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Making Car Payments in Hard Times

tidestertidester Posts: 10,110
Have you been "downsized?" Do you have friends or relatives who have lost their jobs? There may be light at the end of the tunnel but we still need to get from here to there.

Let's use this space to discuss coping strategies and methods for keeping up with car payments as we weather the economic storm.

tidester, host
SUVs and Smart Shopper
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Comments

  • euphoniumeuphonium Great Northwest, West of the Cascades.Posts: 3,320
    that she couldn't afford so she immediately went to the Credit Union, explained her case and they rewrote the debt into a more comfortable handling package. BIL didn't buy the Credit Life option when he purchased the F250 and didn't have any life insurance at all.

    When buckled, communicate with the financial institution with hat in hand attitude.
  • tidestertidester Posts: 10,110
    It is nice to know that some lending institutions are willing to renegotiate terms!

    tidester, host
    SUVs and Smart Shopper
  • fezofezo Posts: 9,328
    That agrees with most of my experience with lenders. They tend to be more than happy with someone who is calling them with a problem with the intention of making payments.

    I had a couple of things that slowed payments due to health problems several years back and I was mostly favorably impressed with how it was dealt with. The one I remember most was American Honda Finance who let me skip a month and tacked it onto the end of the loan. That accomplished all I needed and they got their money.

    That said I will say that things are a little meaner out there these days. It's good to hear the credi union doing the right thing.
  • oldfarmer50oldfarmer50 Posts: 6,269
    "...It's good to hear the credit union doing the right thing..."

    I think they have an enlightened self-interest in these matters. The last thing a bank wants is your car. They would much rather have you be upside down with it than them. When you consider the cost to the bank of repoing and selling your car combined with the depreciation they are motivated to work with you.

    The secret is to call the lender BEFORE you default on the loan. It amazes me how people in financial trouble will bury their heads in the sand until it's too late.

    2009 PT Cruiser, 2008 Eclipse, 1995 Mark VIII, 1988 GMC Van

  • fezofezo Posts: 9,328
    Exactly correct. I've seen a couple of folks get car repossessed and one whose house got foreclosed. in all cases if they'd been up front about the problem they'd have survived it. The ones with the foreclosure had a bankruptcy before that. Their credit score must be in negative numbers!

    A friend's daughter found out about how things work when they towed her Civic right out of her driveway in the middle of the night. She ended up getting it back but her mom had to work it out with her. If she'd told her mom in the first place it never would have gotten towed.

    Banks don't want houses and cars. They're not in that business and especially now are depreciating assets. Work things out.
  • bvdj84bvdj84 Posts: 1,721
    exactly, I do agree. Working with your lenders and being upfront is a better option. They will be less likely to cause you to lose things. Now, I am not sure if I told the lease company for my car, that they would work out anything for me if I needed help. The contract would be hard to work around. I would have to transfer the lease to someone else. I have seen that before. But, that could take a long time.
  • I might be unemployed by the end of March. This will be the third year in a row the company has done layoffs. I survived the first two rounds, but I could be on the chopping block this time.
    On the the point. I have an 18,000 balance on my loan, payments are 468 a month.
    I bought the car new, and am almost even with the private party value. (06 Subaru WRX)
    With no guarantee of walking into a job with the same pay, I would like to have a lower payment.
    Best idea I can think of would be to sell and buy a car around the 9-12k range.
    Am I thinking right, or should I be looking at another option?
  • euphoniumeuphonium Great Northwest, West of the Cascades.Posts: 3,320
    If you can negotiate or renegotiate your loan with your bank or credit union, do it.

    You keep your WRX, continue to make payments, and the credit union won't have another vehicle on their list to sell or auction.

    Talk to them now and see what they will do to help you. Good Luck. :)
  • qbrozenqbrozen Posts: 17,199
    sooo... what are you down to? 3 years remaining?

    refinance it now while you still have a job. It will extend the loan (let's say refi for 5 years), but if you still have a job, you can keep making larger payments and pay it off early.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • fezofezo Posts: 9,328
    I agree completely - refinance it if you can and stretch the payments. If things work out and you keep the job you can always pay the old loan amount and shorten the loan.

    Selling the car would probably cost you in the grand scheme of things plus you'd end up in a car you don't like as much.

