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Auto loan with negative equity trade in advice

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Anonymous
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Auto loan with negative equity trade in advice

I’m currently upside down in my loan. March 2016I financed a Brand new Hyundai Sonata at 17K with what I thought was a 5% interest rate. At the time I desperately needed a car and my credit score was 653 Ex. Well fast forward to the present I’ve had twins and need a larger vehicle so I’m looking to trade in only to discover that my interest rate was 11.69% over 72 months. I owe about 20K left on the loan for 48 more months. The KBB offer is 13K for my vehicle on trade in. I’m looking to trade for a SUV. I’ll have about 7K negative equity in the vehicle. My current credit scores are EX. 610, EQ 611, Transunion 645. No collections, no late payments, no missed payments. I have an old charge off from 3 years ago on a NFCU CC . My CC utilization is about 70% it’ll be at 50% Next month and my DTI ratio is 13%. Does anyone know of any options to get me into a new vehicle without having to pay the whole 7K in negative equity ? Thanks
7 REPLIES 7
Anonymous
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Re: Auto loan with negative equity trade in advice

You would have to purchase a brand new vehicle that carried some hefty rebates to not have to put down a large amount of money. I work at a Chevy dealership and we periodically do 20% off the MSRP of new vehicles. Look for something like that to eat up your negative equity because you probably won't get more than 110% LTV from most banks. Definately wait till you your UTI drops to 50% or below and your scores should raise quite a bit.

Message 2 of 8
Anonymous
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Re: Auto loan with negative equity trade in advice

Oh, and don't go off of KBB. Use NADA for trade values as dealers and banks use them as their guideline.

Message 3 of 8
Anonymous
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Re: Auto loan with negative equity trade in advice

Thanks for the advice. How will I know which manufacturers offer incentives and rebates ? Are there certain lenders who are willing to roll over negative equity of this amount ? Or car manufacturers?
Message 4 of 8
Anonymous
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Re: Auto loan with negative equity trade in advice

Just have to watch ads or pull up the websites of the make/model you are looking at and they will have the incentives listed there. If you can find a new 2017 carryover suv right now it should have decent rebates. 

 

All banks are going to limit you on how much negative equity they will roll over. It will ultimately depend on what score, etc they pull when you are ready.

Message 5 of 8
Anonymous
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Re: Auto loan with negative equity trade in advice

So like a 2017 that’s just sitting? Does it have to be new? Will pre owned work ?There’s a Hyundai SUV left over from 17 at the dealer where i got my car. The 18 models are in. I wonder if that’ll work. Also is it true May is the best month to buy a car ?
Message 6 of 8
Anonymous
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Re: Auto loan with negative equity trade in advice

There is really no "best" month to buy a car. You would need to buy new in order to get rebates, yes. The problem with a used vehicle is you will probably be buying it for close to retail value. Then you add tax, fee and your negative and are going to be looking at borrowing thousands over the NADA retail of the vehicle and no bank will do that. You would have to come up with the difference in money down.

 

If it is a new 2017 Hyundai then it should have rebates right now. This is the best time to buy a new "carryover" 2017 that a dealer hasn't sold yet. Best bet would be to call the dealer or stop in and find out how much under the MSRP you can buy it for. The higher the rebate the less you are going to have to come up with to cover your negative equity.

Message 7 of 8
Anonymous
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Re: Auto loan with negative equity trade in advice

Thanks !!
Message 8 of 8
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