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Negative Car Equity (embarrassed but being honest) help!

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aplast
Regular Contributor

Negative Car Equity (embarrassed but being honest) help!

Hey Everyone! I have been a member for a while now and seriously surf these message boards everyday! I have learned SO much from this community and I hate to have my first post be a question to everyone, but i am in need of some expert opinions. Last year My credit was not good. I needed a car so I went to the dealership and bought a 2009 honda civic ex. It is financed through Santander Consumer USA. ( I know... I know....) Since then My credit has gotten better! I went to the ford dealership today and was approved to purchase a truck. Ford Motor Credit would finance me at 7% not the best not the worst but considerably better than my 18% interest right now Smiley Sad it makes me absolutely sick everytime i make a payment seeing that almost 90% of it goes to Santander and that just doesnt sit well with me. In your opinions - what should I do? I am 6500 upsidedown on the civic and dont really want to roll negative equity into a new loan. Maybe there is something I am not thinking about!

 

By the Way I have never missed a Credit Card payment - I have never missed a Car payment and I am current with EVERYTHING! I am extremely embarrased that my rate is 18% so please dont rub it in Smiley Happy Thanks in advance for everyones help!

Message 1 of 16
15 REPLIES 15
pizzadude
Credit Mentor

Re: Negative Car Equity (embarrassed but being honest) help!

 

Welcome to the forums !

 

Is there anyway that you can refinance the honda so that you can pay it down before you decide to sell it ?   Rolling this much negative equity into your new loan is going to make it harder for you to pay the loan down if you buy a new car now, and you'll have the same issue in the future if you try to sell it, due to the combination of new car depreciation and negative equity.

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
Message 2 of 16
aplast
Regular Contributor

Re: Negative Car Equity (embarrassed but being honest) help!

thanks for the advice! I would love to refinance it. I have been looking up information on how to refinance - but i feel like an ameture when it comes to this kind of stuff (mid 20s) parents didnt really dig deep when teaching me financial information. I was under the impression that when that upsidedown it would be hard to refinance without bringing tons of money to the table? is this true or no? I heard the loan to value has to be proprotional. any truth to this statement? where should I start?

Message 3 of 16
pizzadude
Credit Mentor

Re: Negative Car Equity (embarrassed but being honest) help!

 

Yes, banks won't loan you more than their valuation of your car, however they might use a book value that is better than a trade~in value, so you might not be in the hole as much as you think you are.     I'd start with a local credit union or bank and talk to them about refinancing.   

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
Message 4 of 16
Anonymous
Not applicable

Re: Negative Car Equity (embarrassed but being honest) help!

I am a very similar situation...I'm about 5k upside down and with all the current rebates I'm strongly considering taking advantage of them with an F150 or Ram.  Honestly, if you love the new vehicle and don't like your current car, and your new payment is reasonable then I see no issues.  For me my payment will stay similar, however instead of 25 payments left I'll have 72...but I'm fine with that since its a brand new car, and what I want.  What I drive now also is thru Santander 16% and in 5 years I'm still at 10k payoff on a car I paid 17k for...its so sad

Message 5 of 16
cbrrider
New Member

Re: Negative Car Equity (embarrassed but being honest) help!

Have you thought of selling the car yourself... you are probably not as "upside down" as you think. Last month 4 different dealers kept telling me I was 1-2k upside down on my 08 350z before I decided to sell it on craigslist. I used dealer retail prices as a guide and I it sold in 3 weeks and I CLEARED $5000 to my pocket. That my friend is the dealers markup $6-$8k....  on a $18k car. Do it yourself and you will see you are not in that bad a shape.

 

 

9/7/12 Equifax- 633
9/7/12 Transunion- 631
Message 6 of 16
jdirilo
Frequent Contributor

Re: Negative Car Equity (embarrassed but being honest) help!

Dont be embarrassed, my interest rates are at 25% & 30%. THATS BAD! I was offered a $12000 loan thru roadloans(santander) & still the interest would be 24.87%.
Message 7 of 16
Shogun
Moderator Emeritus

Re: Negative Car Equity (embarrassed but being honest) help!

I was in the same boat.  I had 2 loans with Santander.  Once I got my credit cleaned up some I went to my banker.  She rolled both car loans into one and dropped the percentage by 14%. 

Starting Score: 504
July 2013 score:
EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+
Take the myFICO Fitness Challenge

Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!

June 2017 update: All scores over 820, just pure gardening now.
Message 8 of 16
aplast
Regular Contributor

Re: Negative Car Equity (embarrassed but being honest) help!

Thanks everyone for the replies and the kind words! So I think what I plan on doing this week is going to a credit union and opening an account establishing memership. at that point I will apply to refinance and hope for the best! im sure they will be able to beat the god awful 18 percent im at right now. My credit still isnt rock solid but I have a few prime cards in my wallet and am certainly going in the right direction with being virtually debt free these days. Is there anything in perticular that I should say or tell the banker ? those who have refinanced can yall give me a run down on the process? thanks!

Message 9 of 16
Shogun
Moderator Emeritus

Re: Negative Car Equity (embarrassed but being honest) help!

I had actually bought a new home.  My loan officer at the bank told me to come back in a month and let's do something about the high percentages on the car loans.  I went back in a month and she did.

Starting Score: 504
July 2013 score:
EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+
Take the myFICO Fitness Challenge

Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!

June 2017 update: All scores over 820, just pure gardening now.
Message 10 of 16
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