I recently bought a Mitsubishi Galant and I'm a little nervous about what I paid for it. The thing is I'm 22 and recently totalled my last car which left me in an emergency situation because apparently after a year of perfect car payments, banks were still hesitant to give me an auto loan without a co signer. So when I finally did it was at 25% APR from HSBC. I was told that the actual loan was for $8,800. But somewhere in the contract I saw a total amount of like $15,000 after 60 months. I can almost guarantee the car isn't worth anywhere near the total price I'm paying but that's to be expected that's how dealers rape you, especially in an emergency situation. The thing is, what is the best thing I can do since I'm not going to be keeping the car over a year anyway? I can handle being a little upside down but I am a smart consumer and would appreciate anyone's advice on what to do in the near future when I go to trade this thing in or whatever. Thanks.
2007-06-01 12:30:06 · 5 answers · asked by jldude 5 in Cars & Transportation ➔ Buying & Selling
As a matter of fact I have never been so much as late on a car payment or any other payment for that matter, I make 2100 a month, and the only negative things hurting me is that I just moved and do not have much time on my job and as I said I do have a year of credit history and I have a credit card which...amazingly...I'm paying good on too...I mentioned the rape part because I sold cars here AND in my home state and I know the tricks they pull to get money out of you. I accepted the offer because...again like I said...it was an emergency and I had to have a car.
2007-06-02 14:25:19 · update #1
Ouch. 25% is a pretty massive interest rate, considering the best rates out there are currently 6-7%. Based on the numbers you gave, your monthly payment is $258, but after your first year of payments your principal will only be down to $7800. I wouldn't dump the car, now or a year from now. The problem isn't the car, it's the loan. Try to refinance it now. If you can't, then try again in another year.
2007-06-01 13:10:45 · answer #1 · answered by nevergonnaletyoudown 4 · 0⤊ 0⤋
why blame the dealer?
because you don't blame yourself.
HSBC is a sub-prime lender.
this means you have not got good credit.
why? you are only 22 years old. have you not paid your bills? have you used too much credit? the dealer is not trying to "RAPE" you. YOU are the one with the credit issue, not your dealership.
on the flip side of this... if your credit IS good, and you didn't sign the contract on this ridiculous interest rate, then go to another dealership. if you DID sign it, then pray that you got g.a.p. insurance and let someone steal your car, or total it out on your own.
my guess is, at 22, you probably have minimal income, short job time, little credit history, little to no car credit history, or you have let some bills go. have mom and dad co-sign, if they will. if they won't is it because they can't, or because they, too, know you won't pay your bills and that the bank actually has a point with charging you so much interest?
see, the interest rate is like a bet. the bank is essentially putting a 25% chance on you not paying for your car on time, every time.
please please please stop blaming the 'dealership'. the 'dealership' is not responsible for your credit rating.
and, further, a 'smart consumer' such as yourself would NEVER have agreed to a TWENTY-FIVE PERCENT INTEREST RATE! are you insane?
a brand new mitsu isn't worth that. they suck for resale value, and the reason they have such a long warranty period (heh heh, read your fine print on that one, too) is because they NEED IT.
and finally, if you are not planning to keep the car more than a year, why not just buy an old beater and save some money for a down payment? the banks would rather see you make a serious, solid COMMITMENT (i.e. a down payment) to show them just how badly you don't want to pay that interest rate. see, with a down payment, YOU have something to lose, not just the bank.
thank you for asking the question you asked in the way you asked it. i needed the vent.
2007-06-01 21:13:45 · answer #2 · answered by michael_oxgood 4 · 1⤊ 0⤋
You might want to look in to getting it re-financed through a credit union.
It's possible and may save you some money in interest.
2007-06-01 19:34:54 · answer #3 · answered by No Chance Without Bernoulli 7 · 0⤊ 0⤋
25% is very high. You might see if your parents are willing to co-sign on a re-finance.
2007-06-01 19:37:44 · answer #4 · answered by xxted_strykerxx 3 · 0⤊ 0⤋
To have peace of mind call the lender and ask questions.
2007-06-01 19:35:30 · answer #5 · answered by (A) 7 · 0⤊ 0⤋