Can I get financing?

[Anonymous]

Okay I have a 2007 Toyota Camry that has drastically went down in value, I have had it a year all payments on time and looking to purchase an SUV thats 31,000, with a credit score of 580...The camry can be sold I have a buyer but if not how will that work because I am upside down due to changes in value. The credit union wont finance the other vehicle for me although I have no late payments or anything. What can I do? I cant stay in this vehicle because my family is cramped and the value is constantly going down so the vehicle will be much less by next year and worthless to even sell or trade... I am upside down like 5000 in the camry!

[sherrrm]

Don't worry, everyone is buried in their car lol. I bought a 2005 Lexus IS300 at wholesale price 6 months ago and I'm even buried about $1k! Even though you've had no late payments for a year, you're looking for something a tad bit out of reach in price. I would search for something around $10-15k and build your credit for a year or so and then step it up to something 15-20k and then 20-25k and so on. 

[Anonymous]

unless you put a really large downpayment you will always be upside down when u finance a car with an high APR. Your best bet is to try and work on building up your score and pay extra on the car and hopefully your score will improve and then u can refinance or basically trade it in.

[Anonymous]

That 31k suv will drop more in value in one day then the 5k your crrent car is under water. I am not making judgements here but do you NEED a 31k brand new cool car suv? You say you have no lates but have a sub 600 score. You have something that seems you should be concentrating on cleaning up before trying to go even further in over your head. Every car goes down in value big time in the first two years. Stay cramped inthe car you have. They won't financie you because you cannot afford a31k car. FYI I am 50 and have never bought a brand new car. A car that is one to two years old can save you 20 to 30 percent or more. Let someone else take the big hit on depreciation.

[Anonymous]

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@Anonymous wrote:

Okay I have a 2007 Toyota Camry that has drastically went down in value, I have had it a year all payments on time and looking to purchase an SUV thats 31,000, with a credit score of 580...The camry can be sold I have a buyer but if not how will that work because I am upside down due to changes in value. The credit union wont finance the other vehicle for me although I have no late payments or anything. What can I do? I cant stay in this vehicle because my family is cramped and the value is constantly going down so the vehicle will be much less by next year and worthless to even sell or trade... I am upside down like 5000 in the camry!

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1) I'm pretty sure you can get financing, from Roadloans or the like (santander) at an interest rate of about 24%. Because the interest rate will ridiculous, you will upside down the second you sign on the dotted line.

2) A vehicle, IMHO, is not to be looked at as an "investment" that is decreasing in value every second of every single day ------- unless you have a '66 Mustang, in that case I would cry with you. It was purchased as a tool to use for a safe commute. Most especially, a vehicle should not be looked at as a financial investment when it is not even yours. The bank owns it. You agreed to the terms when you purchased it, knowing you will pay $X amount a month for the use of said vehicle, until you get the title or move on to the next shiny car. You will not have an 07 Camry forever. You will use it and be done with it. Moving on to another vehicle, either paid in cash or loan. It's the process for vehicles. People grow and need a bigger car. Understandable. It's not your home, your address. Until it's paid for in full and title in hand, it's borrowed. When you have the title in your hand, you can safely call it an asset.

3) So relax and take this as a learning step. Next time you'll have a larger down payment that will offset the intial decrease in value (helpful when you are ready to refi for a lower interest rate), and it will benefit you too, in making the loan amount financed far lower.

4) Also, when you asked how it would work with your potential buyer and the "changes in value"- the buyer will pay what you sell it to him at, and you will pay the difference to satisfy the loan and award the title to the new owner. It's possible, but not an ideal situation if you still need to replace that vehicle with another auto loan.

[ngerasimatos]

If you think you should be worried, imagine how I feel knowing I am buried about 11k in my car

[IOBA]

IMO, stay with the Camry.  Everything depreciates some.   You can afford the car you have.   Don't look at how much it's depreciated, look at it's current value to you as a vehicle.  Does it get you from point A to point B?  Is it reliable?

Toyota's are famous for lasting more than 200k miles and retaining their value over the course of time.   Once the car is paid off, then it's all positive equity.  

I bought my car in 2008, 22k.  It's now worth 9.5k, blue book.   For me, that was a shocker, but it's ok.  It's paid for, it's  a Honda (also known to easily last more than 200k and to retain long term value), it's reliable, and it provides a valuable service moving us from point A to point B.  If I had had a car loan, I would be upside down.

For future purchases, do everything you can to save up and pay cash for your vehicle.  It makes a HUGE difference in the way you view things.  No more upside down feelings, no more car payment "due date" hauntings.

Good luck.