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Negative Equity Confusion?

Frequent Contributor

Re: Negative Equity Confusion?

It turns out I was right and the finance mgr was wrong. By adding wife's income of 4k a month, Ford approved it at 13.99 no money down. Neg equity was not issue, needed co signer. I decided not to purchase the car from them, don't feel comfortable going back sitting down with their F&I guy.
Message 11 of 18
Frequent Contributor

Re: Negative Equity Confusion?

I actually wound up buying a Corolla LE after all on December 30th 2017. Paid 18,200 OTD for the car but rolled in 4,500 in negative equity, bought GAP for $495, and paid 500 loan fee to Springboard auto, total financed 23,700 at 13.4 for a 72 mo term at 484 a month. Car is way better than I thought with safety tech, roomy backseat, 30 mpg in mixed driving, and free oil changes up to 50k miles. Actually decent to drive. But I am starting to have a little buyers remorse right now as the seats are not supportive with my back issues and are uncomfortable.
Message 12 of 18
Frequent Contributor

Re: Negative Equity Confusion?


@FMC wrote:
I actually wound up buying a Corolla LE after all on December 30th 2017. Paid 18,200 OTD for the car but rolled in 4,500 in negative equity, bought GAP for $495, and paid 500 loan fee to Springboard auto, total financed 23,700 at 13.4 for a 72 mo term at 484 a month. Car is way better than I thought with safety tech, roomy backseat, 30 mpg in mixed driving, and free oil changes up to 50k miles. Actually decent to drive. But I am starting to have a little buyers remorse right now as the seats are not supportive with my back issues and are uncomfortable.

Sorry to hear about your bad experience at the Ford dealership. Finance managers will always try and sell you things you don't need that make the dealer enormous profits. In your case, however, GAP insurance makes sense. 

 

But wow, with that interest rate you'll be paying nearly $11,000 in interest over the life of the loan! That's nearly half what the car is worth; you'll never be above water on that loan. Is there no way you can get a better rate on a different car from another dealer?

 

Message 13 of 18
Frequent Contributor

Re: Negative Equity Confusion?


@ridgebackpilot wrote:

@FMC wrote:
I actually wound up buying a Corolla LE after all on December 30th 2017. Paid 18,200 OTD for the car but rolled in 4,500 in negative equity, bought GAP for $495, and paid 500 loan fee to Springboard auto, total financed 23,700 at 13.4 for a 72 mo term at 484 a month. Car is way better than I thought with safety tech, roomy backseat, 30 mpg in mixed driving, and free oil changes up to 50k miles. Actually decent to drive. But I am starting to have a little buyers remorse right now as the seats are not supportive with my back issues and are uncomfortable.

Sorry to hear about your bad experience at the Ford dealership. Finance managers will always try and sell you things you don't need that make the dealer enormous profits. In your case, however, GAP insurance makes sense. 

 

But wow, with that interest rate you'll be paying nearly $11,000 in interest over the life of the loan! That's nearly half what the car is worth; you'll never be above water on that loan. Is there no way you can get a better rate on a different car from another dealer?

 


I can get 8.10 from Chrysler Capital worst case scenario as that is my rate on my 2015 Dodge Journey which my payment history is perfect with them; I was playing around their website and they pre-approved me for 57K just on my salary of 77K.  I really don't feel like shopping around again as I did that last year. I should have just bought another FCA product (ie: Cherokee or Renegade) but was being overly analytical and thought buying a Toyota at that rate was smart; thinking that I was financing slightly less dollars at a higher rate vs FCA product ,slightly higher payment but would save the difference in gas and resale value after 3 years ect. Also, I just ran an insurance quote replacing my Corolla with either new Jeep and my insurance would drop by almost 600 dollars a year. Reliability is not an issue for me as as I have mechanical breakdown coverage for 7yrs/100K thru Geico on any new car for very little monthly cost. Last tank fill-up  was actually 29mpg in the Corolla and dashboard rattles a lot over some road surfaces. 

 

Problem is I just almost doubled my negative from last year; probably still doable to get out of if I can get NADA trade value which is 14.5K(which I doubt); CarMax appraised my car at 12K. 

 

Any advice? There are a lot of 2018 leftover Renegades in my area. 

 

Message 14 of 18
Established Contributor

Re: Negative Equity Confusion?

Is refinancing an option? I think many banks/credit unions will do it for up to 120% LTV.

Message 15 of 18
Frequent Contributor

Re: Negative Equity Confusion?

Well, 8.1% would certainly be an improvement over your current loan. But for a new car (2018 or 2019), you should be able to get dealer or manufacturer financing at a much lower rate than that.

 

I would do whatever you can to refinance or terminate your loan at over 11% as soon as you can. If you decide to keep the Toyota, then refinancing the loan through a bank or credit union might be your best option. 

 

Message 16 of 18
Frequent Contributor

Re: Negative Equity Confusion?


@ridgebackpilot wrote:

Well, 8.1% would certainly be an improvement over your current loan. But for a new car (2018 or 2019), you should be able to get dealer or manufacturer financing at a much lower rate than that.

 

I would do whatever you can to refinance or terminate your loan at over 11% as soon as you can. If you decide to keep the Toyota, then refinancing the loan through a bank or credit union might be your best option. 

 

Current loan balance is 21.5K; 10 payments into loan.  Rate is 13.4%  I guess I should try FCA dealer where I bought my Dodge sometime this month and see what they can do. Don't think refinancing would be an option with the LTV regardless of my credit scores. 

Message 17 of 18
Frequent Contributor

Re: Negative Equity Confusion?


@ridgebackpilot wrote:

Well, 8.1% would certainly be an improvement over your current loan. But for a new car (2018 or 2019), you should be able to get dealer or manufacturer financing at a much lower rate than that.

 

I would do whatever you can to refinance or terminate your loan at over 11% as soon as you can. If you decide to keep the Toyota, then refinancing the loan through a bank or credit union might be your best option. 

 

Current loan balance is 21.5K; 10 payments into loan.  Rate is 13.4%  I guess I should try FCA dealer where I bought my Dodge sometime this month and see what they can do. Don't think refinancing would be an option with the LTV regardless of my credit scores. 

 

Message 18 of 18