Re: How to cash in with Cash for Clunkers with Bad Credit?
08-01-2009 11:52 PM
alsa, the original poster, is not coming here to be judged; he is coming here for support. he is a grown person in his 50's who is trying to see if he can improve his credit situation but still partake in this program so that he can alleviate himself of an older car with little value, and perhaps obtain a more efficient vehicle. i think he and his wife ARE CURRENT (as was indicated if you read before judging), and they are making reparations for their financial futures.
I believe we can SUPPORT posters by also pointing out some contradictions in their posts and by bringing up alternatives to their situations. i
The OP has some recent issues regarding income that has negatively had an effect on their credit score.
They are trying to rush to cash for clunkers cash. Which is admirable, but it was brought up by other posters questions of how much cash on hand they did have.
They want a $14,000 (post cash for clunkers cash) transaction.
The cheapest car you have is 90% of the time the paid off car you already have.
a 14,000 deal financed with some of the credit issues described WILL mean at least a 340-360 a month payment.
So if they try to not focus on CFC cash, and start putting aside 320 a month, in one year they will have put aside the equivalent top the CFC money and put themselves in a better credit score position. Quite simply they probably tanked their credit score with the lates and they need to fix that.
360*12=$4320 neglecting any incidental maintenance and fuel efficiency costs
$14,000 at 60 month and 24.9% = 410 a month and total interest of $10,650
$14,000 at 60 month and 8.9% = 297 a month and total interest of $3,807.
assmuing the CFC vehicle is currently running fine and has no projected mechanical issues, Sitting on their current vehicle for a year and "paying themselves" the mid threes car payment they would qualify for will garner them the same cash as CFC cash and hopefully allow them to sort out their score issues and cash on hand issues
"Car Value" is subjective and important only if you are trying to sell the vehicle. paid off and running is invariably cheaper.
Trying to "partake" in a program simply because it exists may not always be the best decision.
trying for a new car after their credit issues are "fixed" makes much more sense then rushing to use CFC cash and getting a high interest rate. Poor scoring and the resultant higher rate will pretty much eat up all CFC savings and put them into a less beneficial transaction then they originally thought.
Credit is not a right, but a business transaction, one that takes into account risk, and charges accordingly based on that risk.
Your credit score is an aspect of your credit profile. Important? yes but just an aspect. Contributing/supplemental information determines the finer point of the deal. Ask any question, respect me not to get mad if the answer is not the affirmation you are looking for,