Did you recently take on (or consider) a loan of 84 months or longer on a car purchase?
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A reporter would like to speak with you about your experience; please reach out to PR@Edmunds.com by 7/22 for details.
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Plus, I told my wife when I leased the Fusion that when the lease is up...the Sienna will be paid-off...so then, we'd only have ONE car payment half of what we're paying for the van.
Thanks again!
Did you mean Chronic Buyers Anonymous?
Thanks!
It's not a wash; at the end of 3 years, you'll either own a minivan or you'll have nothing.
16% is outrageous; find a credit union, you should be able to get a 3 year loan on that Sienna and reduce your payments quite a bit.
Most times YES!! Right now you have 3 years left on a Toyota (more reliable than a trailblazer I'm sure) and at the end of those 3 years you will own it free and clear. A 3 year lease on a Trailblazer is just that, a lease, you own nothing at the end of those 3 years. Not to mention if your circumstances change and you are suddenly driving more miles then you have mileage fees at the end of the lease. I know the "oh I have another car so I can keep the miles off" speech, however, take my situation for example:
I currenly am 18 months into a 48 month/48,000 mile lease on a 2004 Nissan Titan, the truck has 52,650 miles on it as of today. We have 3 vehicles and at first I wasn't driving it that much, then some things changed and suddenly in 4 months it got 20k put on it. Now I've got 2 choices, either trade it in with serious $$$ down or ride out the lease until the end. If I ride out the lease then I'm on the hook for either the $15k buyout or roughly $13k in mileage penalties, either way I've got to pay the piper. For some people leasing is great, for me it wasn't.
That said I would stay with the Toyota if I were you, you only have 3 years left then you can be payment free!
Will you consider the momentary satisfaction that came from scratching your new car itch now, to have been worthwhile in 39 months time?
Probably. No matter what, in 39 months (or less) you either have a paid off vehicle worth several grand or nothing. You may also spend signficant $$ on repairs for the leased vehicle during the 3 months it's out of warranty (you said 39 month lease correct?). And GM is very bad (at least lately) at charging for excess wear and tear on lease termination.
I did some research on a re-finance of my current auto loan on the Sienna which is 16% APR. For a 39 month loan from the bank, my monthly payments would fall from 520.00 to 465.00 at an APR of 7.74%. However, I don't believe there is a bank out there that would loan me 16,000.00 for a car that is only worth 7,000.00...is there? If so, this would be the right move...but my friend who is the CFO of a local graduate school feels that this would be difficult to achieve.
ALso...if we're set on unloading the Sienna at the end of the term (not saying we will...we may keep it and pocket the payments)...is it still better to keep it...and is it better because it will still have "some" value in a trade?
THANK YOU!
Start calling around to find out. The worst a bank/credit union can tell you is "no".
Once you get to that figure, would it be possible to float the balance (the negative equity) on your home line of credit or a low rate credit card? I get checks every couple days from the cc companies wanting me to use them for 2.9% until paid off. Look for the ones that don't charge a "fee" to use the checks. As long as you make the same payment for two loans that you would for one, you'll be in good shape.
I guess the old adage "A fool and his money are soon parted." still applies...
Some people simply don't know how to handle money, and I think it is sad that lending institutions take advantage of these people by lending them too much money at a high interest rate.
IIRC, some of the financing contracts place a lien not only on the home, but the land it is placed on, so a homeowner who defaults ends up worse off than they were before they bought the home, because they end up losing the land they had before.
So, in July of 2004 we bought a house, so we needed the Daewoo to last another year, but after the last problem with the car that happened in early 05 that involved some type of gasket, we decided it was time to give up on the car, sell it to Carmax, we got $350 for it and it felt good to get that much!
So, in January 05 we decided to buy a 2001 Chrysler Sebring LXi, it drove fine, my wife really wanted the car. They sold it to us for $9400 plus a really expensive warranty that was at least $2000, we put down 500, payments are 60 months, $255. No major problems, until I read on this website about the possible sludge problem with this car. I have been giving this car oil changes at 3000 miles, the oil is clear. A week ago, the oil pressure light comes on. I take it to a mechanic, and the possibility exists that the problem will be the oil pump. I will find out tomorrow. (the mechanic messed around trying to borrow a tool to use to perform the oil pressure test) A new oil pump $600-700, no problem, but according to the "experts", that probably won't solve the overall problem.
This engine may have "hot spots" that cause the oil to "sludge" and if this is happening, then it's just a matter of time before the engine is dead. So right now, I'm probably upside down $5400.
