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New Contributor
hopeful23
Posts: 94
Registered: ‎06-29-2012
0

Car advice please.

I have had a horrible car situation the last 8 months. My husband bought me a new 2012 Chevy Malibu in January '12. The car is a money pit! I have had several small issues, but the big problem is it's value depreciation. I know when you buy a new car it depreciates quite a bit just by driving it off the lot. Mine has by 17 thousand dollars in only 8 months! It's horrible. We just found a pretty good deal on a 2012 Nissan Maxima. From a lot of research the Maxima will hold it's value a lot better then the Malibu has. The Maxima's MSRP is $38,888, we owe $31,000 on the Malibu. But the max they will give us is $15,000 for it. And the lowest they will go on the Maxima is $31,000. If we do this we will end up owing $48,000ish on the Maxima. If we put $10,000 down we will be right at MSRP on the Maxima. Is it worth getting rid of the money pit Malibu and essentially giving them $10,000 to take the Malibu off of our hands? I can't decide.

 

What we wanted to do is get the Malibu out of my husbands name and get it into mine. My credit has came up a lot since January and I need an installment loan in my name. NFCU will let me borrow up to $19,200 at 6.79% interest in just my name...but there is no way to get out of the Malibu at that amount. 

 

Any suggestions? Other then to never buy another car from the dealership we got the Malibu at...

Starting Scores: EQ – 492, TU – 508, EX – 507 (Lender pull March ’12)
Current Scores: EQ – 591 (FICO), TU – 623 (FICO), EX –623 (CS), CK - 621
Goal: 700+ AND no baddies!

Current Cards: NFCU $4000 CL, Cap One $300 CL (secured), Cap One $300 CL. & an NFCU car loan for $18,500
New Contributor
hopeful23
Posts: 94
Registered: ‎06-29-2012
0

Re: Car advice please.

I should also mention that we will get approximately $3,000 back from warrenties on the Malibu, so really we will be giving about $7,000 to get the Malibu off of our hands...

Starting Scores: EQ – 492, TU – 508, EX – 507 (Lender pull March ’12)
Current Scores: EQ – 591 (FICO), TU – 623 (FICO), EX –623 (CS), CK - 621
Goal: 700+ AND no baddies!

Current Cards: NFCU $4000 CL, Cap One $300 CL (secured), Cap One $300 CL. & an NFCU car loan for $18,500
Established Contributor
andre181
Posts: 626
Registered: ‎07-29-2010
0

Re: Car advice please.

You've already taken the hit for the majority of the depreciation on the Malibu, so why get rid of it? You'll just incur more depreciation on the Maxima. Keep the Malibu and slow the bleeding. Nissan's will hold their value a little better than a Chevy but not in the short term. If you buy the Maxima, it will have depreciated by about half in about a year, just like your Malibu did.

 

You say if you were to buy the Maxima, you might be able to put $10k down to cover some of the negative equity of the Malibu and that you owe $31k on the Malibu.

Why don't you put that $10k toward the loan on the Malibu, that would take you to about $21k owing on the Malibu, and then you can make another few months of payments to get down to the $19.2k and refi in your name with NFCU.

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New Contributor
hopeful23
Posts: 94
Registered: ‎06-29-2012
0

Re: Car advice please.

[ Edited ]

 


andre181 wrote:

You've already taken the hit for the majority of the depreciation on the Malibu, so why get rid of it? You'll just incur more depreciation on the Maxima. Keep the Malibu and slow the bleeding. Nissan's will hold their value a little better than a Chevy but not in the short term. If you buy the Maxima, it will have depreciated by about half in about a year, just like your Malibu did.

 

You say if you were to buy the Maxima, you might be able to put $10k down to cover some of the negative equity of the Malibu and that you owe $31k on the Malibu.

Why don't you put that $10k toward the loan on the Malibu, that would take you to about $21k owing on the Malibu, and then you can make another few months of payments to get down to the $19.2k and refi in your name with NFCU.



