Couple of Questions

[Anonymous]

Okay I have NEVER been late on my car payment. I am no longer upside down in my car loan and I would like to get a new car before its value drops below the amount I still owe.

 One dealer tried to low ball me on the trade ('03 Neon SRT-4) which is fine, I know I can get more for it on the open market, I am not giving it away. In fact, private party I could sell it, pay off my loan and still make a small profit.

 My FICO score is 620 (Vantage 627) which is still considered Non-Prime.

 Here's my question(s) -

 A) I don't want to go through the typical (pay stub/income check) nonsense, so I wanted to put my loan through the same bank my car loan is with now. Is there any disadvantage to this?

 B) My current loan is 14.8% interest, could I expect a one to two point drop or more from the same bank?

 C) How do I get a 72 month loan if the base offer is 60 months?

 Thanks

[Watchmann]

In today's environment I would suggest you forgo the desire for a new vehicle and keep your current car.  It is by far the cheapest way to maintain transportation.  If you get a new car you'll just be  in hock for another seven years.  Break the cycle now and keep this car for as long as you can.  Pay it off and start building a cash reserve so you can eventually get a new car with a decent down payment.  My wife and I drive '01 and '02 vehicles and see no need to get new wheels with the  car payments that come with it.  This takes some discipline, but financially it is worth it.

Message Edited by Watchmann on 12-07-2008 08:35 AM

[Anonymous]

First off, a dealer will always give you about half or a little more of what they would list the car for.  So if you think your car could sell for 5K, they will give you maybe 3K and list it on the lot for 6K.  they want (and need) to make money off it or re-sell it to a smaller dealer.

Second, waiting until you have a sizeable down payment will help alot in getting good financing.

third, going through the bank you are financed through now will still require w/2 and paystubs.  Even more so due to the current credit climate.  No one is going to let you use stated income unless you got o a mom and pop car dealer that will rip you off.

72 months loans are always a bad idea.  If you can not pay off a car in 5 years, you simply can not afford it.  All you are doing is paying tons more interest.  It also means that you will ikely be 4 full years into the loan before you stand a chance of being out from under it's negative equity.  That is longer than most car warranties last.

As far as your current car, one thing to remember....  The current market to sell a car is horrible.  The blue book values listed online or in the books do not take this into the equation when determining the value as these values were set awhile ago.  Honestly, I would be surprised if the resale value of most cars is any higher than what the guides say trade in is. 

[Anonymous]

 Transportation huh?

 Its never been about transportation, an Aries K is for "Transportation".

 A 300W Razor Scooter is "Personal Transportation" and cheap I might add...

 This is about the desire to get a few more creature comforts while maintaining the same level of performance.

 That's all this is about actually. I could keep what I have, but I would be comfortable moving on as well. In an ideal world I would like to have both.

 Oh well...

 I'm not burning up my vacation money to buy a new car. More money down is out of the question.

 I was just reading the board and seeing that many people are getting loans with scores around and below my own. 

[Anonymous]

To gice a more detailed accounting we would need more info on the car (how much owed), what you are looking at buying (new or used) etc.

If I was buying to get a little more comforts, right now is just a bad time.  The credit market is very tight right now and people are definitely having a hard time finding credit at 620 unless they put alot of money down.  If you can sell your car for a lot mroe than you owe, then by all means go for it, but as a trade in you will not get a good deal in the end.

It is a personal decision and the correct financial decision does not necessarily mean it is the right decision for you.  But, it is very easy to get into the trade up rat race and never really develope any equity in your cars or get your real value out of them.  To each their own, but I would be leary of taking on any extra credit in this economy and this credit market.  the only upside is that dealers are doing relly good deals on cars right now since noone is buying.

[Anonymous]

 ""C) How do I get a 72 month loan if the base offer is 60 months?""

It's been my finding that the loan amount will dictate the loan term, ie, <20K=60-month max.  Ford Motor Credit would only go 60-mo on financing 19K for me this past summer.

>20K-they'll go 72, Credit unions will go 84-mo but only on large balances, >25K.  Also, as the term increases, so does the apr.

That's likely a YMMV thing, but that's what I've seen recently.

""" A) I don't want to go through the typical (pay stub/income check) nonsense, so I wanted to put my loan through the same bank my car loan is with now. Is there any disadvantage to this?

 B) My current loan is 14.8% interest, could I expect a one to two point drop or more from the same bank? """

Without knowing more about your credit situation, can't really guess.  Several years ago, establishing and maintaining a banking relationship was the only way you'd get a loan, Today is a different credit day, you'll need to talk to them, and as you've seen, alotta' people get alotta' different deals and rates. Your local bank may not be your best option.

That said, I agree with the others, at this point, unless there is a mechanical reason for needing a different vehicle, your #1 priority should be improving your scores. 

Good luck,

[Anonymous]

Thanks for the replies....

 
 The car I own is a '03 Dodge Neon SRT-4, currently Stage 3R and 380hp+, 11's in the 1/4. Fun to drive, Fun to own, dead reliable despite 100's of 1/4 passes on slicks.

 I can get $11,000 for it as it sits $2800 wheels and all. But I rather not wait for somebody to be interested in it and as you say with the credit crunch, it could be awhile before a party could get funding to even buy it as many don't have $10K+ in cash lying around.

 I owe $8551 as of last week, Dealer Trade Value is $6750, Private Party is $9,300 as it has some minor dings, no accidents and all maintance records. But given Stage 3 cost me $3500 plus another $300 (bargin) to install, $800 exhaust system and $2800 Super lightweight Japanese wheels, I would like and can get $11,000 for it.

 I rather keep it actually.

 One dealer offered a new '08 Dodge Caliber SRT-4 to me for $17,995 which is just under 5K off sticker!

 The "math" I did comes out like this -

 $2500 down (tax and license in California), Take My Trade, $381.42 for 72 months@12% interest (current loan is 14.8%)

 Total Cost -  $19,101

 My score went from 570 to 620 in the three years I have made payments ($341.51) (3 years as of Jan '09 payment). I had the same job then as I do now. I no longer work full time, but part time so my wages have been reduced quite a bit but I have maintaned my car payment and reduced cost elsewhere that does not show up in DTI reports.

 According to Experian is 23% currently

 They say I don't make enough. If the cut-off is $1800 a month, then I am about $400 under that NET.

 They say that's all that's stopping any deal, I find that interesting and they keep coming back with numbers closer to $400+ a month which would throw any DTI report out of wack.

 Let the ecomony worsten I won't loose my job. As long as people keep their 8 and 10 year old cars, I keep selling them parts to keep them running... Pep Boys already did their deep cuts, 55 stores nationwide and our store is under budget along with breaking even or more every month.

 I may be a member of the "Working Poor" but my stress level is WAY below most.

 Maybe I do need to talk to a bank on a personal level, since they are just looking at "numbers"...