keep high car payments & interest rate or just buy cheap but reliable used car outright?

Question

I was in a bind a few months back & had to buy a car from a buy here, pay here place (my credit is not good & was unable to get a regular loan, it was the only place that would approve me, and I couldn't get a co-signer, either) ... bad thing is, it's a 24.99% interest rate, and the payments are $160 every two weeks ... I am struggling to feed my son and I, and pay our bills to keep our apartment, and was thinking about relinquishing the car (the payoff is more than the car is worth because of the interest) and just buying a cheap, reliable used car outright for under $1000 ... any ideas or suggestions? Anyone have this kind of problem and come up with a different solution? Or have an idea of how to get a good, cheap used car? Thanks!!!

forgot to mention, the car broke down 2x already and the dealer woudn't pay, and it's still not fixed right ~ might be a lemon, but it's used and not much I can do about it

Answer 1

That's really up to you. If your credit is alreay bad, not paying for the car is just going to make it worse. The question is how much worse, and do you care?

If the answer is you don't care about your credit rating, then go ahead and stop paying for the car and they'll just take it away and try to collect on the money you owe, or make your credit score worse.

However, be prepared to be making repairs on a car that you purchase for only $1000. Typically cars that you buy for $1000 or less come with problems.

Answer 2

There may be different laws in your state, but in most areas, you wouldn't be obligated to this deal. That dealer took a risk in "rolling the deal" or a "spot delivery" as they call it, that's when they are so afraid that if you leave without the car, you won't be back. That on it's own should lead you to question if you got a good deal or not, they may even have some extra garbage in your terms that you don't necessarily need. I'd take your cash purchase price, and compare it at another dealership or 2 to make sure it's a good deal, and check your bank's interest rate to see if you qualify for a better rate.... also keep in mind that a dealer can bump your rate up higher for profit, called a finance reserve.... he may even just be trying to get greedy.

Answer 3

Just because you let the car get repoed, doesn't mean that you are finished with the debt. They will subtract the amount that they got for the car, and then add what it cost to send it to auction and repo it.

If at all possible, can you find a cheaper interest rate at your local bank? You need to get out from under this loan, it will pull you down. Can you sell it and let someone else pay off the loan? I wish you good luck and there is no easy way out of this.

Answer 4

You can refinance your vehicle, or let them take the vehicle, and just apply for a another loan for a new car. I had really bad credit, and I applied for a car loan through this company and go approved really quickly and surprisingly easily. Heres a link to they're website. http://goshorter.com/465/ I've had no problems, and I have nothing but good things to say about them. I highly reccomend them!