This is exactly why I wanted some one else's opinion. I have no idea why that option didn't cross mind my and yet that makes the most sense. Thank you! I guess I just needed a fresh set of eyes about the situtation. Thanks!

Starting Scores: EQ – 492, TU – 508, EX – 507 (Lender pull March ’12)
Current Scores: EQ – 591 (FICO), TU – 623 (FICO), EX –623 (CS), CK - 621
Goal: 700+ AND no baddies!

Current Cards: NFCU $4000 CL, Cap One $300 CL (secured), Cap One $300 CL. & an NFCU car loan for $18,500
Valued Contributor
tcbofade
Posts: 2,177
Registered: ‎09-26-2011
0

Re: Car advice please.

Whether it's Navy or somewhere else, I'd suggest you call for help.

 

I just refinanced an automobile that we were slightly upside down in.  1k or so, and I thought that I'd have to pay that in cash, but my CU would have written up to 125% of the vehicles value...

 

In other words, you may not have to put as much money down on the refinance as you think.



Current Scores: EX 671 (FCR) TU08: 648 Wally (TU08). 08/29/14 Last app 05/29/2014.
Being held hostage in the garden until 01 November 2014.

Zero percent financing is where the devil lives...
Community Leader
Senior Contributor
StartingOver10
Posts: 4,058
Registered: ‎03-06-2010
0

Re: Car advice please.


andre181 wrote:

You've already taken the hit for the majority of the depreciation on the Malibu, so why get rid of it? You'll just incur more depreciation on the Maxima. Keep the Malibu and slow the bleeding. Nissan's will hold their value a little better than a Chevy but not in the short term. If you buy the Maxima, it will have depreciated by about half in about a year, just like your Malibu did.

 

You say if you were to buy the Maxima, you might be able to put $10k down to cover some of the negative equity of the Malibu and that you owe $31k on the Malibu.

Why don't you put that $10k toward the loan on the Malibu, that would take you to about $21k owing on the Malibu, and then you can make another few months of payments to get down to the $19.2k and refi in your name with NFCU.


Exactly right ^^^.  By the way, it almost doesn't matter which vehicle you buy or from which dealership - the hit will be huge when you buy a new vehicle. The only thing that is worse than buying a new vehicle is planning to trade it for another new vehicle in a short period of time! Then you will double your negative equity if you do the trade unless you bring lots of cash to the deal.  To get rid of negative equity you do as stated above. I'm glad you are considering keeping your car - its the much better solution to your issue.

Frequent Contributor
jd5189
Posts: 470
Registered: ‎08-14-2012
0

Re: Car advice please.

You mention this car is being a money pit, what sort of issues are you having with the car? Other than "wear" items (tires, brakes), most repairs out of normal maintenance should be covered under your warranty. Where are you having your car repaired? If it is the same repair constantly, possibly the lemon law might be able to help you.

In my wallet: Amex PRG & Zync, Amex BCE (19.2k), Chase Freedom (5k), PSECU Visa/PSL (20k)
Current Scores: Equifax: 738 (Fako) TransUnion: 721 (Fico) Experian: 717 (Fico)
Disclaimer: I am by no means a financial advisor. My posts are based on opinion, experience, and/or knowledge.
New Contributor
Cellice
Posts: 148
Registered: ‎07-04-2012
0

Re: Car advice please.

[ Edited ]

From what it looks like is you bought a car in their last model year for a terrible price. You can buy a brand new 2012 for 10-12k off msprp right now. No Malibu should have costyou near 30k. The maxima will depreciate just as much. You cannot blame the car for its loss in value because you paid too much. I drove a 2008 malobi for several year without a single problem. If you are having so much trouble with it investigate your states lemon laws.

 

Do not make another terrible financial decision because you made the mistake the 1st time. Rolling that much negative equity is dumb


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