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Bankruptcy and Vehicle Financing
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Comments
On the other hand, if you do not have the car, the FI guy might work harder for you, and if things do not work out on you r terms, it is easier to walk from the deal.
One thing to avoid is any dealership that (givin your credit) will let you leave with the car. This was a discussion on another forum about this practice. I think it was inconsiderate salesmen...
There are some F & I people that post in here that could give you an assessment of your situation.
Again, the best thing to do is not to take the car untill financing is approved.
Go get a Kia, Mazda. Topic closed.
stinky - yeah, we get those ads here and the "anyone with $19 down and $199 a month can get into a car!" These are of course scraemer ads and not to be believed under ANY circumstances.
20% is a bundle particularly in today's market but that may be reality - and that advice of not taking posession of the car until the financing has been approved is an absolute must.
There are so many ways they can take you off your price and financing on a new car. In my observation there are fewer on used cars in that the options are either there or not. You aren't looking at "we have close to what you are looking for but withthe XYZ package - it's only $20 more a month."
And so it begins.....
I don't think a credit union will approve you, at least I've never heard of one. I'm sure you'll let us know.
You're special finance material for sure. Americredit, Capitol One, Triad.... and that means 20 percent or more.
No disrespect but shouldn't you have the ability to save up more than 2000 now that you're debt free?
If you can not wait....well....
This is a time for you to be real conservative.
With people who have BK's or repo's I doubt any dealer would spot a car.
There are to many hoops to jump through to get a person like Mazda done.
I personally never spot deliver a car to a sub-prime customer.
Harry
A spot delivery is the acceptance of a vehicle when the contract is not fully completed. "Spot" deliveries are often made before a credit application has been processed, and after banks have closed for the day, or on weekends and holidays. Many dealerships will take a consumer through the purchasing process, including the consumer signing the installment sales contract. However, until that contract is signed by the dealership or an authorized agent, the contract is only binding on the consumer. If, under these circumstances, the consumer drives off the lot, and the dealer is unable to find a lender to purchase the contract, the dealer could require the return of the vehicle and charge the consumer for any mileage or damage done.
Finally, consumers should never sign a blank installment contract or any contract that has not been filled out in its entirety. Regardless of what a dealership may say, or any verbal agreement a buyer has with a sales person, the information on the contract becomes the binding terms of the agreement. As always, consumers should read and understand everything they sign.
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How can I insure 100% that the loan has actually been approved prior to taking possession of the car?
It will detail out all the conditions of the sale.
In your case you will need to bring a full copy of a Phone bill,Pay-check stubs,6-10 personal references with names,phone #',and addresses.
Proof of insurance,copy of drivers license and in some cases at least 3 payments up-front.
I've gotten well over 100,000 miles on Hondas and Nissans that someone else put the first 30 or 40 thou.
I recently filed CH7 Bk. I lost my job, and was not able to find a comparable salary for almost 6 months. I did however work 2 full time jobs to pay rent/food etc for my family. (very low paying jobs)
My creditors were not willing to work with me, and after 5 months, I was in too deep to recover. I had a 20k suburban repossessed, and after they auctioned it for 10k, they billed me for the remaining 10k. I felt really bad about filing, but I am not about to pay 10k for something I no longer possess. I paid cash for a 92 civic, and have been driving it for almost a year now. It looks like hell and it just turned 205,000 miles. My Bk is almost discharged, and I'm looking into getting a more reliable vehicle. Not a new one, but something around 10-12k. I have a family, and need something that won't blow up like this Honda is about to do.
My Question is simply What interest rates should I expect to see after a chapter 7? Please hold the morality comments, as I've read them already.
Thanks in advance
Car_man
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Do you belong to a credit union ? Do you have a bank that you have used for along time.
These two places may get you a cheaper rate than a national finance company.
Rates will vary between 17-24 % with them.
Best way to get a low rate is to put 3-4000 dollars down,look at a 15000 dollar car, and get a co-signer.
If this is, indeed the case it will cost a hell of a lot more than 600.00 to replace the engine.
A head gasket? Perhaps but the 3.0 engines didn't have that problem like the 3.8's did.
Kinda sounds like justification to just forget sensible used cars and just buy new?
I know I would get a second opinion.
hondapro...don't be afraid to post. You have taken a sensible approach.
Do not expect a prime interest rate until you have some time behind you. Still, shop around. You might do better than you think.
Good Luck!
Ford has lots of different 3.0s. Harder to tell on that. I'm willing to call the Sable dead for the sake of discussion. I'm still on the used Toyota or Honda side but keep us posted.
hondaro - stay in! Would like to hear how you do as well. Maybe compare notes. Depending on what state you are in you can get a copy of your credt report free which will tell you what to expect if you run the magic number by some of the pros in here. I'm not one of them. If you aren't in one of those states you can still do it cheaply.
