Negative Equity Auto Advise

[Anonymous]

I've recently gotten myself into a negative equity situation with a new car purchase made last October. At the time, we accepted pretty tough terms for a 2016 Ford Focus financed with Santander at an APR of about 23%. We purchased the car for about $19500, and now still owe about $19000, while the car is now valued at about $11000-$12000. I know making higher payments can help lower this and thus help this situation, so my goal is to add at least $100-200 extra onto every monthly payment I can.

My credit score was less than ideal then, and probably would have been best just to wait on the vehicle. It's been about six months into the loan, with no late payments. Is it smart to attempt to refi soon? Should I wait until the loan has more time established and is payed down lower?

The only other credit I have is a $1000 secured visa through Arrowhead CU, (opened September 2016) and a new approval from CreditOne for those less than ideal terms.

My FicoScore shows on the Arrowhead card most recently as 612.

Any help or advise here would be ideal.

[Appleman]

It is never too soon to refinance to save money. However, you may have difficulty getting refinanced with that much negative equity.

You are spot on with paying extra. You will need to follow up and ensure that the additional money is going to pay down the prinicpal and not jiust pushing back the due date.

I would recommend you try the Capital 1 auto navigator where it will only be a Soft Pull (SP) to see if you qualify for a refinance.

[Anonymous]

Yeah, it's quite a bit difference... I'm not too sure if it goes to principal or not, I'll have to double check.

Cap1 denied me on the SP, but hopeful maybe in the future? 

I did call Arrowhead CU, they're saying if I apply for the refi with them, they'd value the car at about 13000, and could offer at most 16000. That's the best I'm seeing so far, is it worth looking into NFCU? Don't currently have a membership there but could get one if needed. 

[CreditCuriosity]

either making huge payment or a lease is the best ways out of big negative equity..  I was upside down a few cars ago by 9k when my credit was blah and was at 10% interest then leased a lexus at a good rate when credit was alot better and the negative equity was gone in about 26 months when I ended lease and bought a new car with them buying out my lease with zero what i owed on it..

My credit was in the 570 when I had the 10+apr now i am in the 730ish Auto enhanced scores..  So scores need to be on par to get into a good lease to go that way otherwise big payments is your best bet and work on imporiving your credit.  Best of luck

[Anonymous]

I hadn't thought about a lease.. also just established membership with NFCU and got some info, they'd finance most of the loan, I just need to get the payoff amount down about $1000 to be able to apply, so that seems promising

Thanks for the advise!