APR and BMW

[Anonymous]

Hello Great Credit Crunchers!

I do hate to ask for advice without being knowledgeable enough to contribute first but i hope to do so real soon.

A quick question for those who would like to impart advice?

A year and some months ago i had purchased a 2000 Z3 for 8,000, and was able to secure a 7.9% APR through peoples trust credit union with some dealing of the financial manager of a small used auto place on my behalf. This was i think because i never had an auto before. My credit score by the FICO website is right at 600.

The car started to give me problems so again in my inexperience i traded it in for a CPO 2005 BMW Z4 with an optional maintenance plan and such an rolled about 4 grand of negitive equity from the Z3 to the Z4. However BMW gave me a 11.9% APR and unfortunately i did not do any research or education of the car and finance industry at the time so i feel pretty hosed right now after a years worth of education later.

A result is that i am very upside down on the Z4 and i am starting to have upper leg/hip pain from the cramped driving conditions of the small car as i am a larger guy, and it is a stick shift so i cant sit way back to drive. I have paid 3,000 down on the priciple, but because of the APR the other 3,500 has went to interest.

I am not sure what to do at this point. Is it possible for me to trade it in, take another hit to secure a new car if i qualify for BMW's best rate of 2.9 on a 3 Series? I had been approved last july for a 2009 328i at 0.9 rolling all the neg-equity and such into the new car.

I know now the horror of rolling negitive equity but this car is causing me increasing levels of pain and the APR is making it to where i cant get anywhere on the principle. I can work more to pay extra into the balance, but if i can secure a car with a better APR i can pay if not the same car note ( 635 ) then a  little more but most of it will go towards the priciple.

 I know bmw has a pass-fail when it comes to their finances, not sure about lexus, audi, MB or infiniti, which are all other cars id consider.

Any suggestions? Thank you so much for reading!

[Anonymous]

Hello and Welcome to Myfico!!!

After reading your post I understand your feelings that you have. I believe that with a credit score of 600 a 11.99% apr isn't that bad. If you told me your score was 690 or higher then i would say Yes, you got had. As far as getting a new BMW with a 2.99% with a 600 that might be hard to do but then again lately i have been seeing alot of people getting that rate with scores that i wouldn't think would be good enough.

Understand one thing with BMW and going upside down. They go hand in hand i know tons of people that had bmws from the lower models up to a  7s Bimmer. Even with a great APR it will most likely still go upside down unless you get something like a 36 month loan. Nobody can sit here and tell you for a fact if you would or wouldn't get a 2.99% loan. I wish you the best of luck and if you have any other questions i'll try my best to help.

[Anonymous]

Thanks so much for replying!!!!

I definately understand the point of being upside down, at this point i expect it. However i just wanted the chance to secure a decent APR so i wont be upside down on a car that is hurting me ( literally, my lef leg ) for so long. I have no problem with my payments, but as of now, i will be upside down without extra effort in my Z4 for two years more, and the way i calculated, if i got a new 2010 3series i would be upside down for roughly two years as well, so id much rather be in the 3 series in relative comfort for the next two years or so.

I guess my question to you sir is, would it be better for me to just ante up and pay extra into the z4 and try to sell it and start over? Or try to talk to dealerships and see what i can do? Is re-financing an option you think?

[Anonymous]

Well the best way to answer your question is to ask you If you are happy enough with that car to keep making payments for 2 more years?? By the sound of it the asnwer is No. If the answer is in fact no then why not lease the next car??? That way it's their problem after the lease term. If you are anything like me you get sick of the same car after around 3 years.

If it were me I would give them the z4 in trade in or sale it on my own to get more money if you don't like the offer they give you. Then I would take a 36 month lease on the next car. That way after 36 months you can either buy it or give it back. If you lease it and then give it back you no longer have a neg. Then you can buy anything you want with no problem of being upside down on a car. Of course you won't have a car to trade in now but you will also not have to deal with being upside down on the car that you would have had to trade in. I hope that helped answer your question.