The car is worth about 18k and I owe 21k because I got sucked into this deal at 19 yrs old. Now im paying for it. I am a single mother and need to cut corners and im trying, But this car payment is way too much for me and if i could lesson or get a lower priced one I would. How will this affect my credit? What if my credit isn't so great? So desperate, please help. ANY and ALL help would be greatly appreciated.
2007-02-27 11:24:56 · 8 answers · asked by gsxr650 3 in Cars & Transportation ➔ Buying & Selling
Have you made all your payments on time? You could call the financing company and ask to get a lower interest rate.
If the car is a newer car you might be able to get the financer to extend the payments. Say you are set up to pay it off in 4 years, they may extend it to 5 years, which would lower your monthly payment. They usually wont do this if the vehicle is older and might not last for 5 years.
If you explain your situation they will probably try to help since they do not want you to default on the loan, they will not be able to sell it to someone else for what you owe them. Basically, they will get more money out of it if you continue making payments than if they had to repossess it and sell it to someone else, since it is worth less than what you owe.
If it is really worth 18 thousand and you owe 21 you could trade it in and buy a really cheap car, and you will have to add the difference (3 thousand) onto your new car payment. But this would be my last choice as you will be paying the money on your old car as well as your new car. If you don't have good credit this isn't the best option, you will be paying a higher interest and since your credit report will show that you also owe money on your current car they may not think you can afford another car (even though you are getting rid of the other one).
You likely will not qualify for the rebates (on a new car), don't get yourself into another deal like this one. Oh is someone mad I don't agree with the phony rebates that she wont qualify for? lol.
2007-02-27 11:33:48 · answer #1 · answered by starwings20 5 · 0⤊ 1⤋
If the car worth 18k, and you owe 21k, that means part of it is interest. So, how much you owe should be around 17K. However, when you are 19, i believe u got a bad credit, and the interest going to be around 25%. Nowaday, u should have a better credit. Tho, what happens to ur earlier payment will be all a LOST. You can talk to the bank about refinanace to extend the yr of payment to lower ur monthly payment if you wanted to keep the car. Sell it? i really doubt it will cover up what you owe, you'll end up losing another thousand or two w/o owning a car. Or, look at the dealers, trade urs in, but buy a much cheaper car thats like 8K or so. After all the caculation, you will end up owning the bank around 12-14K or so, with how much you owe earlier and the interest. But, i suggest you to call credit couseling office thats on TV commercial all the time....
2007-02-27 11:40:24 · answer #2 · answered by steak5959 3 · 0⤊ 2⤋
You can try to sell it at the Blue book to a private party. Yeah, you'll take a hit, but you'll eliminate the huge payment. Then you can take a personal loan out to payoff the balance and use the rest of the money to buy another used car for a lower price. That is about the only option, besides refinancing.
2007-02-27 11:37:00 · answer #3 · answered by millionsofsubys 2 · 1⤊ 0⤋
Unfortunately, unless you don't get rid of it for the amount that you owe, your pretty much stuck with it. You could maybe try to refinance your car, but then agian, that'll tack on another "refinancing" change onto it, but it could lower your monthly payment but the downfall will be that if you've already paid in a years worth of payments, they'll stretch it a year or so more...then if the car proves unreliable later on, you'll be really deep in debt.
Sometimes there's things that you might have to stick to, and just paying it off might prove harder initially, but better in the long run.
Wish you luck...
2007-02-27 11:34:44 · answer #4 · answered by A A 3 · 1⤊ 1⤋
if you owe $21k and its worth $18k then your $3k upside down. honestly that is not that bad compared to alot of customers i have dealt with.
the best way to get rid of negative equity is to lease, but often leasing will give you a higher payment (when there's negative equity involved) than you may want.
you just need to find a vehicle that has at least $3000 rebate on it or more. just remember that whatever you are purchasing that $3000 will be added on top of whatever you are purchasing and that car has now become "upside down" even more.
what banks look at are loan to value ratio's when it comes to financing. most banks like to stay within 100% to 120% loan to value. so if you have a $10k car, they will finance up to $12k. which means if you have $3000 negative then you need a car that will handle the $3000 you owe as well as the taxes and fee's that the vehicle will incur. realistically you need a vehicle that is at least $13k to $16k and then you will be financing $16 to $19k plus taxes and such.
paying off the previous loan and opening a new loan will probably help your credit long term. if you have been late on the payments though then obviously it will hurt your credit. just trading it by itself wont hurt your credit.
if you currently have negative credit then the banks/lenders might require a down payment, but that will also help you with your loan to value's.
your best bet would be to try and find a close out 2006 model vehicle with alot of rebates or discounts to help cover the negative and assist w/ your loan to value and down payment.
being a dodge/chrysler dealer i know there are quite a few dealers that have more pt cruisers than they want and are willing to discount them quite a bit to sell them. (last one i sold we lost $2000 on). the ones we have you can get for around $13 to $17k.
are they the best car in the world, maybe not, but they will help your situation.
the one thing i would suggest is that whatever you purchase, make sure you get gap on it. gap will cover whatever your insurance wont pay if you total it out. worth every penny.
2007-02-27 15:03:51 · answer #5 · answered by ridgwayaz 2 · 1⤊ 1⤋
Look at a new car! I work for a Ford dealer and I know that the Focus has $3000 in rebates right now. So that will cover up most of your negative equity! They are great cars. you can buy on for about $12-12500. Depending on your credit.....that might lower your payments!
Hope this helps!
Let me know if you need any more info!
2007-02-27 11:34:17 · answer #6 · answered by Anonymous · 1⤊ 1⤋
your credit will go down the tubes if you stop paying. may i suggest that when you recieve bills, pay more than the minimum because if you pay the minimum, you are getting socked with paying an interest rate on top of what you are paying monthly. pay at least the maximum and sooner or later with patience the vehicle will get paid for. hope this helps
2007-02-27 11:50:41 · answer #7 · answered by c s 3 · 0⤊ 1⤋
my advise sell the car for more than its worth no too pricey or too low and if u dint go for that try 2 jobs
2007-02-27 11:30:49 · answer #8 · answered by amari m 1 · 0⤊ 1⤋