I think I have four options:
1. Drive the car into the ground, at which time it will be worth $200 to a salvage yard. There is no way of knowing how far upside down I might be in that situation.
2. Trade the car in for a lease. (I contacted a leasing company about possibly leasing a used vehicle, hoping that would lower the payments) This would result in not owning a vehicle in 3-4 years but would give me a fresh start.
3. Trade the car to buy a used car. This would result in higher payments and almost certainly a 60 month loan, but I would own a 7-9 year old car outright at the end.
4. Hope I get into a wreck at some point.
Just for clarification, has that warranty now expired?
That's only 18 months. Pretty short time for a $2000 warranty.
I think you should keep the Sebring until it needs a repair that costs more than the car is worth.
I don't understand either, how can that expensive warranty have expired so quickly?
I still don't know for sure about the oil pressure. We live in an extremely fast growing town about 35 miles north of Dallas, and these mechanics have got it made! They don't have to look at a car in one day, they can put you off. I've been to two different ones and getting this "manual oil pressure test" is not a priority for them, and to be honest, it's not for me either, because I fear the result. The bigger question is Is this a sludge car? At least two different mechanics have looked at the oil itself and said the oil looks great.
I am hoping like crazy the sensor is wrong, but I am trying to prepare for the worst. IF the mechanic says I can get one more year out of this car, I would be in a much better position, because by then most of my old credit card debt will be paid off. I am planning to be debt free on December 31, 2007. My point in sharing this is to both compliment Edmunds and try to get another point of view.
thanks
I say this because I gather from your prior post that you are servicing an interest rate of 14.24%. That's obviously quite high.
Before doing this, I'd make sure that the loan isn't structured in such a way that you'd have to pay all of the interest in the event of an early pay off. While I normally don't like people touching their home equity to pay off bills (it puts a lot of your credit eggs into one important basket), this could be worth investigating.
I hope that others learn from your experience, and avoid these sorts of deals for themselves. Good luck to you.
For what it's worth, it's far more likely to be an oil pressure switch than it is to be the oil pump. Autozone lists a new switch for $12 and a six pack will probably get the guy behind the counter to install it in his lunch break (it's a simple job).
....this "manual oil pressure test" is not a priority for them, and to be honest, it's not for me either, because I fear the result....
Look at it this way, if the oil pressure had dropped a few days ago to the point where the light comes on, and you've been driving it since then, your engine would already be toast.
I think you worry too much. Drive it, keep it well maintained, pay it off, and next time put the cost of a warranty into a CD and use it for repairs if you need them.
You do change your oil in a timely fashion....right?
That's a fair point. Frequent oil changes will generally be sufficient to prevent sludge.
Okay, I checked just now, the warranty did expire after 24,000 miles. Also, I did have one mechanic look at the car about two days after it first happened, and after he looked he said "oil switch is leaking", and replaced the switch. Cheap $61, I'm rolling out of there thinking I won the lottery.
Before he replaced the switch the oil light would come on sporadically. Now, after the engine gets hot, it comes on at every stop. The light quickly goes away as soon as the car starts moving again. I returned it to him immediately he said he's positive it was leaking. So now here we go with the oil pressure test.
I've gone through dozens of car dealers to have it traded in. I dont have down payment money coz I cant even save up after all my bills are paid. Lets just say, I'm left with .3 cents after everythings paid off. :-( I dont know what to do anymore. I cant refinance, I cant save up, I already have 2 jobs, also goin to school full time. What I really want is the Honda Hybrid or any car that is more fuel efficient... what should I do???
'11 GMC Sierra 1500; '98 Alfa 156 2.0TS; '08 Maser QP; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '11 Mini Cooper S
Then get your debts paid off and make better decisions in the future.
We don't know for sure, of course, but I'm guessing that she is probably upside down by several thousand dollars. (Assuming a high interest rate and a five-year loan, leading to a high purchase price, I guesstimated negative equity of at least a few grand.) Without any spare cash in the bank, this could be one of those damned-if-you-do, damned-if-you-don't situations...
1) If you have driven this vehicle many miles at all with the light on, if there truly was an oil pressure problem you would be HEARING the problem by now. Lifters would be rapping and then main bearings knocking - from oil starvation. (Meaning, a severely ruined motor.) Therefore, you PROBABLY do not have a pressure problem, only have a light problem.
2) Ah, so you now tell us a more info about the problem. You've had a 'leaking' oil pressure switch replaced already. Then you got the oil light coming on.
My guesses from a distance:
-The new oil pressure switch is bad or has incorrect calibration, or
-The wire that is supposed to be connected to the switch is not connected, has a broken wire, etc.
