topic Re: How to get out of a 25% interest rate on auto loan? in Auto Loans

How to get out of a 25% interest rate on auto loan?

Anonymous — Wed, 26 Feb 2014 08:58:19 GMT

When I first got my car, a 2003 Toyota Corolla LE from Carmax almost a year ago, I had no credit. My credit is now fair-good depending on which agency you use. Unfortunately, since it is a 2003, I cannot get the car refinanced. I have a 24.99% interest rate, and it is killing me. Is there anything I can do? I still have lmited credit history, though what exists is good. My utilization is a little high, about 40% overall. My length of history is short, and unfortunately, I have 18 inquiries - That one SUCKS!

What can I do about this? I dont want to apply for anything unless i'm sure I will get approval, Trying to get a mortgage, and then trying to get more cards to have a higher total limit is what got me to 18 inquiries, and i dont want another one unless it works.

I talked to my bank (UMB) and they said there is not a good chance of getting approved for an unsecured personal loan, and zero chance of refinancing a car that old. Whats frustrating, is that the car only has 80k miles on it, it still has at least another 1/2 million miles - did i mention its a Corolla? Maybe even another 750k.

Any advice is greately appreciated. Please no sarcastic or rude comments.

Re: How to get out of a 25% interest rate on auto loan?

dabrian — Wed, 26 Feb 2014 10:23:17 GMT

Try DCU and NFCU if your eligible. My local CU NSECU will finance older cars so there probably are others that will as well.

Re: How to get out of a 25% interest rate on auto loan?

Remember0 — Wed, 26 Feb 2014 19:08:44 GMT

I think DCU does cars upto 12 yrs old (but has to be paid off before your car gets to >12 yrs). Call them and ask.

Ultimately it might be hard to refi this. How much do you have left and are you also upside down (compared to NADA retail)?

Re: How to get out of a 25% interest rate on auto loan?

Anonymous — Thu, 27 Feb 2014 05:34:17 GMT

Lol, im drowning... NADA prices it at retail for $7750, I still owe 13.2K on it(just the principal). Carmax was great, as far as friendliness, and I love the car, had everything, including floor mats, spare tire, all the fluids were fresh, etc. But DAMN! they are overpriced.

Re: How to get out of a 25% interest rate on auto loan?

Creditaddict — Thu, 27 Feb 2014 17:05:13 GMT

Where you able to buy the house?

What credit cards do you currently have with limits and balances?

Re: How to get out of a 25% interest rate on auto loan?

Remember0 — Thu, 27 Feb 2014 17:18:52 GMT

@Anonymous wrote:
Lol, im drowning... NADA prices it at retail for $7750, I still owe 13.2K on it(just the principal). Carmax was great, as far as friendliness, and I love the car, had everything, including floor mats, spare tire, all the fluids were fresh, etc. But DAMN! they are overpriced.

You aren't going to get ~170% LTV refi'ed. Can you being say 4-5k to the table to refi? Only then really will it work imo. And I agree Carmax is expensive especially for older and higher mileage cars. Aka you are much less underwater if you spend a little more say ~15k at carmax than if your budget is ~11k.

Re: How to get out of a 25% interest rate on auto loan?

vinciano — Wed, 05 Mar 2014 18:05:52 GMT

Could you buy a new car? I had 24.89 APR with Santander. Last night I went to a Ford dealership and got a new car, with a 3.9 APR. I owed $13,920 on a car with a value of about $9,800. They rolled the $4,120 negative equity into the new loan. I paid no money down. Got all of this done with an auto enhanced Equifax pull of 588.

Like yourself I tried to refinance, but the best rate I could get was 10.99%. Wasn't really in the market for a new car but when Ford Motor Credit gave me a 3.9% it made most sense to just roll the negative equity into a new loan with a loan APR.

Re: How to get out of a 25% interest rate on auto loan?

Remember0 — Wed, 05 Mar 2014 18:37:49 GMT

@vinciano wrote:
Last night I went to a Ford dealership and got a new car, with a 3.9 APR. I owed $13,920 on a car with a value of about $9,800. They rolled the $4,120 negative equity into the new loan. I paid no money down. Got all of this done with an auto enhanced Equifax pull of 588.

Whoa, nice rate. Any auto baddies out of curiosity? I'll have to keep that in mind when I see <675 scores!

Re: How to get out of a 25% interest rate on auto loan?

juggalo9er — Wed, 05 Mar 2014 22:43:31 GMT

my interest rate was 20.54, i just ponied up the cash and asked the credit union what i had to do to get out of it. 2k in my case

Re: How to get out of a 25% interest rate on auto loan?

Anonymous — Wed, 05 Mar 2014 23:31:37 GMT

@vinciano wrote:
Could you buy a new car? I had 24.89 APR with Santander. Last night I went to a Ford dealership and got a new car, with a 3.9 APR. I owed $13,920 on a car with a value of about $9,800. They rolled the $4,120 negative equity into the new loan. I paid no money down. Got all of this done with an auto enhanced Equifax pull of 588.

Like yourself I tried to refinance, but the best rate I could get was 10.99%. Wasn't really in the market for a new car but when Ford Motor Credit gave me a 3.9% it made most sense to just roll the negative equity into a new loan with a loan APR.

I was just being super picky. I insisted on a Toyota Corolla with a standard transmission. It was the only one they had in the country. I knew a little more money and I could have had a better value, but I was insistent on what I wanted.

I think I will check out Ford then. If they can offer a less than 10% loan, even with the negative equity, I could still be saving, Just need to find a car that I like - i'm not a ford fan. I wonder if Nissan or Hyndai could pull this off? I would really love a Sonata.