Approved for roadloans at 14%. Any advice?

laruud · ‎04-06-2016

So, we are needing a new car. We have one year left on a car we have right now, but my husband's beater just died. His credit is not good as he recently just got back to work after being on unemployment for so long. his middle score is 582. I have fair credit, around 650's , but no income and no recent credit. We have so much credit card debt from the long term unemployment. Around $4000 in debt. So our options are to sell the beater for part and get another or sell the beater for parts and get a loan? Is it a good idea with all the cc debt and the other car loan? We applied with Capital One auto and was denied, but Road loans accepted us. That's a pretty high interest rate, but we can refinance in the future? I'm lost on what to do. He works over an hour away, and I have kids to drive to school. So, we definitely need two cars. Annual income is around $45000. So, we aren't swimming in money.

Cellice · ‎04-06-2016

@laruud wrote:
So, we are needing a new car. We have one year left on a car we have right now, but my husband's beater just died. His credit is not good as he recently just got back to work after being on unemployment for so long. his middle score is 582. I have fair credit, around 650's , but no income and no recent credit. We have so much credit card debt from the long term unemployment. Around $4000 in debt. So our options are to sell the beater and get another or sell the beater for parts and get a loan? Is it a good idea with all the cc debt and the other car loan? We applied with Capital One auto and was denied, but Road loans accepted us. That's a pretty high interest rate, but we can refinance in the future? I'm lost on what to do. He works over an hour away, and I have kids to drive to school. So, we definitely need two cars. Annual income is around $45000. So, we aren't swimming in money.

I would recommend fixing the beater and spending the next year paying down some of that debt. Then, you can think about purchasing a new car. I would also spend some time fixing your husbands credit.

laruud · ‎04-06-2016

We tried that. The mechanic said the cost to fix it would cost more than the car is worth. It needs a new engine.

6speed8 · ‎04-07-2016

@laruud wrote:
We tried that. The mechanic said the cost to fix it would cost more than the car is worth. It needs a new engine.

Retired mechanic/shop manager/service advisor. Ok an engine is a big expense but is he only giving you the "rebuilt engine" option ? I'd search around for a used engine. Lots of places offer them and will give some sort of coverage. Like AT LEAST a 30 day warranty, cover labor charges if the engine is "bad" for some reason after installation, etc. I did that 10 years ago with our beater 96 Chevy Cavalier. It ate a valve at 165,000 miles. A rebuilt engine was $2500-$3000 installed. I found a documented 59,000 mile engine for $600 and a former employer Goodyear shop charged me about $1200 all in to install and all the misc stuff to go along with the replacement.

CH 7 Discharged 6/10/15
T/U - 643
EQ - 588
Ex - 647 as of 6/14/15

Anonymous · ‎04-08-2016

@laruud wrote:
So, we are needing a new car. We have one year left on a car we have right now, but my husband's beater just died. His credit is not good as he recently just got back to work after being on unemployment for so long. his middle score is 582. I have fair credit, around 650's , but no income and no recent credit. We have so much credit card debt from the long term unemployment. Around $4000 in debt. So our options are to sell the beater for part and get another or sell the beater for parts and get a loan? Is it a good idea with all the cc debt and the other car loan? We applied with Capital One auto and was denied, but Road loans accepted us. That's a pretty high interest rate, but we can refinance in the future? I'm lost on what to do. He works over an hour away, and I have kids to drive to school. So, we definitely need two cars. Annual income is around $45000. So, we aren't swimming in money.

You can typically refinance to a much lower rate after 6 months. Personally, 14% is complete highway robbery on a car loan and I would stay far away from that. With a 650 score, I would try a local credit union. We have one here in Arizona that offers 4.5% fixed APR and you only need a 620 score to qualify.

Anonymous · ‎04-10-2016

How is your(his) auto payment history? Despite low scores, Chrysler & Ford could possibly give you a better rate on a new car. Worked for me. My scores were mid 500's but my auto payment history is strong and I got 8.10% from Chrysler, only put down 1k and rolled in some neg equity. Also Nissan I think could worth a shot as well.

Anonymous · ‎04-10-2016

Cap One has a free pre approval now. I just noticed this the other day. I know before it would cost you an HP.

Anonymous · ‎04-10-2016

I think they were denied by cap one already