Senior Contributor
MattH
Posts: 3,245
Registered: ‎04-03-2008
Re: Quick question about trading in my car.... Please help me.?
[ Edited ]

lil_genuine2004 wrote:
Me and my mother basically got screwed 3 years ago (i didnt know what i know now) when we financed through a bank (dont say their name) at 18.2% interest on an auto loan that doesnt mature for another 3 years. So, we're talking 2005-2011 for an auto loan at 18.2%.

The car is a 2002 Ford Explorer XLT, which retailed at around $18,000 when we bought it. Now, I'm stuck paying 459 dollar monthly payments on a USED car that's 6 years old now. What are my options? we have about $17,000 or so dollars left to pay on the auto loan.

I tried to go to a credit union and get my auto loan refinanced, but he told me they cant refinance it at more than what it's worth (my car is valued at 10 grand right now) My auto loan from the bank has a buyout of 13 grand right now. Should i just try to trade it in at the dealer and plead with them to refinance my loan too? I mean, the montly payments are 459, we send 500 dollars to them every month and it's on TIME every month.

PLEASE SOMEONE HELP!! will the lender (dealer or credit union) look at my Perfect, and timely payments so far and say "Hey, you were able to make those high payments on time EVERY month, so you seem to have a handle on it"? Or will they just say fuk it?




Your best option now is find ways to cut other living expenses so you can pay much more than 500 dollars per month into that loan for a while. WAIT until you have built up some equity, and then buy a used car that costs NO MORE THAN FIVE TIMES the amount of cash plus equity you bring to the transaction. Do not buy a new car until you can bring at least 25% of its price in cash plus equity to the transaction, because a new car instantly drops in value the moment you buy it. Do not even consider starting off already upside-down on your next car, new or used.

And don't tell me you NEED to replace that 2002 model now. I myself am driving a 2000 Camry I bought in 2004 and plan to keep until maybe 2009. You may think it's expensive to maintain because some things will need to be done, but even several major repairs cost a lot less than a new car would.

PS: take a look at the calculators section on www.bankrate.com and check out auto loan calculator. Enter the numbers for your loan and click the Amortization Table button: you will see that by now you have already paid most of the interest you are going to pay on this loan, so by this point that high rate is mostly water under the bridge, it's really too late for a refi to do all that much good, just pay it off as quickly as possible.

High schools really should have a required class in personal finance in which they look closely at some realistic case studies before learning it the hard way.

Message Edited by MattH on 05-24-2008 12:44 PM
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