Trying to get away from Credit Acceptance...please advise

[Leonidasz]

Hi all,

Three years ago my fiance had zero credit, none at all. She needed a vehicle quickly and went to a dealership that really screwed her. Long story short she agreed to finance a 2006 Mazda Tribute at 24 percent interest and payments of 434 a month! She has made her payments on time now and with my help, has established her credit, its still new but at last check her score sat right at 700. This loan will be paid off Jan 2014. A friend has advised that we refinance the car. My first call was to capital one, who sends us prequalifed offers for new vehicles all the time. They told us that since the vehicle just hit 100k miles it was disqualified. We have called nationwide bank as well BlueHarbor and got quotes from each of them...but especially blueharbor didnt recieve the best reviews from the sites I visited. Do you guys have advice what direction I should be headed in or is this something we will just have to eat for almost two more years. I am patient and trying to get the best advice I can, I have just never dealt with this kind of trash auto financing in my life.

[sccredit]

DCU

www.dcu.org

[Leonidasz]

Ill check into them, thanks....what makes u suggest only them?

[Drklon]

You could actually be in a good position if you are willing to sell the car, depending on how much interest/principle is coming out of each payment at this point.  If you are still paying a significant amount of interest with each payment, then you have a few options:

1. Throw every extra dollar you have at each payment and pay off the loan early.

or

2. If the payoff amount of the loan is close to the used retail of the car, you could either sell the car on the open market and pay off the loan, then buy a newer car at a better rate with lower payments, or you could take the car into a dealer and trade it in.  The high interest rate loan will be paid off in the transaction and will be replaced by a new much lower interest rate loan now that your fiance has a decent score and (probably more importantly) a perfect car payment history.

Option 2 actually seems kind of awesome, because you will get a newer car with lower payments (but you'll increase how much you have to borrow).  If you want to keep the car, option 1 seems like the best choice.

[Leonidasz]

Thank you SO MUCH for the DCU suggestion. We looked into it, called them, and two days later our loan is refinanced for 4 percent, little better than the 24 she was paying lol. Saving almost 280 per month until its finished......its crazy, thanks alot