What does it mean to cram down a car payment?

[slydog1967]

What does it mean to cram down a car payment? Does this mean that your repayment amount is lower than your payment for vehicle?

[DontBother]

Say you owe $15,000 on your car. But it's only worth $10,000. A cramdown would mean that you "cram down" the amount that you owe against the car to the current market value. Basically, it's forcing the bank/finance co. to forgive the difference between the balance and current market value. In the New Law, this is only allowed if you've owned the car for greater than 910 days...

[Cramdown]

"The action by which the court may order a plan approved over the negative vote of a class of dissenting creditors."

[tivo.junkie]

How is worth determined?

HOw do you establish the worth of a vehicle? Kelley Blue Book is the standard but they list retail prices, then trade in prices at Excellent, Good, Fair and Poor. Then there are private party values as well.

I just tried trading up my vehicle at the Toyota dealership I bought if from used over three years ago. They offered me, in writing, half of what I owe on the car. Can I use that amount?

[optimistic1]

Private party value at fair condition is what you should use, not trade in value. Dealerships use black book value, which is basically an auction value.

[DOA]

The easiest cram down is intrest rate. Mine dropped from 9% to 6%, knocking $60 a month off my payment. Two more months and we are finished!