    Best of luck.
  • ronvprronvpr Posts: 24
    I would sell that Subaru. You have enough to worry about let alone trying to keep one of those cars operational. My brother was a mechanic for a Subaru dealer in California. He said he would never buy one after all he has seen go wrong with them.
  • morin2morin2 Posts: 399
    Previous post a little harsh on Subarus and not very specific (ok to downgrade late 90's early 00's for headgaskets, but not the entire marque - we're not talking Yugos here...). I don't think the WRX is that problematic - it sounds like you are rationally examining the level of debt in your life and trying to find a solution. Unfortunately, the big depreciation hit means the buyer of your WRX will get a good deal. The lesson here is to pay cash. We have become a society than over-finances. If you do sell the WRX (and I'm not making that specific recommendation), you only come out ahead if you buy a replacement for cash. Buy something that has absorbed a massive depreciation hit and is easy to maintain yourself. I can't think of a job that requires a WRX commuter, unlike many sales jobs that require carrying clients, equipment, etc. Of course its fun, but with competition for few if any jobs, could count against you at some companies because you could be perceived as a risk-taker.
  • jocutojocuto Posts: 7
    1.5 Billion...

    In the latest economic recession I feel victim to a slow real estate market and corporate layoffs. For the last year I have struggled to make my car payment on time...but eventually Chrysler financial received the monies necessary to continue on with my car loan. At rate...of 13% interest.

    At the time of purchase, a special favor was called in to Chrysler Financial from the dealership in which I purchased the car. I had a low credit score and commission only job for a source of income. Since taking on the loan, again, I have made late payments, my credit score has improved over 100 points. Now in a time where most people including myself can no longer support themselves the same way they could a year ago I came to you for help. I did not give up, file for bankruptsy or ignore the calls and wait for the car to be reposessed. Instead I asked for an interest rate reduction, a refinance anything to help me keep the car and keep paying on it. Chrysler Financial was given 1.5 billion to help ease it's financial woes, but for their customer, they are willing to do nothing. My car was financed way above what should have been legal. I like many others drove off the dealership lot upside down in my car. In hopes that my real estate job would enable me to pay the car off early. After real estate tanked, I found another job. I was layed off 2 weeks before Christmas. I did not again give up, file for unemployment and sit around thinking about bankruptsy but instead diligently searched for another job that would hold up better in a shaky economy. I found it. In healthcare. A skilled nursing home specializing in Alzheimer's and Dimentia. Although my pay would be $15,000 less a year, it was a long term choice. In the mean time I have a car that I pay $570/mo for. No it's not a BMW. Rather a Mazda 6 with 99K miles on it. At 13% interest it's easy to see that even adding on a couple years to the loan as well as dropping the interest rate to even 9% would still be financially beneficial to Chrysler Financial and also enable me to keep the car. But as every customer service agent repeatedly explains to me...Chrysler Financial will not help. They suggest going to another financial institution to refinance. The problem is this...like an arm mortgage, my car CAN NOT be refinanced unless I have about $3,000 to put down. This is because the market value is MUCH less than what I owe on the vehicle. A common, old and much repeated story. If I had the $3,000 I would one, pay Chrysler or two refinance at a better rate.

    My question is this: Chrysler Financial received their bail out money. When your agents tell me over the phone, that I signed the contract and it is my responsibility I have to wonder where yours is? Will you continue to unethically lend money? When you do and your customers need help, will you turn your back and say sorry, we know we got you in to this, but we will do nothing for someone who is willing to work hard, answer our phone calls and try to do what's right?

    There is no question as to why your company needs bail out money. There is no question why a large percentage of your customers are looking for a bail out, or rather help.

    When people ask me who your car is financed through, what will be the future reputation spread from "word of mouth"?

    I am disheartened that someone could ok this loan (like so many mortgage brokers did) walk away and say sorry there is nothing we can do to help. Even the banks will help homeowners reduce their interest and give the people who are trying to do what's right the help they need and deserve. Just like Chrysler Financial needed in their time of need.

    Please only pass this email along to someone who cares.

    Cynthia Weber
    Account# 1013664533
  • tidestertidester Posts: 10,110
    Cynthia,

    I would hope that some of the bailout money would go to provide some help to people in financial duress. Unfortunately, that does not appear to be in the cards.

