In need of serious help

[Missy85]

Hello,

I’m 100% addicted to these forums, I’m a long time lurker but I really need help with this situation.

I’m in need of advice with my current car loan. I financed my first car January 2013 after having twins and needing reliable and spacious transportation. I purchased a 07 Charger with Tidewater with an interest rate of 24%. At the time my credit was horrible and to be honest I’m still working on it. I have had a few late payments this year due to financial problems. After researching I figured I’d try to refinance my loan, well as you can guess because of my credit and the late payments I’ve only gotten denials. To top it off I’m having transmission issues which I’ve been quoted will run me around $2500.00.

At this point I don’t know what to do because from what I’ve been told I have negative equity in the car around $5,000 (hope I said that right). Should I keep the car at this ridiculous rate and get the transmission fixed plus try and put money on the principal. I would really like to get out of this loan but I don’t know if that’s possible. I need to have a car for me and my babies and I feel like I’m wasting money paying a $420 car payment and only $160 is going to principal.

Thanks in advance

[Dustink]

You are in a tough spot, no "solution" is going to be good.

You could get a p2p loan from lending club or prosper. Use the loan to cover the negative equity and provide a large enough down payment to get you a good rate on the new vehicle. Pro's: Getting into a new car with a lower payment...Con's: Two payments

Negotiate with the bank threatening to default if they do not provide better terms. They do not want the cost of repoing a car with $5k in negative equity.

Pro's: Lower payment...Con's: Still stuck with the same broken car

Negotiate a surrender deal. Such as, I will just give the car back if you reduce the deficiency balance.

Pro's: Relieved the burden of the high payment...Con's: Credit score hit and still no car

[Dj4Money]

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@Missy85 wrote:

Hello,

I’m 100% addicted to these forums, I’m a long time lurker but I really need help with this situation.

I’m in need of advice with my current car loan. I financed my first car January 2013 after having twins and needing reliable and spacious transportation. I purchased a 07 Charger with Tidewater with an interest rate of 24%. At the time my credit was horrible and to be honest I’m still working on it. I have had a few late payments this year due to financial problems. After researching I figured I’d try to refinance my loan, well as you can guess because of my credit and the late payments I’ve only gotten denials. To top it off I’m having transmission issues which I’ve been quoted will run me around $2500.00.

At this point I don’t know what to do because from what I’ve been told I have negative equity in the car around $5,000 (hope I said that right). Should I keep the car at this ridiculous rate and get the transmission fixed plus try and put money on the principal. I would really like to get out of this loan but I don’t know if that’s possible. I need to have a car for me and my babies and I feel like I’m wasting money paying a $420 car payment and only $160 is going to principal.

Thanks in advance

---

 One or two variables need to be eliminated.

 First, get the actual value of the car. You can try NADA or KBB, Google will understand either term. You can also call up an appraiser, pay them to estimate the value of the car.

 Once that is established, then we'll better understand what your next course of action should be.

 What could possibly be wrong with your transmision to cost $2,500??? You could buy a used transmission and have it installed for much less! A quick search on LKQ assuming you have a 3.5L engine; the price runs from $500-$900 for used transmission.

 As long as you can afford the labor and associated cost, it can be done for a little more than half.

[Missy85]

---

@Dustink wrote:

You are in a tough spot, no "solution" is going to be good.

You could get a p2p loan from lending club or prosper. Use the loan to cover the negative equity and provide a large enough down payment to get you a good rate on the new vehicle. Pro's: Getting into a new car with a lower payment...Con's: Two payments

Negotiate with the bank threatening to default if they do not provide better terms. They do not want the cost of repoing a car with $5k in negative equity.

Pro's: Lower payment...Con's: Still stuck with the same broken car

Negotiate a surrender deal. Such as, I will just give the car back if you reduce the deficiency balance.

Pro's: Relieved the burden of the high payment...Con's: Credit score hit and still no car

---

Thank you. I'll look into those options. I appreciate your help.

[Missy85]

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@Dj4Money wrote:

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@Missy85 wrote:

Hello,

I’m 100% addicted to these forums, I’m a long time lurker but I really need help with this situation.

I’m in need of advice with my current car loan. I financed my first car January 2013 after having twins and needing reliable and spacious transportation. I purchased a 07 Charger with Tidewater with an interest rate of 24%. At the time my credit was horrible and to be honest I’m still working on it. I have had a few late payments this year due to financial problems. After researching I figured I’d try to refinance my loan, well as you can guess because of my credit and the late payments I’ve only gotten denials. To top it off I’m having transmission issues which I’ve been quoted will run me around $2500.00.

At this point I don’t know what to do because from what I’ve been told I have negative equity in the car around $5,000 (hope I said that right). Should I keep the car at this ridiculous rate and get the transmission fixed plus try and put money on the principal. I would really like to get out of this loan but I don’t know if that’s possible. I need to have a car for me and my babies and I feel like I’m wasting money paying a $420 car payment and only $160 is going to principal.

Thanks in advance

---

 One or two variables need to be eliminated.

