@Anonymous wrote:
Hi - I have been lurking for a few weeks on this board and learning so much! I am looking to buy a car (Toyota RAV4 or Honda CR-V). I currently have a 2005 Chevy Malibu. I financed this with Nuvell at a really high interest rate (14.5%) because my credit was not so great at the time. I also rolled over WAY TOO MUCH neg. equity into the loan.
The pay-off on the Chevy is around $12,524 and KBB list the Chevy Trade-in value as $7120.
I am hoping to get the RAV or CRV for around 20-21,000.
I just recently got 2 of my free annual reports and paid for the scores:
Transunion 734 Experian 726
I will get Equifax this Saturday and I hope it is 720 or above too - from what I understand they can be tougher.
SO! I am thinking Capital One as a first option but I do intend to try other options (my bank told me 8.8 would be the lowest and told me that they aren't that great for car loans)
How does figuring in the negative equity work when buying the car????
For instance, if Capital One approves a 26,000 loan and I get the car for 21,000 - how will I pay them the neg equity? Will it be added into the price of the car?
ANY help would be appreciated!!!!!
If you buy with negative equity then you are storing up trouble for yourself,
especially if you get totaled in an accident: insurance will usually pay only
what it's worth so you can end up owing money on a car that you no longer have.
Lenders will be happy to roll your negative equity into a new loan, but didn't
you learn your lesson the last time? Don't do that to yourself again, WAIT
till you can pay AT LEAST 1/3 the price of your next car and preferably more.
Borrowing more than the price of a car is even dumber than a 100% mortgage,
because with a car you KNOW you'll be upside down even without a market collapse.
While you are paying down your current loan and saving cash for your next car,
you can also continue improving your credit score by paying every bill on time,
reducing balances on credit cards, etc., etc., so the rate on your next car
will be less costly.
I suggest you keep your current vehicle for a while, and after it's paid off open a
new bank account and deposit what you would have paid on a loan into that account
every month until you have about half the cost of a late-model used car, then get
that. I prefer to be the SECOND owner of a car, so the first owner takes the big
depreciation hit.
I just paid off the loan for my current car (a 2000 Camry which I got in 2004),
and I *could* pay cash for something newer tomorrow but at this stage in my life
(DW and I are both in our forties) our number one financial priority is saving
for retirement so I plan on keeping this Camry for a while longer. It still runs
very well, so I'd rather save instead of splurging. Your 2005 Malibu should have
MANY years of useful life remaining so in your situation you really should hang onto
it for a while longer!
Message Edited by MattH on
04-28-2008 07:11 PM
TU 791 02/11/2013, EQ 800 1/29/2011 , EX Plus FAKO 812, EX Vantage Score 955 3/19/2010 wife's EQ 9/23/2009 803
EX always was my highest when we could pull all three
Always remember: big print giveth, small print taketh away
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