    By the way, the bailout for Chrysler Financial was only announced less than than two weeks ago and I don't believe they have actually received any of it yet. Technically, it is a loan and it does come with some strings attached. First, the money is intended to help make loans to new car buyers and, second, the cars that they sell to those customers will become the collateral for the government loan.

    I'm sorry to say that doesn't do any good for people already out on a financial limb. :(

    tidester, host
    SUVs and Smart Shopper
  • qbrozenqbrozen Posts: 17,199
    OK, here it is, plain and simple. Nobody owes you anything.

    we know we got you in to this

    HUH?? Did you not call the police when the rep from Chrysler was holding a gun to your head to make you sign the contract? Yes, that's sarcasm. I'm sorry for where you are financially, but you have nobody to blame but yourself.

    I am disheartened that someone could ok this loan

    YOU ok'd the loan! You ASKED for it! Face it, if you had been denied at the time, you would have come here screaming about how Chrysler financial is not sympathetic to the credit-challenged for NOT giving you the loan in the first place. Now they gave you what you wanted and you complain anyway.

    Again, yes, I feel bad for you. But blaming others is just not right and I find it deplorable.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • jocutojocuto Posts: 7
    Oh gbrozen,

    Two sentences picked out of a 2-page letter. If you read the whole entire letter I'm quite aware that Nobody owes me anything. The government doesn't OWE Chrysler Financial anything either do they????

    I was comparing a car deal with a housing deal. Sure, you can refinance in a year, just like all the ARM mortgages could in 7 right?. This is what your brokers and dealers tell you. Everything will be fine.
    So big guy, no one to blame but myself. Is that what you tell the auto workers who were layed off after 20-years of work too?? Is that what you tell people who tried to sell their homes (people who didn't buy into ARM mortgages) but only to realize the value had plummeted! Is that THEIR FAULT???

    Again my point....Chrysler needed to be bailed out because the economy took a turn for the worse...EXAMPLE: PEOPLE ARE LOSING THEIR JOBS, SOURCES OF INCOME and ABILITY TO PAY FOR WHAT THEY COULD A YEAR AGO.

    THIS IS NOT THEIR or MY FAULT rather a set of circumstances WE ARE ALL TRYING TO OVERCOME!!!!

    So the government gives the bail out of Chrysler, but Chrysler won't so much as ease up on an interest rate for their customers.

    That's my point...they still make money, I like Chrysler and millions of every day hard working people have been effected by layoffs economy this and that. So if someone says....hey you have to a filet tonight instead of filet and lobster to keep things going...you would think a filet would be ok. Everyone still survives.

    Ignorance is bliss isn't it?

    I really don't want your sympathy or anyone else's. I'm not BLAMING anyone, just pointing out the facts. Yes, I OK'd the loan. Many people ok'd buying a home and didn't expect the value of that home to plummet.

    And to respond to your..."what I would have done assumption". You are incorrect. I would have been forced to look and purchase elsewhere.

    It's a simple observation, one that continues to prove corporate greed, and then the public has to hear their crying and whinning to the government to help them on every major new outlet. But when it comes time to channel that into building back a successful business, clientel, and employment...they are on the same path that led them to their "bail out" woes.

    Just think about it, maybe not from the perfect lifestyle or past you may have had in your life..,but in general.

    Remember in the end....

    You and I are helping to pay for the "bail out".
  • qbrozenqbrozen Posts: 17,199
    Whoa whoa. How in the world is the bailout at all connected to your auto loan?? It is not. If you ask me about the bailout, NO, I don't think they should get anything. The same rules apply to them as to you. They made their bed and should deal with it. I don't believe the gov (ie, WE) owe them anything.

    And what does your auto loan have to do with the auto workers?? Again, NOTHING! There is absolutely no connection between your bad credit and their jobs. So, to answer your question, would I tell someone who was laid off it was their fault? No, of course not.

    HOWEVER, would I tell someone with a mortgage they can't handle the same thing? YUP!

    I really don't want your sympathy or anyone else's. I'm not BLAMING anyone, just pointing out the facts. Yes, I OK'd the loan. Many people ok'd buying a home and didn't expect the value of that home to plummet.

    Huh. Ok, I apologize if I've misinterpreted your statements, but could you then explain what it is you meant when you wrote things like they "unethically" lent you money? or they "got you into this"? And, finally, what you meant when you implied that you would badmouth Chrysler financial?

