What's out there for scores in the 540s??

[Anonymous]

My husband and I own a 2001 Lexus LX470. It was financed back when our credit was decent and the rate is 7.7%. The payments are $588 and we desperately need to lower monthly expenses ASAP.  The thing is a major gas hog, although it is a dang sweet car even if it is 7 years old. We just completed a short sale on our home and are renting. Our credit took a major blow from the short sale, pus we have a couple of deregatory marks from credit cards. Our FICOs are about 540 and 560.

We could possibly come up with $2000 for a down payment. We need something with  a much lower payment and better gas mileage. New or used- whichever. I also know the vehicle is negative equity by about $9k. Ouch.

Which companies out there would offer financing to us with our vehicle as a trade and $2000 down?

[Anonymous]

I hate to break the bad news (and hope I am proven wrong) but I don't think anyone is going to finance 540 FICO with 9K in negative equity.  Even with 2K down.  With the current credit crunch you will need 2K free and clear probably to get any car loan (and that would mean no negative equity).  Also, you are not going to find a lower payment than you currently have.  Figure it this way....The 2K you have for down will cover license, registration, and taxes.  So, that doesn;t even figure into the equation.  The 9K alone would amount to over 200 per month at 15% for 5 years (probably what you would be looking at and maybe even more).  So, to get under the 588 you would have to keep your  car purchase to under 15K or so and there is no way anyone right now is going to fund a 24K loan on a 15K car.  The only exceptions might be some of the SUV's and large trucks that have huge rebates that could be used to cover the negative.  Then you are still looking at a 600 paymant and a gas guzzler.

unfortunatley with a 7 year old car, a refi is probably not feasible (and even if it was the negative equity would kill the deal)

There may be other options (and I hope so) but I only see 3 options here.

keep car until it is paid down below it's value..  (you may be able to talk to the current lender and get them to takle the 2K and refi it if all your payments have been on time, but that is unlikely)

Go out and finance a new/newer car with the 2K down and then let the Lexus be repo'd.  This sucks but since credit is already trashed from short sale, may be the only option and may be where this heads if you can;t get a better payment...

Let car be repo'd and use the 2K to buy a used car to get you buy for a few months to get back on your feet.

none of these are great options and I hope someone else sees a better one.

[Anonymous]

Mickie08- that is what I feared.I highly doubt anyone will finance with a trade-in so upside down.

My husband and I talked about doing just that- taking whatever money we can get together and buying something cheaper, more fuel efficient, and letting the bank repo the Lexus. May be our only option to get out of that huge payment. 

If our scores royally suck, but we have cash down and no trade in, do you think we could even get a new car? I've been looking a little into Mazda 3s, Honda Civics, Subaru Imprezas.......

[fishbjc]

If you have a recent reposession, I doubt that anyone will finance you unless it's a buy here, finance here type of place.   If the auto drives well and is maintained just keep driving it.  At 7.7% interest, it's a good rate.

Can you pick up a p/t job to offset the payments?

I'm sorry to hear of your financial troubles.....it stinks that people are working harder and life is just becoming more difficult..  Just hang in there and take care of yourself.  Times will be good again.

[Anonymous]

IMO, your best bet is not to ruin your credit more by doing a bank repo, but get a 2nd job or similiar to offset the difference.