Was the 3.0 back then an iron block with aluminum heads?
A good amount down and a relatively low loan amount ought to get you done, but be prepared for a high rate.
I live in Arizona. I looked at some cars last night in the $10,500-11,500 range, and was quoted
"with my trade(which isn't worth much) +1000 down on a 10,500 car my payments would be $350." That was with a 21% rate. That didn't add up to me.
I understand I'll pay dearly for my mistakes but I know I can do better than that. On an $11,000 loan at 20% my payment should be around 290-300 a month. I'm wondering where that extra $50 was coming from? (This is all figured on a 60 month term) I want to rebuild my credit and do better this time around, but I don't want to become vulture bait. I appreciate all the comments, and I'll keep posting as I get information. I'll be back at it tonight.
Ps hondapro refers to my ex-motorcycle racing career, not honda cars. I'm not very car smart yet.
You are looking at the right price range.
Keep in mind that you don't have to pay the loann out for a full 60 months either.
After about 16 months of good pay history you should be able to get it refinanced.
As a bk survivor (1989), my credit's now about 700 Beacon, and I bought a new Corolla CE 5 speed for $13,996 with a free set of all weather Toyota mats thrown in.
If you are willing to be a bit patient, your Toyota dealer can get you a base Corolla CE w/o the options and dealer/distributor packs.
Gets 35 mpg city and a wonderful car all around.
Watch out for the Saturn L100/L200. Just traded one with 21K because of numerous uncorrectible design flaws. Mainly cosmetic, but a real annoyance in this line is a recurring vibration in the steering wheel at 65-75 mph. Had all service bulletins done, but trouble returned.
In fact, the 2000 Saturn "L" is on the Consumer Reports used cars to avoid list. This pains me since I've owned 5 Saturns and still own an SL1 model in addition to the Corolla.
Toyota's done a great job in 03 on the Corolla, and it can be had at a very fair price if you leave out the extras. A/C and CD come included in the basic price.
Hope things work out as well for you as they have for me.
Only debt is a car loan. All credit card bills paid in full monthly.
Good luck to you.
You seem to be doing the right thing.
"I want to rebuild my credit and do better this time around, but I don't want to become vulture bait."
Well put. The vultures are out there and with what you went through they smell fresh blood. Don't give it to them!
There are good folk out there to deal with. It's worth the time to find them. Financing outside - bank, credit union, whatevr - might not be a bad thought.
I hadn't even thought of the refinancing partway through as your picture improves! Nice idea.
Well, maybe 6 months into it he refinanced. I think he got down to 9.9%. Nice thing about it too, was that the length of the loan didn't start over. Since he'd already paid on 6 months,the loan turned into a 48 month loan @ 9.9%, instead of bumping back out to 54 months and taking longer to pay off.
Your best bet right now is a used car, & not a "new" (1 or 2 years old) used car but an "old" (say, 8 or 10 years old) used car. I'd suggest that you spend a maximum of $5,000 on a top-tier (Honda or Toyota) Japanese sedan. In my part of the world - metro NY - this will get you a '93 Accord or Camry with about 100K on the clock. Pay a good mechanic to carefully examine the car before you finalize the purchase. This will greatly reduce the likelihood of unpleasant, expensive, surprises.
You're so focused on avoiding any repairs at all that you're overlooking an obvious fact of car ownership: new car depreciation will always cost you more than used car repairs. Suppose you buy a new car for, say, $17,000. As soon as you roll out of the dealer's lot, the car's value drops by about 25%. You've just lost over $4,000, & you haven't filled the tank yet. Now suppose that I buy a '93 Accord for $5,000. My depreciation cost for the 1st year of ownership will be only 10% of a much lower number, or $500. (Depreciation losses are steepest during the 1st 4 years of a car's life. After that, depreciation levels off. That's why a 1-year-old used car usually isn't a bargain.) Even if I have to fork over another $1,500 to cover repairs, I'm only out of pocket $2,000 at the end of the 1st year. I'm way ahead of you, & that's before I count the money that I save on insurance & loan interest.
Based on personal experience with a late 80s Accord that I kept for 12 years, I'd suggest that you figure on $800 to $1,000 per year for maintenance & repairs. And don't worry about being stranded. Unless you've grossly neglected the basics, it won't happen with a Toyota or Honda product.
Some folks with financial problems will defend the decision to buy new by saying that they'll recover the higher purchase cost by keeping the car "forever". (I know because I've said this.) That sounds good until you realize that you're spending a lot of money today & hoping that you'll get some of this back 5 or more years from now. A dollar in your pocket today is worth much more than 2 or 3 dollars that might be in your pocket years from now. Don't focus on how long you can keep the car. The important number is how much you have to spend each month on transportation. Once you understand this, you can see that the best way to drive this number down is to start with a cheap, old car.