    By the way, 13% is not bad for someone with poor credit. Just take a look at the standard rates allowed on credit cards (18%-21%), and those rates apply to folks with outstanding credit, too.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • jocutojocuto Posts: 7
    Actually, I didn't ask YOU about anything. Simply stating a point.
    It's ALL related, it is ALL intertwined you should realize that much. It ALL pertains to our economy and the way business is conducted. I also love your assumption about bad credit. If you read my email, I said I DID have bad credit when I purchased the car. The credit is good now, but refinancing will not happen because the loan is set so far above market value no other institution will refinance that much for the car. So be careful before you rant about what you THINK and don't KNOW.
    I think it was unethical to ok a loan that should not, by company standards, be approved in the first place, I think it was unethical for mortgage company's to introduce the ARM.
    I'm entitled to those opinions.
    13% is a good percentage rate? For an auto loan? You are comparing and auto loan with a credit card loan??

    I wouldn't know, I don't have any credit cards.
    I have nothing good to say about Chysler Financial, my right, my experience, my choice.
  • qbrozenqbrozen Posts: 17,199
    My "assumption" about bad credit was correct (although not an assumption when you stated it). I didn't say you still have it. But you had it when you got the loan in question. Its great you've been able to improve it. And that was done with the help of your auto loan.

    I'm curious about one more thing, though. What company standards state the loan shouldn't have been approved?

    And, yes, 13% is not all that bad for an auto loan for someone with questionable credit. My brother was staring down the barrel of 16% with a 650 credit score last month, and the dealer was having difficulty getting THAT past the bank.

    Yup. Your opinion and your right. No doubt. But when you state your opinion on the internet, I have every right to respond. And I'm sure you didn't think you could go on a public forum, state you've had a bad experience with a financial company because they lent you money when you asked and now won't give you a break, and not get some sort of backlash. I'm more than happy to discuss such issues. But we should try to not let it get so personal.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • euphoniumeuphonium Great Northwest, West of the Cascades.Posts: 3,320
    and I agree with his observations, opinions, and very wise experience.

    Regarding your car loan: You read the terms and conditions
    You understood those terms and conditions
    You agreed to those terms and conditions
    You are obligated to those terms and conditions

    Just like in the R E business when a buyer signs the Earnest Money Receipt and Agreement.
  • jocutojocuto Posts: 7
    I wish you all the best of luck
    and should the "terms and conditions" of your own contracts/financial obligations/homes or health be effected by the economy or otherwise.
    Don't complain, don't question, don't try, don't challenge,...remember what you've told me here.

    Nothing should be personal you are right. But be careful about personal judgements with so little knowledge.

    Life doesn't always go as planned.
    Just pointing out the hypocritical thinking process of our decision makers both in large corporations and in goverment.

    I still hold a real estate license, I know the "terms and conditions" of an 8 page contract that I explicity and thoroughly explain to each and every client until they fully understand. Do you honestly believe that both mortgage brokers and car dealers are doing the same? Do you think we (our economy) would be here now if that was the case?

    Very wise experience?

    Please explain in full detail how one obtains this and how you have chosen such a title?

    I do not know how wise, educated or intellectual either of you are, but we have a serious problem in the US right now. I am challenging the system. I posted my letter to Chrysler Financial, ...I made my opinion, thoughts and point. You have made yours. I don't have time to post in forums all day, but I really do wish you both the best.
  • verdugoverdugo Posts: 1,989
    jocuto,

    IMHO, you have some pent up anger. Need to take a deep breath and relax.

    Best of luck to you.

    A.
  • euphoniumeuphonium Great Northwest, West of the Cascades.Posts: 3,320
    As you still hold a RE license, you are subject to Continuing Education courses.

    Be sure to attend the one on "Contract Law".

