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Having difficulty refinancing, thinking to trade in

Regular Contributor

Re: Having difficulty refinancing, thinking to trade in

One thing I could do would be to cancel the Honda Service Contract and have the prorated refund pay down the principle of my car loan so maybe I will be under $16,000 for pay off.  Another thing I guess would be to cancel the gap once I am sure I am trading in or refinancing my car so the prorated refund pays down my principle a little more.  I guess I should find out how much the prorated refunds would be and if it is worth cancelling at this point.

I believe at the time I signed my contract I was charged $595 for each item for 3 years of coverage.

It is kind of funny ironic cause the car salesmen always says having the Honda Service Contract helps to increase the value of the trade in but I don't see it.  I figure it is just a way to make it seem they are giving a better trade in deal then they really are.

 

Thank you all for your input, you all having given me a lot to think about.   Because I am really torn about trading in my car and taking the hit on the negative equity.  I do think I need to regroup and rethink what my plan is going forward.  If I go forward with trading in, I really need to make sure I have all the tools in hand to get the best deal and the same with refinancing.  Cause I know my current bank will not help me out due to my BK.

 Thanks again.

 

Edit:  Checked with Honda Financial, seems I will have to go back to the dealer finance dept where I got my car and have them cancel my HSC and GAP.  Also, the prorated refund will be based on the mileage.  Wow, i guess I really shouldn't get suckered into paying for these plans anymore. 

Uggh, I really hate walking into dealerships, the car part is great but the financing just drains you.  I guess before I go back, I better check with Carmax and see what they value my car at. 

BK Discharge Nov 2, 2015

CS Nov 2--Sept 83
EQ 513--636
TU 481--610
EX 483--637

Moderator

Re: Having difficulty refinancing, thinking to trade in

Good luck - I mean that sincerely. I too hate walking into a dealership. You should be able to get the amount of prorated refund for the warranty and the GAP insurance over the phone or email (I would hope). Having the CarMax quote in hand is an excellent idea. 

Valued Contributor

Re: Having difficulty refinancing, thinking to trade in


pcsavvy1 wrote:

One thing I could do would be to cancel the Honda Service Contract and have the prorated refund pay down the principle of my car loan so maybe I will be under $16,000 for pay off.  Another thing I guess would be to cancel the gap once I am sure I am trading in or refinancing my car so the prorated refund pays down my principle a little more.  I guess I should find out how much the prorated refunds would be and if it is worth cancelling at this point.

I believe at the time I signed my contract I was charged $595 for each item for 3 years of coverage.

It is kind of funny ironic cause the car salesmen always says having the Honda Service Contract helps to increase the value of the trade in but I don't see it.  I figure it is just a way to make it seem they are giving a better trade in deal then they really are.

 

Thank you all for your input, you all having given me a lot to think about.   Because I am really torn about trading in my car and taking the hit on the negative equity.  I do think I need to regroup and rethink what my plan is going forward.  If I go forward with trading in, I really need to make sure I have all the tools in hand to get the best deal and the same with refinancing.  Cause I know my current bank will not help me out due to my BK.

 Thanks again.

 

Edit:  Checked with Honda Financial, seems I will have to go back to the dealer finance dept where I got my car and have them cancel my HSC and GAP.  Also, the prorated refund will be based on the mileage.  Wow, i guess I really shouldn't get suckered into paying for these plans anymore. 

Uggh, I really hate walking into dealerships, the car part is great but the financing just drains you.  I guess before I go back, I better check with Carmax and see what they value my car at. 


Canceling the service contract and GAP are good ideas, GAP only if you are sure you will get rid of the car of course.   Don't buy the sales tactics that service contracts or extended warranties add to resale values, they may on a private party sale but it will be pennies on the dollar.  On a trade in it won't add a penny to the value.    When you get your next car I highly suggest you decline that stuff, GAP is the only thing you need and many car insurers have coverage for very little cost that serves the purpose of GAP.  One great thing about buying a Honda is they are incredibly cheap to maintain and extremely reliable, that is the reason I bought my wife an Accord. 

 

Best of luck with this situation.  I am sure you will ge this worked out and on a path you feel better about.

Gardening till 2018, Goal of 700's by the end of 2017
MyFico Scores Aug 2017: EQ 675 TU 695 EXP 698
Regular Contributor

Re: Having difficulty refinancing, thinking to trade in

I'll add my 2 cents, since I have been a past habitual negative equity roll-over'er Smiley Sad  I think you would be wise to get a rebuilder card or two, you need to diversify your file to get your score to improve any.  I wouldn't look at trading in/refinancing anything for 6 mo, try and pay extra principal payments during that 6 mo.  If the car was bought brand new, a service contract was free money for the dealer.  Get rid of it!  GAP is wise during the first couple years of depreciation for sure.  CUs offer GAP way cheaper than dealers do, for future reference.  I agree with the other posters to join DCU, they are great to work with and give decent rates once you get your score up.

 

Don't buy ANYTHING a salesman OR finance mgr in a dealership tells you...they make $$$ off selling you a car! Not being your friend or giving you good advice!  When you are ready to trade, have your financing in place BEFORE you step foot on the lot....will save you lots of BS and needless inquiries on your CR!

 

Good luck!