One more thing. It's easier, both financially & psychologically, to upgrade than it is to downgrade. You can always trade in your '92 Camry if you land a much better job or if Uncle Oscar croaks & leaves you a bundle. It's a lot tougher to get rid of your '03 whatever if something goes sour & you find that you just can't make the monthly nut.
Go old & cheap.
2001 intrigue=$200.00/month
2001 mustang= $280.00 month
Add in a 300/month payment=$580 per month for a $12,000 vehicle. Umm... no.
I'll be searching for an early 90's import with 6 digit mileage, and will be driving it for at least a year before I think about getting into anything else.
Thanks all for the advice, and support.
Actually I've had a whole string of such things - cheap, used Hondas and Nissans. Toyotas are fine in that respect, too. I have bought 4 new cars and only hit .500 with them - two dogs and the two gems I have now. I was kind offorced by odd circumstances into new on the current ones - the one is an Odyssey and the used ones cost as much as the new ones. In a year I've lost no value at all. The other is an 00 Accord. I just REALLY wanted a stick and had to dump the infamous Windstall in a hurry as it was repairing me to death (a PERFECTLY maintained vehicle that had been bought new; my other new lemon was a VW Rabbit). So I bit the bullet.
One more quick tale. The convertible, which I only had for three summers due to expanding family (my dad actually bought it), is a Chrysler Sebring bought used. I was VERY wary - what having "used" and "Chrysler" in the same sentence and bought an extended warranty. It took no repairs in the time I owned it and dad had to buy a battery.
To each his own...
In constrast, my '00 Intrepid, the only car I've ever bought new, has cost me about $460 a month so far, + fuel & insurance. That's counting the $2000 downpayment I've made, all the monthly payments, a new set of tires, 2 sets of brakes up front, 1 set in the rear, 2 tranny services (just maintenance, the tranny is fine!), oil changes, a few air filters, pcv valves, a $250 deductible on my insurance to fix damage from a break-in, a Viper alarm/remote entry, one 4-wheel alignment, a couple tire patches, one set of spark plugs, and a thermostat housing. I'm not even factoring in depreciation here...I figure I'll worry about that when I sell it. But if I were to sell or trade now, I'm sure I'd be upside down by several thousand $. Of course, you won't have a depreciation problem that bad with a Corolla, and since a Corolla's a cheaper car to begin with, your monthly outlay may not be quite as bad as mine. Still, sometimes I just wish I'd bought another beater instead of a new car!
How many miles a year do you drive, Mazda? Keep in mind that if you buy a new car, it isn't going to stay new for long. Keep in mind normal wear-and-tear items like brakes, tires, hoses, belts, etc, that are going to go bad on any car no matter what the age. Then, just because it's a new car, that doesn't mean it's not going to break. Even if it's a Corolla or Civic or other car known for stellar reliablity. They still break from time to time. Sure, it'll most likely be under warranty, but you'll still be missing work because you have no car. Sure, your chances will be better with a new car, but it's no ironclad guarantee.
On a brighter note, my roommate's mother has a '92 or so Sable sedan, and that sucker must have about 180,000 miles on it by now! She does a lot of travelling, so a good portion of that is highway miles. So they're not all total pieces! There, I said something nice (kind of) about a Ford product ;-)
If you have gotten declined for a CC or loan, you can also get a free copy of your credit report as part of the fair credit reporting act... i think... you contact the company and jump through a few hoops and they send you a copy so you can verify the information...
Any Toyota will indeed be a bunch slower to depreciate than your Intrepid. Those things are just beasts on depreciation!
mazda - I'll goove you this. You've stayed on plan and seem to be being as smart as yo can while sticking with a new car plan. Good call on the Rio. Stay away! Kias are also depreciation beasts.
Good luck, friend. You've got the right idea.
mazdaprofour -
Can't blame you for wanting a new car. Just be sure that you understand (& can live with) the math before you pull the trigger. New car depreciation will take more money out of your pocket than used car repairs. While buying new means not having to pay for repairs (apart from those related to wear & tear) as long as the warranty is in effect, buying used is still cheaper. That's a basic fact of car ownership. In effect, when you buy new, you're shelling out $1.50 (or more) in depreciation to avoid paying a mechanic $1.00. That's just how it works.
Understand also that I'm not suggesting that you pick up another early 90s Sable. Instead, I'm pushing 1 of the historically reliable Japanese brands. Big difference there.
Whatever you do, spend some time crunching the numbers before you go ahead & do it.
Good luck.