upside-down trade-in for new car

Anonymous · ‎12-23-2014

I'm upside down almost 6k on my 2013 car loan. I'm sitting at 570 credit score right now, no open debts besides my car loan and student loans. Working on getting 4 negative files off my report to bring my score up...hopefully almost 100 points if I can get all Pay if Delete go through. If not, I will be able to get a co-signer on my new car loan. I'm wanting to put $3000 down, to help cover my upside down aspect (so I'll only be about $3000 upside down at this point). What is the best way of going about this? Do you think this is feesable?

I owe 14k

Car worth 8k

I put 3k down

I'm upside down 3k

I want a 27k car ... + 3k upside down, finance tota: 30k. If I get my score to mid-high 600's, and cosign...I'm hoping I can come out of this ordeal with decent APR. What do you guys think? I have good income and job history, and never miss any payments now. Had some old collections that I didn't even know about that tanked my score.

Anonymous · ‎12-23-2014

I think you need to focus on removing those four negative files first before considering a new car loan. Why do you need to get out of your 2013 loan now and where are you getting that credit score from?

Anonymous · ‎12-23-2014

I don't plan to tackle a new loan until the negative files are removed, or if I can't get them deleted for payment, at least paid off (so they show Paid in Full). The alternative is waiting 3-5 years for them to fall off on their own, which isn't going to happen. So my goal is to raise my score as much as possible before this summer/fall when I go to get this loan. The reason being, my current car is small. 2 door, sporty. I need something larger. Have a child on the way, and we need something safer, bigger.

thank you.

Anonymous · ‎12-23-2014

@Anonymous wrote:
I don't plan to tackle a new loan until the negative files are removed, or if I can't get them deleted for payment, at least paid off (so they show Paid in Full). The alternative is waiting 3-5 years for them to fall off on their own, which isn't going to happen. So my goal is to raise my score as much as possible before this summer/fall when I go to get this loan. The reason being, my current car is small. 2 door, sporty. I need something larger. Have a child on the way, and we need something safer, bigger.
thank you.

That makes sense. Get writing those letters. There's samples in the rebuilding forum . If you get those removed you'll see a significant score jump. I did one and they removed my one baddie 2 days after receiving the letter. You'll get approved one way or the other but will get a much better rate with scores in the mid 600s

StartingOver10 · ‎12-24-2014

Trading really puts you in a bad spot. It is where the car dealership can really improve their position (and hurt your position) - by giving you less than the car is worth and increasing the amount you pay for the new vehicle.

Where did you get the value of your current vehicle? From NADA or KBB or ???

Consider getting together as much cash as you can while you are working on the baddies and then taking it to Carmax when you are ready to sell it so you start off fresh with the new vehicle and no negative equity. You are already thinking it'g going to be several months from now. You will have to bring cash to the deal, but then when you purchase the new(er) one you can negotiate clean without the trade mucking up the deal.

Anonymous · ‎12-24-2014

KBB - I found that NADA over estimates from my experience. I also looked at the same model, used, among different sites (craigslist, auto trader, ebay motors, etc). I really will only be able to throw maybe 3k-4k so I can't really walk away clean either way. I'm just hoping to get a couple baddies off my report or at least with a cosigner get a lot better of a rate on my new car.

Anonymous · ‎12-24-2014

I want to ask though. If it's not possible to get any of these baddies removed via PFD letters (worse case scenario). If my score stays 570-600, and I put 4k down into this upside-down trade. What are chances of getting a loan approved for a 27k car + upside down aspect? I'm willing to pay upwards to 12-14% APR because I'll shoot for a refinance 6-12 months into my auto loan. I have about 2.5 years of work history at the same job, and I made 49k last year from my job's income. This will only get better as time goes on. I'm 26 by the way.