Negative equity and a new loan

[dbdg01]

I have an 09 Nissan altima coupe. I like it, it is reliable and comfortable,and still gets a lot of comments from people who think its new. (I maintain it) My issue is that when I got it I A) didnt know anything about the car buying experience as I had only purchased used from friends with cash, and B) had really poor credit history (see A, and add a divorce). So I currently have a Santander loan at 12%. The current pay off is 14,000. My car is valued roughly at 8,000. I could continue to pay on it; the payment isnt killing me. But, my current score is now 723 (whoop! talk about working hard on it)

So I am in a negative equity situation, I'd like a new car, but more importantly, I'd like out of the loan I'm in. Suggestions?

(oh and in about 3 yrs, i figure I will want a different car)

[SamsungHDTV]

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@dbdg01 wrote:

I have an 09 Nissan altima coupe. I like it, it is reliable and comfortable,and still gets a lot of comments from people who think its new. (I maintain it) My issue is that when I got it I A) didnt know anything about the car buying experience as I had only purchased used from friends with cash, and B) had really poor credit history (see A, and add a divorce). So I currently have a Santander loan at 12%. The current pay off is 14,000. My car is valued roughly at 8,000. I could continue to pay on it; the payment isnt killing me. But, my current score is now 723 (whoop! talk about working hard on it)

So I am in a negative equity situation, I'd like a new car, but more importantly, I'd like out of the loan I'm in. Suggestions?

(oh and in about 3 yrs, i figure I will want a different car)

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Your Loan-to-Value is 175% (14000/8000). Most lenders will auto decline over 110%, some will go 120% and this is regardless of your credit score.

The only way you can refinance is by either making extra principle payments every month until the LTV is in acceptable range or make a large 5-6K principle payment and refinance asap.

If you don't you're LTV will just continue to climb at that high rate.

I'm also a fan of driving the car until the wheels fall off, especially if you're the type to maintain your car.

[dbdg01]

I get refianace offers in the mail all the time, and I thought seriously about it, or to just go trade it in, eat the negative equity and get something new at a lower interest rate. With the difference in interest, I could maintain the same payment on a much larger loan I would think.(payment size is again, not an issue)

[coterotie]

What I would probably do is get a credit card with a 0% balance transfer option or interest free on purchases the first 12 or 18 months.  As an example my Chase Marriott allows me to make my car payments through them with no additionaly fees.  My Barclay's gives me courtesy checks which I can use with 0% for 15 months.  Figure out what the 100% number is.  Go to your local CU and get approved for a  loan for that exact amount for the exact amount of time you currently have left.  The difference in the two is charged to the credit card  and you make payments to retire the CC balance asap.

Once you have accomplished this, should you want to get a new car you will be right side up and if you have some discipline have the zero interest card paid off.  If you can't get it all paid off, then get another Balance transfer card to finish paying it off. 

Given your score you should be able to save at least 9% on the loan.  Just a very rounded savings for you will be $1,260 the first year.  That is more than 25% of your negative equity.

DON'T transfer the negative equity to a new vehicle. 

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@dbdg01 wrote:

I get refianace offers in the mail all the time, and I thought seriously about it, or to just go trade it in, eat the negative equity and get something new at a lower interest rate. With the difference in interest, I could maintain the same payment on a much larger loan I would think.(payment size is again, not an issue)

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[Ragelog]

8000 in trade seems really low for a well maintained even if the most base model Altima Coupe. NADA for a Base 2009 Altima Coupe with Auto no other options and 70000 miles came with a Retail value of 13,375.00 and Clean Trade in of 10,800.00 If this is similar to what you have DCU will refi up to 120% of the Clean Retail Value which in my example would be 13375+2675=16050.00 as the most they would refinance on potentially. 

So it may be worth looking at them. I just refinanced with them got 1.49% for 48 months huge difference versus my prior 17.25%.

I hope this helps.

[Creditaddict]

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@coterotie wrote:

What I would probably do is get a credit card with a 0% balance transfer option or interest free on purchases the first 12 or 18 months.  As an example my Chase Marriott allows me to make my car payments through them with no additionaly fees.  My Barclay's gives me courtesy checks which I can use with 0% for 15 months.  Figure out what the 100% number is.  Go to your local CU and get approved for a  loan for that exact amount for the exact amount of time you currently have left.  The difference in the two is charged to the credit card  and you make payments to retire the CC balance asap.

