Need advice

[Anonymous]

My wife has a current auto loan at %25 interest rate and we are about 8k in negative equity, we are looking at a new toyota corolla for about 17k. We would both go on the auto loan and her scores are EXP 610 TU 627 EQ 615. Mine is EXP 615 TU 586 EQ 570. I have an auto loan with 2k left on it and combined we make 6k a month with 22% Debt to Income ratio

[settleordelete]

Are you trading in the car with the $8k in negative equity? If so, take it to Toyota and have them do an appraisal. It could be worth more which would lower the amount you'd roll into the Corolla payment. Plus a $17k corolla should be easy to get even with your scores, income and joint approval. Good luck.

[Anonymous]

Thanks @settleordelete.

I will be trading in the car with 8k in negative equity, do you know any rates I would be looking at or having to put money down by chance?

[settleordelete]

I pulled a 680 I believe from Equifax in 2010, the Toyota finance guy showed me a 710. However the interest rate was 4.9% for 60 months or 5.9% for 72. with no money down and $5500 negotiated off the car price.

Might I add, it would be beneficial to you to print the internet price for the car off their website. Take it with you and present it during negotiations. I did that for my 2010 Camry that they were so desperate to sell until I presented them with the much cheaper internet price.

[Appleman]

IMO I do not think they will be able to hide $8,000 of negative equity in an entry level Corolla. Trying to make a $25,000 loan on a Corolla would take some creativity. I imagine you will need to pay down some of that negative equity to get a deal that is not 25% interest again.

Now if you were looking at a vehicle advertising $10,000 off, maybe a Ram Truck, they can put the $8,000 in negative equity in that loan and you are getting a loan that is around MSRP. A financial planner would advise against it but you are the only one who knows your needs.

If you have a Carmax nearby, go in and get their FREE buy offer. This can take 30 to 60 minutes depending when you go. They will give you an offer to buy your car that is good for 7 days. This will give you a realistic appraisal of how much your trade is worth to a dealer.

You can try the Capital One Auto finance site to see if they would approve you based upon an initial soft pull of credit.

Is there any way to keep driving the car with the negative equity? At 25% interest, additional principal will really save you some money.

I certainly wish you luck.