool powered by TrueCar, I looked up used 2022 GMC Sierra 1500 prices in my area. They range from $38K to $64K.
Considering the 2024 GMC Sierra 1500 starts at $37,500, it’s possible the owner here rolled over a previous car loan to the 2022 truck, although we just don’t know. We also don’t know the Sierra’s size and trim, which had a wide price range overall, topping $97,500 for the 2024 Sierra 1500 EV.
In any case, the Sierra driver is already looking to trade in the truck for reasons he doesn’t specify. Now, Benallal runs a dealership, so he offers a trade-in value so his company can resell vehicles and make a profit.
Benallal shares that the Sierra in question is only worth about $33K on trade. That leaves a $32,000 gap.
How can drivers “trapped” in a car loan get out?
There are several ways. Of course, the driver can pay off the remaining balance. Slim chance they have a chunk of cash that big, though.
Next, the driver can attempt to sell the truck himself for a higher amount than the trade-in price. This way, the loan gap can either shrink or disappear entirely. He’d have to find someone willing to pay upward of full retail, which could be challenging.
The owner might be able to make larger or extra payments to pay off the truck faster. Again, this situation depends on their overall financial situation. As we well know, car payments, when insurance is added, can squeeze budgets to the point where extra payments just aren’t feasible.
Otherwise, the Sierra owner can attempt to create a revenue stream specifically to pay off the car, as Benallal suggests.
Renting on Turo might help pay off your car loan
Turo is a rental marketplace similar to Airbnb but for cars. Many folks use it to borrow “fancy” cars, but it’s also for “mundane” daily drivers.
Some lienholders prohibit vehicle sharing, so always check on this before setting up a Turo account featuring a financed car.
What happens if someone borrowing the car wrecks it? Well, if all safety nets are in place, the owner will be covered by insurance. The renter’s insurance will cover damage to the truck up to its total loss value.
Assuming they have gap insurance, the owner can walk away from the Sierra without owing the loan balance. There are exceptions to gap insurance coverage, so be sure you understand it, too.