-The mechanic that did this is now wanting to make more money from someone that seems to not have much mechanical ability by doing more 'testing' (manual oil pressure test), which I bet he will charge you for.
I think you should accept the $61 you paid for the switch replacement as 'lost money' and try to find another mechanic. One that would first check the switch to see if the wire is connected properly, and if it is then replace the switch again. I might suggest using a Chrysler (you are talking about a Chrysler product, right?) switch, not an after market one. An after market switch might not have the correct 'calibration' or voltage response as a 'factory' switch. I've heard of this happening on such things as oil pressure switches and temperature sending switches.
If a different mechanic fixes this with a new switch, I would ask for my money back from the first mechanic. If he refuses, this seems like a good case for small claims court. A decent mechanic would be looking for a loose wire and then replacing the switch again if a switch he replaced is turning the oil pressure light on.
I suspect a bad sending unit was installed. This happens.
Miss explains her difficult situation and then ends it with "What I really want".
To me that sounds like a person who is more concerned with what they want instead of what they can afford. That can lead to trouble or it can drive a person to be super-successful.
And no I don't work for Cadillac or GM or any of its suppliers. :P
I work for a large government firm!
So, we're not hearing anything, the light has stopped coming on, so at this point we agree that we have a faulty light, OR
try this theory:
About a year ago I had the transmission power flushed and drove the car about 15 miles, remembered I needed to have the car inspected, and went to an inspection place. The mechanic couldn't pass my car because he said the car had not been driven far enough to "reset the codes". (the transmission shop had checked all of the codes). He said I needed to drive the car at least 30 more miles so he could check the codes. I drove around, came back, he checked the codes, the car passed.
So, this is what I think. Since the light was already coming on PART of the time before the new oil switch was installed, I think the car needed to be driven a certain amount of miles for the code to reset so the light could read correctly. Thoughts?
Thanks
An oil pressure light gives instanteous readout of the oil pressure it is seeing. Unless it is faulty, has a loose connection, or wiring problems - all things we have already told you about.
Is that enough of a reason to get rid of a car?
It is kind of sad to buy a car in Dec 05 and want to get rid of it in July 06.
Why did you buy the Envoy in the first place?
Many people buy on the basis of cash flow. Some cut it more closely than others.
tidester, host
Here's the problem .... $400 per month on gas is not enough to counteract the punishment you will take on the trade-in value.
I'm going to assume you get somewhere around 18 mpg in your Envoy. Let's say you trade that in on one of the new subcompacts at about a $15k purchase price. Best case scenario, you increase to 36 mpg. That is double you mileage and hence half your gas bill. So you save $200 in gas. WELL, a $15k car, plus $7k in negative equity, still gets you a car payment around $450 per month. So now you are out $650 per month for payment and gas on a subcompact. I would say, realistically, if you want some options and if you don't always get the optimal gas mileage, you are probably closer to $750 in this scenario.
so you tell me, is it worth it?
Even if you answer yes, I'm fairly confident that you cannot finance $22k on a $15k car.
If you want a hybrid? Well, now you're talking about $20k plus $7 negative equity. OK, maybe now you'll get 45 mpg and reduce your gas consumption to $160. BUT your payment just shot up to about $550/month!
'11 GMC Sierra 1500; '98 Alfa 156 2.0TS; '08 Maser QP; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '11 Mini Cooper S
1. Keep the car and buy it at the end of the lease. The buyout is 18,000. At that point the car will probably have about 90,000 miles on it and I will need to put in a couple grand to replace tires, brakes and all of those wearable parts The interest rates on used car loans are always higher as well.
2. Keep the car buy it for 18,000 fix it and try to sell it ( total of 20,000-21000 total expense. According to blue book with the amount of miles I have on the car I'm looking at being able to sell it for between 14000 and 15000 so that would be a loss of 5,000-6,000
3. Buy a Honda Accord for 16,800 (almost 1000 below invoice yay!) and roll in remaining payments and overage of miles which is about 7000. To do this I would have 2 separate loans through my credit union. One to finance the car with a 6.0 interest rate (about 21,000) the other to finance the negative equity with a 13% interest rate (about 4,000) I hope to pay off the negative equity loan very quickly.
I have looked at the numbers so many times my head is spinning to me it looks like a wash no matter which way I look at it. I can't stomach the thought of getting a 20,000 loan in the spring for a car that has 90,000 miles on it but ....... it also sucks spending alot of money for an accord too due to rolling in negative equity. I am BUYING my next car so I don't have this overage mile problem again.
I did ask about forgiving payments or miles and they said that basically Honda does not ever do that.....
I would love any thoughts or insightful advice