topic Re: Auto loan Dilemma in Auto Loans

Auto loan Dilemma

Anonymous — Mon, 19 Oct 2015 13:01:07 GMT

So it pains me even writing this. But here it is. My girlfriend bought a 13 kia soul this past January. She decided to go to the dealer without me, so she was anal **bleep** by them. Her interest rate is 21%. Her payments are 402 for 72 months. The current buyout is 15,xxx. Not to mention she hates the vehicle with everything she has in her, and its ugly as sin(Puke green color). Well the car is worth no more than 10k. THIS WAS A TERRIBLE DECISION BY HER NO DOUBT!!!

I know she could put up 5k and give the car back. Or she could finance another car and have that extra 5k added to the new loan. But we don't want to do either. What are ALL my options aside from that?

Re: Auto loan Dilemma

Anonymous — Tue, 20 Oct 2015 21:15:01 GMT

Any takers on this one?

Re: Auto loan Dilemma

jayy_sc — Tue, 20 Oct 2015 22:16:09 GMT

You can always try paying off the car in larger chunks so that when you do trade it in, the negative equity won't be as much. Although it's a double sided knife because the more time with the car means more mileage and more depreciation. If she can possibly pay off the principal to the 10k or even 11 or 12k then there won't be as much negative equity rolled onto the new loan. She can also try refinancing if her scores improved from when she bought the car Then her overall payoff would be lower. ANYONE CORRECT ME IF I'M WRONG

Re: Auto loan Dilemma

fury1995 — Tue, 20 Oct 2015 22:22:28 GMT

Has she investigated any particular makes/models of cars that she may like.. enough to make the change?

Re: Auto loan Dilemma

Anonymous — Tue, 20 Oct 2015 22:49:59 GMT

I would try refinancing right away instead of rushing into something new.

Re: Auto loan Dilemma

Anonymous — Wed, 21 Oct 2015 01:38:50 GMT

her credit score is around 569. So nothing will happen due to that.

What if i just dropped the car off at the dealer or had it intentionally repoed. Besides horrible credit for 7 years, are there any other implications?

Re: Auto loan Dilemma

Anonymous — Wed, 21 Oct 2015 02:22:30 GMT

I'm sorry to be blunt but that's the most ridiculous thing to even consider. Your upside down by 5k. It really isn't the end of the world, tons of people are in worse situations.

What she really needs to do is dump a little extra into the payments and continue with her other obligations and hopefully get her score to rise so she can refinance it, then possibly trade it in if and when it gets the positive equity.

I think looking at another car and carrying the 5k in the red, plus the next few thousand you'll lose just pulling off the lot.

She really needs to try and just stick with this car and hopefully refinance it soon.

What's the rest of her profile look like? I would think on-time payments from this auto would have boosted her score a bit enough to refinance after the initial loan from January. If she has some baddies or BK on her report and hasn't rebuilt much yet that would explain the current 569 score.

Is that a FICO or FAKO score? Also, if she hasn't she should sign up to get some FICO scores especially to see her auto enhanced score. Hopefully this helps a bit, good luck to you both!

Re: Auto loan Dilemma

Anonymous — Wed, 21 Oct 2015 02:40:19 GMT

that was the score that the dealership gave us when they ran her credit. Her report has tons of collections on it.

Re: Auto loan Dilemma

StartingOver10 — Wed, 21 Oct 2015 02:52:42 GMT

Before she makes any decision she needs to pull her own actual credit report at www.annualcreditreport.com but only the report not the score. Have her pull her 3B report here so she can see the scores.

I wouldn't put much stock in the report the dealer used - it may be accurate, it might not be accurate.It is critical she get her own reports and scores so she can begin her credit repair journey.

Agree with the others, dropping off the vehicle at the dealer is a repo and she does not need another negative account. As pointed out, she can work through this $5k negative equity and it may not take long at all.

First thing is to slow down and think through the possiblities. She can clean up her report - some people have done it very quicky others take a little longer. In the meantime she keeps making the payment until she improves her scores. As mentioned, she can go to the Rebuilding your Credit forum to see what to do to get her credit report cleaned up. Once she gets into the low 600s she can refi into a better rate and then sell it after she is closer to breakeven. Jumping from vehicle to vehicle won't help her improve her scores.

Re: Auto loan Dilemma

Anonymous — Wed, 21 Oct 2015 02:54:53 GMT

Totally agree with everything StartingOver10 stated. Pulls CRs and see how she can possibly clean up her reports. Also if that score was from January it may have improved a decent amount with the collections aging from that time along with on time payments towards the auto note.

Re: Auto loan Dilemma

Anonymous — Wed, 21 Oct 2015 02:59:11 GMT

i just made her join karma. Is that sufficient?

Re: Auto loan Dilemma

Anonymous — Wed, 21 Oct 2015 03:10:21 GMT

It's sufficient enough for seeing the negatives on 2 of the CR. She won't be able to see the 3rd unless she signs up here at myFICo or another FICO monitoring service.

Also, the scores provided by credit karma are FAKO scores and are not typically used as a basis for certain credit approvals. If she wants true scores she will have to purchase the reports from here or another service.

Re: Auto loan Dilemma

Anonymous — Wed, 21 Oct 2015 03:14:25 GMT

im not concerned with those scores. I am interested in the report information. Currently, they are about 50 points from my fico. So i know they are not accurate.

Re: Auto loan Dilemma

StartingOver10 — Wed, 21 Oct 2015 11:15:51 GMT

In my case Credit Karma is 80 to 100 pts lower than FICO scores....so just ignore the scores.

The reports from Annual Credit Report are free and provide tons more info than Credit Karma. She needs her actual reports to see where she stands so she can work on them. Credit Karma is good to see changes in tradelines and if a line is open or closed, but not much else.

Re: Auto loan Dilemma

fury1995 — Wed, 21 Oct 2015 12:41:10 GMT

Yes, specifically Auto Fico 08 scores are what most regular banks will use. Sme have Fico version 09 now.

Do not try to guess what a lender will do using scores from Credit Karma. CK only scores open accounts.

Re: Auto loan Dilemma

Anonymous — Wed, 21 Oct 2015 12:56:04 GMT

I just got 1 report form annual credit report. It is def better than credit karma. I also have subscription to myfico, so i know right where i am at.

Just gotta work hers out.

Re: Auto loan Dilemma

sccredit — Wed, 21 Oct 2015 13:10:01 GMT

If she absolutely hate sthe car the best bet IMO would be to trade in the car for $10k, put up the $5k. She gets something reasonable that she likes and can afford. Thats just my $.02, i know others will disagree. I have been stuck in the situation of making payments on something you can't stand driving, it sucks.

Re: Auto loan Dilemma

fury1995 — Wed, 21 Oct 2015 13:10:05 GMT

@Anonymous wrote:
I just got 1 report form annual credit report. It is def better than credit karma. I also have subscription to myfico, so i know right where i am at.

Just gotta work hers out.

Well, let me know when you get that.. I have some "insight" into these things..

Re: Auto loan Dilemma

Anonymous — Wed, 21 Oct 2015 13:20:46 GMT

what kind of insight?

Re: Auto loan Dilemma

fury1995 — Wed, 21 Oct 2015 16:58:03 GMT

The kind that gets the approvals IRL.