Car financing help!!?

Question

Ok, My mom wants a new car, but shes upside in her current car, she owes 15900 and its worth only about 8000. It has almost 100k and im afraid that after the warranty is up repair costs are gonna be crazy! its a volvo what should we do??

Get a new car and just add the negative equity into the new car? or just wait it out till we dont owe as much?

Whats the longest term a bank/credit union will finace 84 months??

Please please give me some advice!!!

Answer 1

Are you my son? Only I have a Mercedes and I am in a similiar position. I am holding out until I owe a little less. Does your mom belong to a credit union? If she does, they usually have the lowest financing rates. As long as its not giving her trouble I think she should wait or try to pay more each month towards lowering the payment.

Answer 2

I would hold on to it, why get into another similar situation?

You know how she is upside down right now? Well, that happens on almost every car purchase, especially when purchased new. The car depreciates so fast.

The only way you could not be upside down on a car loan is if you put a very large amount down, and made very large monthly payments that would cover the depreciation. But even then, you are paying much more than the car is going to be worth, there is no way around that.

Now think about going out and buying a new car. Again, she will be upside down on it the instant she buys the car and drives off. But this time, add the additional amount from the old loan... Same situation as now, except instead of owing 15,900 on a car worth 8,000 she would owe 23,800 on an 8,000 car!
In my opinion, and logically thinking, that is a much worse situation than she is in now.

She should ride it out. The cost of maintenance and repairs on a vehicle 8 years old or less is almost always less than a new car payment. 8 years old is about the time repairs will start to be close to the cost of a new payment, but that also depends on the vehicle.
If you have kept the vehicle maintained and it's in good condition, I can't see that repairs would be too much a month. Even with an existing car payment, you are mostly paying for maintenance which runs between 2 cents and 15 cents a mile. Figure the cost on the new loan, plus the maintenance on the car and I am sure you will find the older car will cost less to keep and maintain than buying a new car, especially one that you will be so upside down on the minute you buy it.

Answer 3

Look into extending your warranty on the current car. Many places sell warranties for high mileage vehicles.
Compare her current payment plus the cost of the warranty, to the payments on a newer car. You may be able to get into a new car for the same or a little higher payments. Then it would be worth getting out from under the volvo.

You may still be upside down in a newer car (due to the negative equity on the volvo) but a car with a warranty is better than one without.

Talk to a dealer, let them know your problem. They may be able to find a car with the same payments.

Some lenders offer 84 month terms, though you have to have good credit.

Check out this article.
http://development1.blogspot.com/2007/01/financing-car.html

Answer 4

I think you should wait this one out. This is the problem with financing too much car for too long. Over the next couple of years, the depreciation will slow down and the discrepancy between your balance and value will be lower. I think it's the only thing to do here unfortunately. I would certainly not roll it over into your next car. That would be the least financially savvy thing you could do as it will only build a higher and higher mountain of debt.

Answer 5

Well, you will be adding 7900 dollars to ur mothers bill by trading it in. So even a 13,000 dollar car would cost at least 21,000 dollars. I would have to say unless her credit is impeccable then i would ride it out. Even one year would make a huge difference in what you owe and what the car is worth.

Answer 6

in case you're in super Britain, confident, it somewhat is!! If the automobile is on finance, it somewhat is completely owned by potential of the finance agency, until the debt is thoroughly paid off. subsequently, it can not be legally offered until the finance is cleared. The regulation could be diverse in the united statesA., yet it somewhat is Y!A U.ok. and eire, in spite of everything...