Questions About Financing New Vehicles

hoju1301 · September 2005

Hello all,

This will be my first time financing a car.

Would getting financing for the first time be hard based on the following:

I am 22 and have two jobs making about 1800 a month. I do not have any other expenses for the month other than a cell phone bill.
I have had a credit history since i was 18, having 23.5k of total credit avaiable from 5 credit cards.
Currently have zero balances on the cards as of now, but had a balance of 8k 8months ago (paid off).
I have no other credit acounts (i.e mortgage/car).
No negative hits on my credit record like collections or late payments.
My fico score is 750 at the moment.

I will be downing 20k on the car and taking a loan of about 10-20k.

Would it help if my girfriend cosigns with me to combine her income? However, she only has a credit history of 2 years, with about 2k total credit avaiable with no balances on it. She makes roughly the same amount I do.

Any feedback or help would be greatly appreciated!
Thanks!

danf1 · September 2005

If you are putting that much money down, I can't see you having any problem getting a car loan.

no0b · September 2005

Agreed.

With that amount down, plus your credit history and FICO.. you'll have no problem.

sandman46 · September 2005

Why can't you try to eliminate some of those credit cards and get 1 of them to just give you a higher line of credit available. It's obvious that you know how to pay your debt down in a quick manner and you have a verified $1800./month income. I'd ry to get this done and also put down as much as you can comfortably afford. An extra payment 2 or 3 times a year won't hurt either.

The Sandman

ifyoubuildit · September 2005

When appying for credit, what impact do collection have on the way ceditors look at you? (aside from the hit your score takes)

danf1 · September 2005

That depends. Are we talking about a $5 medical collection or a $5,000 credit card company? Either way it is negative, just different degrees of negativity. A small medical bill might be an oversight. A large installment or revolving account is not.

ifyoubuildit · September 2005

What about phone bills, cable bills, etc?

rroyce10 · September 2005

..... Electric bills, gas, cable, phone bills .... they cover the "cumze ga" ......

Terry.

rubi · September 2005

This forum is so useful!

My case: I am going to graduate in two months from graduate school. I will make about $80K/year. I want to order a Scion TC 06. I have an excellent credit history but almost no savings. My credit union is offering an interest rate of 5.89% for 60 months. My question is if the dealer can do better? Are there any incentives on the Scion right now? I have to put a deposit of $500. Do I have to sign a buyers agreement when I order? How does it work?? I am a first time buyer.

CarMan@Edmunds · September 2005

You're welcome chris333.

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CarMan@Edmunds · September 2005

Hi rubi. Congratulations on your coming graduation and lined up employment. Toyota has not had the need to provide any sort of incentives on Scion models. The 5.89% interest rate that you were quoted by your credit union is very attractive. I suggest that you get pre-approved to finance the car that you want through them and then visit the Scion dealer that you plan on buying from and see if they can beat your rate. Toyota Financial Services' standard finance rates for Scion models vary by state, but in some its rates for consumers with excellent credit (scores over 730) are slightly lower than the rate that you were quoted. Your dealer may be able to find an independent bank that is offering slightly lower interest rates on new car loans as well.

I'm not surprised that the dealer that you are working with wants you to make a $500 deposit when ordering a vehicle. This covers them in case you order a combination of options that will be difficult for them to sell if you back out of the deal. They may want you to sign some sort of agreement, but it really is not binding until you physically take delivery of your new vehicle.

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rubi · September 2005

Hello Car_man:

I appreicate your quick response. I will take your advice and see what rate the dealer offers. Thanks!

CarMan@Edmunds · September 2005

Hi kctime. I just moved your post about leasing a Chrysler 300 SRT-8 to the following discussion: "Chrysler 300: Lease Questions". Please check there for my response. Thanks.

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CarMan@Edmunds · September 2005

You're very welcome, rubi. Let us know if you have any other questions and good luck.

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rlindsay · September 2005

How did your 'net financing turn out? I'm not sure I trust this new method of financing. Let me know if you had any problems, please.

iamjustablur · October 2005

Hi, I'm looking to buy a car soon. I have pretty bad credit, nothing recent more recent than 3-4 years aside from a few small medical bills and a $600 ambulance collection. I have a 4-5 year old repo that was charged off last year, and a few other minor collections from a few years ago. My fico is 500-540 (lo-hi)

I work in the mortgage industry, and we have an option called "stated income" where you say how much you make and as long as it is within the average income for the line of work you are in, the banks won't verify income, just employment. We also have an option called "no doc" where nothing is documented, no income, no employment, no assets, nothing. as long as you have clean enough credit, the banks assume you are responsible to pay your mortgage and they hit you with alittle higher rate, but you get a loan. is there anything like that in auto finance?

