Hey everyone,
Looking for some opinions on my situation. I have an idea of what I WANT to do but rather bounce this idea of others before making a wrong decision. This is basically my first thing I'd like to buy after working on raising my credit score.
I currently pay on two vehicles. My 06 Trailblazer is $265 a month @ %9.9 ($5k left) through Wells Fargo. My wife's Uplander is $310 a month @ %7.9 through Wells Fargo ($10.5k left).
We HATE the uplander, and the dealership we have to deal with for it. It has been years of torture but I know the most I can get for it is $8k on trade in and that will be tough to get. I bought an extended warranty which is partially why the pay off is still higher.
I'm paying off all Credit Cards this month and will have some money left over. Hopefully a couple thousand or so.
Ideally I'd like to pay off the blazer and save the %9.9 interest and $265 monthly payment and then see what kind of deal I can work on with the dealership to trade in the Uplander and get her into something nicer. I'm looking at used Town and Countrys. I just don't want to roll $2,500 of negative equity. I've read a lot online about people purchasing new since it's easier to roll negative equity into a new vehicle and easier to get a lower interest rate on a newer vehicle but I can get a lot more features on the van if I buy a 2011 instead of new. If i'm saving $265 a month on the blazer payment then paying $400-$450 for the van payment won't be a big deal at all.
Other option I thought of is taking the couple thousand and putting it down on the newer vehicle. The only way I'd like for this to work out would be if the monthly payment was close to what I pay now. I don't want to pay more than we pay now for both vehicles. The down payment would just be going towards negative equity is the problem.
I'm waiting for my credit scores to go up some before attempting this but would like to get her into something new before Fall. I don't want her driving this Uplander this winter.
Also something to note, my auto enhanced scores should be a lot better than my actual FICO scores. I have one vehicle I paid off about 5 years ago with perfect payments and both the vehicles I pay on now through Wells Fargo have perfect payment history.
When the time comes, should I try to get a pre approval through a place online or since I should have better auto enhanced scores go directly to the dealer?
Thanks in advance!
Starting Score: EQ 574 - 08.28.13
Paying off your wife's car in full would only make sense if you intended to sell it at private sale. Otherwise I would just use it as a trade at the dealership. Once you have determined what they will allow for the trade then you will have the amount of negative equity known. Just plan on bringing cash to the deal to cover at least that amount. If you want to try to secure financing for the next vehicle on your own then the obvious choice would be to call Wells Fargo and ask them what they would offer you. It would be helpful if you had some idea of the amount and type of vehicle. They should be able to give you a pre-approval subject to the vehicle meeting conditions for the loan.
Once you have an interest rate offer from WF then you can ask the dealer to beat it when you have chosen a particular vehicle. As far as payments go just use an auto loan rate calculator to determine what loan amount you can get at a certain payment. Then you will need to make a down payment to bring the bottom line loan amount to that number.
Starting Score: 500'sThe only thing I'm hoping to pay off is my trailblazer. It has %9.9 interest rate and I owe about $5k on it. I wasn't sure if it'd be better off using money to pay that off and save that monthly payment or use that money towards the negative equity on the van to get something nicer. The problem with using it on the negative equity is I will still have the trailblazer payment.
Depending on what type of vehicle you end up trying to get for your wife it may be difficult to bury the negative equity in the new loan. And in general carrying negative equity into the new loan is a bad idea. I would suggest that you may want to just pay off your car to dispose of the higher interest loan and then save the payment you would have made until you can trade in your wife's car without bringing negative equity into the deal.
Between the payments on her car and the savings it shouldn't take long. The major depreciation on the vehicle is in the first couple of years and after that trade in value or resale value decreases much more slowly. So 6 months of payments to her vehicle is not really going to see a great trade in value drop. But you should take a look at not just the present situation but what is good for your families financial future.
Why do you want mini-vans? They have the worst resale value ever. How about putting you and your wife into economical 4DR sedans that get 30+MPG also?
Space. So much room in mini vans. We have a couple big dogs we tote around too. My wife actually hated them at first but when trying one for a weekend with kids it was hard to go back to anything else. Maybe if the kids were 8 or older.
Ahhhhh..... Didn't see anything about kids on your first post 
Believe me, I much rather have a larger SUV. They hold their value so much better but even they don't have the room of a mini van. I've been looking at Town and Countrys with the stow n go seating. Pretty awesome.
I'm leaning towards paying off the blazer and then just waiting until I'm in a better situation for getting her something new. I think the struts are up next for fixing in the van. Thought I might be able to escape that repair too... If I sell privately I could certainly make more but then I have to put more work into the van to try and get that money too whereas the dealer will be more lenient.
I think i'll just give it a few months and see what I can build up for savings and have more money to work with when the time comes.