bought a new toyota today

Anonymous · ‎09-19-2015

well i had to face the fact my beloved 2011 xterra was too expensive for my lifestyle right now and i was majorly upside down from carrying over $3k negative equity when i bought it and then keeping it for a year and a half with 9.29% interest. i did a skip a payment once and also refinanced it in april for 6.29% and that still kept me upside down pretty good. bought it in 2013 with 27k miles and traded it today with 80k. i drive a ton so yeah i rolled over $6.8k today. luckily some rebates and going through toyota financial helped.

after negotiation i was able to get 2.45% interest for 72 months. is that decent overall usually?

Anonymous · ‎09-19-2015

oh and in case anyone is interested got a 2015 corolla LE Plus

EddieK · ‎09-19-2015

Yes, interest rate is good. But you're gonna have to change your screen name now.

Starting Scores:
1/19/14:
1/28/14:
2/12/14:
Current Scores:
7/10/19:
12/17/16:
9/05/17:

Anonymous · ‎09-19-2015

i know

is that possible lol.

EddieK · ‎09-19-2015

Lol...i think it is, but have no clue on how to do it. Supposed to put in a request to someone. Anyways, congrats on the new car and lower payments.

Starting Scores:
1/19/14:
1/28/14:
2/12/14:
Current Scores:
7/10/19:
12/17/16:
9/05/17:

Anonymous · ‎09-19-2015

lol thanks. it smells strange in it lol.

Anonymous · ‎09-20-2015

Man,... i hate to be a Debbie Downer, but i'm going to have to be real in this situation since this forum is about the betterment of your finances.

Cars and car loans should not be mixed with your short term financial goals. This forum often confuses major purchases with something as elementary such as a credit card application. I wish you consulted the forum before making a big decision like this. I'm not a fan of piling negative equity upon more negative equity. And on top of this, you're now facing depreciation from this new car too. This is before reaching an equity situation and actually paying down the car.

One thing i've learned throughout the years in my profession is: the borrowed amount is of supreme imporrtance in a loan, not the APR. This is why the borrowed amount is called the "principle". I'm always conservative with finances. Make additional payment towards the principle, and do not trade in this car until the loan becomes of SIGNIFICANT EQUITY.

CH-7-Mission-Accomplished · ‎09-20-2015

@Anonymous wrote:
Man,... i hate to be a Debbie Downer, but i'm going to have to be real in this situation since this forum is about the betterment of your finances.

Cars and car loans should not be mixed with your short term financial goals. This forum often confuses major purchases with something as elementary such as a credit card application. I wish you consulted the forum before making a big decision like this. I'm not a fan of piling negative equity upon more negative equity. And on top of this, you're now facing depreciation from this new car too. This is before reaching an equity situation and actually paying down the car.

One thing i've learned throughout the years in my profession is: the borrowed amount is of supreme imporrtance in a loan, not the APR. This is why the borrowed amount is called the "principle". I'm always conservative with finances. Make additional payment towards the principle, and do not trade in this car until the loan becomes of SIGNIFICANT EQUITY.

While I agree that negative equity is always a bad situation, you have to pay back the negative equity one way or another. If you do not have the funds to pay down the principal balance to get into the black, it is better to repay the negative equity at 2% versus 9% or 18% or whatever.

Yes, there is dramatic first year depreciation on a new car, etc., but that occurs whether you are rolling old negative equity into the new car or not.

Just be sure that the car you are now buying you intend to keep for four or five years, and do make additional principal payments as you can, ideally sending in a double payment each month.

For some people, getting out of a high interest rate, high payment that involves rolling negative equity into a new loan is a much better option if you can drastically reduce the interest rate, reduce the loan payment by buying a cheaper car, and paying off the negative equity faster by doubling up on payments.

I don't think it makes sense for folks to repay negative equity at 18% when they could repay it at 2%.

Anonymous · ‎09-20-2015

^ yeah. my old payment was $445 and my payment now is $393 so i will try to pay the $445 still.

Anonymous · ‎09-20-2015

CH-7-Rebuilding wrote

While I agree that negative equity is always a bad situation, you have to pay back the negative equity one way or another. If you do not have the funds to pay down the principal balance to get into the black, it is better to repay the negative equity at 2% versus 9% or 18% or whatever.

Yes, there is dramatic first year depreciation on a new car, etc., but that occurs whether you are rolling old negative equity into the new car or not.
Just be sure that the car you are now buying you intend to keep for four or five years, and do make additional principal payments as you can, ideally sending in a double payment each month.

For some people, getting out of a high interest rate, high payment that involves rolling negative equity into a new loan is a much better option if you can drastically reduce the interest rate, reduce the loan payment by buying a cheaper car, and paying off the negative equity faster by doubling up on payments.

I don't think it makes sense for folks to repay negative equity at 18% when they could repay it at 2%.
:

Wonderful take on this situation, I was thinking about it the samliar way in my head, just couldn't put down into words ...

OP, congrats on your new ride, tho its different than what you have before, but Corolla is very nice looking car, and you don't need to stop for gas as often .