 First, get the actual value of the car. You can try NADA or KBB, Google will understand either term. You can also call up an appraiser, pay them to estimate the value of the car.

 Once that is established, then we'll better understand what your next course of action should be.

 What could possibly be wrong with your transmision to cost $2,500??? You could buy a used transmission and have it installed for much less! A quick search on LKQ assuming you have a 3.5L engine; the price runs from $500-$900 for used transmission.

 As long as you can afford the labor and associated cost, it can be done for a little more than half.

---

KBB says $6905 for good condition, my payoff amount for the loan is about $14,400 last time a checked (2 months ago). I was given that estimate from a representative at a bank when I called to find out what the requirements were to refinance. He asked me questions regarding the car and came back with that figure but I think with the transmission problem that will drop the value.

I went to Dodge and was told it would cost $2,500. I was told to go though them to ensure that I have a warranty on the transmission. I know there's a leak and I'm having issues with it getting out of 2nd gear. It is a 3.5L, I've never heard of that site (LKQ) but I'll look into them and consider finding a mechanic.

[Anonymous]

Don't go to Dodge, you can take it to a trans shop and still get a warranty for about $1200-1500 for a complete rebuild.  

[Dj4Money]

 I say fix it first, because depending on what NADA and KBB say, you could likely get what you owe (10 day payoff) from a private party sale.

 As long as you don't have too many late payments, your next car loan the interest rate will go down. Now having said that, there is something to say for getting a used car for $7000 you got selling it and the $500-$1000 you saved fixing it.

 If you have other problems on your credit, you will not qualify for Tier 0, 1 or even 2 finacing. This will result in a rate more than half of what you pay now;  in other words you can expect WAY better than 24%.

 Given the Fed rate is below 1% , I'd say somewhere about 5-8%.

 That said I would still get something smaller than the Charger. I would highly recommend if you want a new car to get a Mazda 3 Hatchback. Reliable, great gas mileage, excellent resale value and it's fun to drive. You can get one for $17,xxxx with the Skyactive 2.0L engine; it will get high 30's/low 40's MPG on the highway. If you played hard ball and with your down got the amount financed to about $10,000; with a good interest rate, your payments would be right around $200 for five years.

 I would also suggest learning how to drive a stick, it cost much less if something goes wrong.

[Missy85]

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@Anonymous wrote:

Don't go to Dodge, you can take it to a trans shop and still get a warranty for about $1200-1500 for a complete rebuild.  

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Thank you, I'll search around for transmission shops and inquire about their warranties.

[Dj4Money]

 Any problems will impact the resale value. LKQ is just a car parts site; an independant shop can rebuild it for less, but it might be more cost effective to get a used one.

 There is less labor involved and you'll get your car back faster. If you have a leak, you need to know where it's coming from. It might be a seal that has been damaged some how. Not sure why it would not want to shift into 2nd; what is your fluid level and does this happen with the transmission is full of fluid or only happens when it's near empty?

  If the trans is leaking where the driveshaft meets the transmission, that's only a few hundred to replace (parts and labor) any local transmission specialist can do this for you.

 
 If it's leaking where the input shaft and torque converter come together, it will be more costly because of more labor but it will still be much less than $2,500, way less.

 Given all this, it will still look like your upside down with the car being worth about half of what it the loan is. I still say my previous suggestion stands. If you get max trade-in value and 100-120% financing, it could mean a new car and even with the leftover value of the Charger rolled into your new car loan, the much lower interest rate would mean your payments overall will be somewhat lower than they are now.

 As long as you get it fixed and then grill them on trade-in value, it should turn out pretty well. 

[Missy85]

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@Dj4Money wrote:

 I say fix it first, because depending on what NADA and KBB say, you could likely get what you owe (10 day payoff) from a private party sale.

 As long as you don't have too many late payments, your next car loan the interest rate will go down. Now having said that, there is something to say for getting a used car for $7000 you got selling it and the $500-$1000 you saved fixing it.

 If you have other problems on your credit, you will not qualify for Tier 0, 1 or even 2 finacing. This will result in a rate more than half of what you pay now;  in other words you can expect WAY better than 24%.

 Given the Fed rate is below 1% , I'd say somewhere about 5-8%.

 That said I would still get something smaller than the Charger. I would highly recommend if you want a new car to get a Mazda 3 Hatchback. Reliable, great gas mileage, excellent resale value and it's fun to drive. You can get one for $17,xxxx with the Skyactive 2.0L engine; it will get high 30's/low 40's MPG on the highway. If you played hard ball and with your down got the amount financed to about $10,000; with a good interest rate, your payments would be right around $200 for five years.

 I would also suggest learning how to drive a stick, it cost much less if something goes wrong.

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Thank you. I'll start looking into getting it fixed at a transmission shop. From what I'm understanding get it fixed, sell it to a private party, and then pay the remaining balance I owe on the loan. Is that right? 

I don't believe that I've seen that Mazda before but as long as I can get 2 car seats in the back and a double stroller in the trunk I'll be happy.