    I've entered into a lot of agreements over the years and am most proud of my Marriage Contract which has lasted over 54 years. Even the RE business didn't threaten it. ;)
  • jocutojocuto Posts: 7
    I just finished my CE courses a few months ago. I did attend and pass the class on contract law. Congratulations on 54 years. I was not married when I practiced RE full-time so I'm not sure how RE affects a relationship. I know it is very demanding and kudos to you for sticking together and keeping a marriage for so many years. That is something to be VERY proud of, practicing RE or not.
    I am extremely impressed and wish you many more!! My granparents just celebrated their 63rd wedding anniversary.
  • jocutojocuto Posts: 7
    Are you serious? Is that all you can come up with?? In response to issues we are debating???? I'm still laughing that you can't give me a description of how one obtains wise experience. You agreed so you must know the facts right? My co-workers are laughing their [non-permissible content removed] off. Pent up and anger are not accurate assumptions of who I am. But I guess that's all someone can do in a forum is guess and assume if they don't know and don't ask.

    Let's do something more contructive with our time.

    I have a college degree, two minors, a RE license, a license to work with the elderly, a masters degree on it's way, I've lived in 10 different states traveled to 20 or more and raised three children. I didn't do it responding to judgements online. So AGAIN...take care. Peace, happiness, and good luck to all of you and I hope you will not see adversity the way others have in this economy.
  • qbrozenqbrozen Posts: 17,199
    Thank you for your well wishes. I appreciate it. I too hope I don't have to face financial adversity.

    If I do, however, I would only blame myself for my financial situation. I chose to have the mortgage payment and 2 car payments I currently have. I chose not to save as much as I should have. I'll be saying to myself that I should have gotten cheaper vehicles, a cheaper home, cheaper coffee, etc, etc. Nobody forced me into it and I don't expect help from, nor will I disparage, the financial institutions that loaned me the money I asked for.

    In this country we tend to live to excess, unfortunately, and expect handouts when we can no longer do so. Maybe if we had been more prudent, collectively, we wouldn't be facing this situation.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • jocutojocuto Posts: 7
    I DO agree with you on that. We live in exess when things are good and freak out when they are bad and we can't sustain. I learned that lesson in my early 20's. Aside from a car loan and student loans, I don't have any other debt. I should have purchased a cheaper car. My reasoning at the time was to have a reliable one in real estate and the salesman did his job well! lol, but I COULD have chose another profession. Which eventually I did. After being layedoff from that position I quickly and eagerly re-thought a long term choice in careers. I took a pay cut for long term stability, and will probably pick up a 3rd job to catch up with the car loan. My beef was simply pointing out the fact that in this country we seem to reward the irresponsible and penalize the people who are trying to improve themselves through hard work. I do not want to have my car re-possesed, file for bankruptcy, or take th easy way out. I just wanted a break on my interested rate because after paying on my car for 2 years and increasing my credit score I thought it was a reasonable thing to ask from an institution that just got bailed out and received 1.5 BIllion. My point was, they got their help, now they should help their customers. They obviously screwed up somewhere, and perhaps I did by signing those papers. The goverment is only adding to a circle of problems and although I don't believe in too much regulation, there should be some. My point was that Chrysler would still make money off my loan, and over a longer period. I could keep my car, and there would be no loss to anyone. I had a 94 year old grandmother that lived simply. (she went through the depression) She taught me many things about conserving, the basic neccesities. I don't soley blame myself for the financial situation that I am in. I made great money in RE because I worked so hard, earned customer loyalty and did my job well. It was not my fault the market tanked. It was not my fault that the company I worked for after that folded. However you pick up the peices and keep going. I have always been a fighter, a worker and a good person. I know that doesn't earn free credit, but the point I was making was directed at a pretty simple request, denied from an institution that just received help when they needed from our government. I guess I could go get knocked up, then get wel-fare, medicaid, and free food.....lol...
    Maybe I didn't correlate my thoughts well.

    It's a frustrating time, and I am not happy with Chrysler, but I don't expect everyone else to feel the same.

    Take care
  • qbrozenqbrozen Posts: 17,199
    That made alot more sense to me, jocuto, and I agree with you on many points.

    I do hope things look up for you soon. Sounds like you have made a good long-term career move and you'll make it through.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • verdugoverdugo Posts: 1,989
    I do hope things look up for you soon. Sounds like you have made a good long-term career move and you'll make it through.

    +1

    Do stick around, we're not a bad bunch of people. :)
  • euphoniumeuphonium Great Northwest, West of the Cascades.Posts: 3,320
    It's my nature to ask, "When your broker went out of business, why didn't you start you own RE agency? I'm now confident you would have passed the Brokers exam.

    The exciting world of commission only, beats the cocoon of a steady salary. ;)
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