Winter 2017 FICO 8 scores~ EX-757| TU-738| EQ-737 Gardening until Summer 2017....at least
Regular Contributor

Re: Having difficulty refinancing, thinking to trade in

Thanks all.  It is all good advice.  I went to Carmax today and my car according to them is worth $12,000.  The sales lady even looked it up on NADA for me and the value was around 11,000 for trade in, around 13,000 if I sold it myself as a private sale.  And one of the dealer's were offering me $11, 250 for trade in so not a big jump.  I ran a True Car inquiry so I am getting all kinds of deals from local car dealers.  Of course, some of those deals sent to me by email sound pretty good till I get on the lot and all of sudden that particular deal doesn't apply to me with my credit score or some such reason.  Even the saleslady at Carmax was nice about the situation, she said with my neg. equity it would be hard to get a deal there with lower payments. I checked what I owe on my car as of right now I owe $16,559.92.  So even if I was able to get 12,000 as trade in, soon as drive whatever car I got off the lot, I will be instantly about $8,000 under water vs ~$4,500 underwater right now.  But I will cancel at the very least my Honda Service Contract that should pay down the principle somewhat. I just hope I don't get jerked around over cancelling my HSC.

I guess I need to be in a stronger credit situation so I can get the car I really want in the future.   I sometimes feel like car salesmen look at me and see "sucker" written across my forehead.Smiley Sad 

 

Edit:  I guess the hardest part about buying a car is walking away from a "good" deal.  The salesman can work those numbers but when you're faced with the Financial Manager, boy, do those numbers go south fast.   Part of me would like that new turbo engine on the 10th generation Civic but part of me doesn't want to go further into debt.  I realize Honda Financial would be happy to have a paid car and new loan under their belt.   I get stuck with payments and having negative equity.  It is just that 5.99% interest vs 17.84% interest looks very tempting. 

BK Discharge Nov 2, 2015

CS Nov 2--Sept 83
EQ 513--636
TU 481--610
EX 483--637

Valued Contributor

Re: Having difficulty refinancing, thinking to trade in

Give yourself 2-3 years to pay down that negative equity and build your scores. When you are in a better position get preapproved with a credit union and you will find the experience so much more enjoyable because you will get the car and deal you want with great terms.  Patience will pay off.

Gardening till 2018, Goal of 700's by the end of 2017
MyFico Scores Aug 2017: EQ 675 TU 695 EXP 698
Contributor

Re: Having difficulty refinancing, thinking to trade in

I'd get out of that 18% loan in a hurry. You're throwing away a fortune on interest now. If you're going to throw away money, I'd prefer to at least let the money be wasted on depreciation on a better, newer car, instead of going towards a bank's bottom line.

You don't really have a great option, but 18% interest is just hideous. Anything I could do to get out of that loan, I would.

Regular Contributor

Re: Having difficulty refinancing, thinking to trade in

Hi all,

 

Well here are some steps I tried to take.  Tried to refinance my car with NFCU but they need me to unfreeze my security freeze with Equifax.  G__D__IT!!!  I had put a security freeze on the CRA years ago cause there had been a partial security breach in payroll.   I have been trying to fix that off and on for years and no freaking luck.  I go to the website and they ask for some 9 or 10 digit number that i was supposed to get.  I don't remember ever receiving.  When I call customer service I get the automated stuff with no clue how to get this darn situation fixed.   It is not clear anywhere what you are supposed to do and in the meantime I get denied credit cause of that darn freeze. 

I am not even sure if I get this fixed I would get an approval for refinance.  So discouraged, feel like just going to  a Honda dealer and see if I can get a deal.

 

By the way, DCU uses Equifax too.  Crap!!

 

Edit:  Good news, finally got a letter with the replacement pin number so now I can unfreeze my credit file at will.  All it took was a complaint to the BBB.   My Equifax file has been frozen since 2010.  Wow for that long no wonder I was having difficulties getting credit at some places.

 

2nd Edit:  Got a letter from Equifax a few days ago stating they had updated my address to my current address.  Wow, considering I had been living at the current address for the last 10 plus years.  I guess Freezing your credit file can cause some unintended consequences.

BK Discharge Nov 2, 2015

CS Nov 2--Sept 83
EQ 513--636
TU 481--610
EX 483--637

Contributor

Re: Having difficulty refinancing, thinking to trade in

No matter what decision you make right now, you need to solve the problem with Equifax. Their customer service may be a pain, but you can't go the rest of your life with credit problems because Equifax is perpetually frozen.

Regular Contributor

Re: Having difficulty refinancing, thinking to trade in

Thanks, Deogratis.  I am working on the Equifax problem. 

I did go to a different Honda Dealer this weekend.  What a bummer....  I have been expressing interest in either a 2016 Honda Civic Coupe EX-T or LX-P or a 2017 Honda Civic Hatchback LX using True Car.  What did they have me test drive a sedan.  Bummed then the FM is like I can get you in a brand new 2017 Honda Fit EX for the same payment you have now.   No just no.   Their APR was 12.99%.  Wow, just wow, I want my life back that I wasted.  ooopss to late. 

I am almost tempted to go back to the original dealer, they at least offered me an APR of 6.99%.   

 Oh by the way, the FM wouldn't take my Carmax appraisel said the month had changed and so did the value of the car.  Excuse me so what if that day was the expire date of my appraisal, it should have been good till close of business that day.  I swear I feel like I have SUCKER written on my forehead or something....

 

Man, I hate it when the FM says oh we can't work that deal the comps are to high or whatever.   

 

I guess I will have to go back to the dealer where I got my car anyways to cancel my HSC and if I am not trading in, I guess I get charged a fee for the privilege of cancelling it.  Bummer. 

 

Maybe at this point I should just get whatever base model Honda Civic and see what kind of deal I can get. 

 

Thanks to you all for all your advice. 

 

BK Discharge Nov 2, 2015

CS Nov 2--Sept 83
EQ 513--636
TU 481--610
EX 483--637