Once you have accomplished this, should you want to get a new car you will be right side up and if you have some discipline have the zero interest card paid off.  If you can't get it all paid off, then get another Balance transfer card to finish paying it off. 

Given your score you should be able to save at least 9% on the loan.  Just a very rounded savings for you will be $1,260 the first year.  That is more than 25% of your negative equity.

DON'T transfer the negative equity to a new vehicle. 

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@dbdg01 wrote:

I get refianace offers in the mail all the time, and I thought seriously about it, or to just go trade it in, eat the negative equity and get something new at a lower interest rate. With the difference in interest, I could maintain the same payment on a much larger loan I would think.(payment size is again, not an issue)

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what lender do you have that takes credit cards for auto payments with no fees?

OP, Id take the car to carmax and get a real offer of what it's worth then I would go to nissan and pick out a new altima with 0% and make them match or beat the carmax offer and wrap the rest into the new 0% loan and have a new car! or .9% whatever they are offering right now... Infiniti G37 has something super low right now for 72 months and they are easy for approval and they are practically giving those G37 away, I posted about it and someone got one for like $7k off sticker.

[dbdg01]

The card comment confused me as well.

I'd like to hope that my trade in value is low, but I do have high milage. I have traveled a lot, and driven my car from Florida to Lake Ontario(20 hrs), down to the keys (7 hrs) and back and forth to work repeatedly. However, I talked to the manager of the local bank that I use for savings. He has offered me 4% used car rate on 125% of my current car value. or a new car loan.

The Infiniti is actually the car I'd like to replace it with(love the g37 coupe) so I think Ill swing down to Orlando and see what they offer me.

[Creditaddict]

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@dbdg01 wrote:

The card comment confused me as well.

I'd like to hope that my trade in value is low, but I do have high milage. I have traveled a lot, and driven my car from Florida to Lake Ontario(20 hrs), down to the keys (7 hrs) and back and forth to work repeatedly. However, I talked to the manager of the local bank that I use for savings. He has offered me 4% used car rate on 125% of my current car value. or a new car loan.

The Infiniti is actually the car I'd like to replace it with(love the g37 coupe) so I think Ill swing down to Orlando and see what they offer me.

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get your ducks in a row a bit and go on truecar and submit for G37 with the options you want and get some prices from dealers before you go... the one you are thinking about going may be a participating dealer already and then you take the haggle and games out of the pricing of the car.

you know you qualify for .9% 72 month Infiniti financing so then the only left would be the price they give you on trade in and if they will slide the entire amount into the new car which being a g37 with the incentives and such right now you could probably slide $10+k into it negative (I WOULDNT) just saying!

[dbdg01]

Yes, Im not going to roll 10k into a new car. but Im exploring some options. Im in my work cycle right now, so I asked for a quote last night(which is not cool because I got about 6 phone calls while I was trying to sleep. ugh... seriously painful) Tonight is my friday though, so soon Im planning to go into the bank, sit down and get a bit more information on this. then go to the dealers see what they can/will do. 

any advice?

My current car was the first car I bought that wasnt simply a beater from a friend. It has served me well, still looks nice and runs good. I feel sort of guilty wanting to get something different. But I no doubt paid too much(took the first price from the dealer no negotation at all. they arranged everything.) and my interest has been High. so in three years with 450/month payments, I still owe 14000.

[Creditaddict]

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@dbdg01 wrote:

Yes, Im not going to roll 10k into a new car. but Im exploring some options. Im in my work cycle right now, so I asked for a quote last night(which is not cool because I got about 6 phone calls while I was trying to sleep. ugh... seriously painful) Tonight is my friday though, so soon Im planning to go into the bank, sit down and get a bit more information on this. then go to the dealers see what they can/will do. 

any advice?

My current car was the first car I bought that wasnt simply a beater from a friend. It has served me well, still looks nice and runs good. I feel sort of guilty wanting to get something different. But I no doubt paid too much(took the first price from the dealer no negotation at all. they arranged everything.) and my interest has been High. so in three years with 450/month payments, I still owe 14000.

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if you want the infiniti and they give you 10k for your car you are only 4k off... i would think you could buy that new infiniti for slightly higher payments than what you are paying now but have brand new and a .9% finance.

and they always call you instantly, I always send them to voicemail and if they insist on chatting at some point, I tell them I'm waiting for the offer in email and that's where im at... not interested in coming in until i see the email.