What i'm wondering is, what banks/lenders are more flexible with bad credit, where I can still choose the make of car I want, for example if I want to buy a 2006 honda. Is it a matter of how big the down payment is? I'm hoping my only options aren't "ugly ducking" or "bar none"

thanks in advance for any advice

rroyce10 · October 2005

.... **I work in the mortgage industry ......**

You should know a little more about credit and how it effects you if you're in the mortgage business ...... you do know what a 500ish Fico score does for a a mortgage, right.? ...... for starters, you're going to need some cake down, some big cake .. probably at least $3,5/$4,500 down just to get started .. your probably going to be lookin' at something pre-owned or new with a big rebate and the dollar amount is going to be in and around the $10/$12,0ish range based on your income, your debt ration and what you're telling us ..........

I'm sorry, but I gotta ask .... your in the credit business, why didn't you pay-off some off the debts and re-start your credit history .....?

Terry.

iamjustablur · October 2005

I did get rid of some collections a few months ago by offering the creditors 10 - 20 cents on the dollar, after they sent me a signed letter promising to show the account paid as agreed, the ones that wouldn't do that just deleted the trade line completely. I got away with paying $2,500 in debt off with only about $450.

I got in an accident a year and a half ago and have a few medical bills that my insurance didn't cover until they turned into collections, so now i'm disputing those. I am slowly working out my credit issues, but for now I just need to get into something new, I don't really care about interest rates because on the amount I would be borrowing, the difference between 7.99% and 13.99% would mean about...50-100 dollars a month payment wise, and at that I don't really care. I'm just wondering If i can get financed with a big enough down payment or if I have to wait until my credit is clean to even bother..

achenator · October 2005

Like many in their early 20's i misused my CC. Fast forward to early 30's and I have seen the light. My score still haunts me. Stuck on 680. Worst thing I ever had on my report were a couple of 90 days late almost 6 yrs ago. All accounts were paid, no charge-offs, no BK's or any thing like that. Last late payment about 6 yrs ago. I still have a couple of these cards though I RARELY use them. I am reading postings from people who have had BK"S a couple of years ago and have similar scores to me. Is there ANYTHING I can do to raise my score? I don't think there are any errors an my report, so there is nothing to dispute. I have gotten a good rate over the past few years by piggybacking on the wife, but it would really be nice to walk into a dealership and get the best rate without having to hear about my low score. I have about $27k in CC but only carry total balances of about $1500, so I don't think that is hurting me. Can I call these creditors and ask them to remove this neg. information? Will it go away on it's own after a while? If so, how long? Thanks.

isellhondas · October 2005

Houses usually APPRECIATE and it's hard to move a house.

Cars can disappear and they DEPRECIATE.

A lender will be willing to stick his neck out more on a house than a car for these reasons.

cti · October 2005

Sounds similar to me.

My score is also stuck at the upper 600s. The most correct credit report is also the one with the lowest score - about 685.

I don't think 680 is low, maybe a little below average. (40th %ile maybe?)

Can you get a loan through a credit union? I received the best rate through Navy Fed with a 680 score.

It sounds like your past financial misdeeds were well in the past so time is on your side here. I believe that credit reports go back 7 years so in a year or so lots of deragotory info will start to fall of your report and that should help your score.

An alternative to waiting is to just borrow less and/or borrow for a shorter period of time. My loan is 36 months at 2.9%. My total interest payments are 55% lower than at the 48 month rate of 4.9%.

Jason

achenator · October 2005

I'm sure I could get financed through my credit union. It would just be nice to not HAVE to include the wife in order to get the best rate. I usually finance 5 yrs and pay off in 3 or so. I usually make 3x more in 6 mos during the summer than I do the rest of the year so I like the attractiveness of a low payment but I always wind up paying much more. I will prolly have to include the wife on the next deal anyway because we will have 2 car payments for a short period of time while I sell my car and we are both on the loan for her car. We like to drive newer cars but we limit ourselves to one car note at a time. I plan to buy a TL,sell my Accord and use the proceeds to pay off her Odyssey. I know the money comes from the same place and I windup still spending the same amount of money but i like paying 1 car note. Also Terry often says that neg. info doesn't magically disappear off of a credit report after 7 yrs like everyone thinks. After 7 yrs can I call and have this instantly removed? :confuse:

autumnwalker · October 2005

(California)On wednesday I went in and purchased a vehicle for 14k for 250/mo. On the contract I entered my old work's address I worked at 2 months ago because that was the longest history job and I just started at my new job, and didn't think I would get approved. I already have another car that I am trying to sell with high monthly payments to get into this new car; I was told at the dealership when I was signing the contract that I would have to sell my current car within 2 weeks to get approved for the new car. My buyer that was going to purchase my car I'm getting rid of, told me that he can't buy it this month. Immediately upon hearing this I returned the new car to the dealership(Saturday) and gave them the keys because I assumed I wouldn't get the loan, and wanted to save time and any trouble by giving them the car back right away.

On the contract it states "upon credit approval" that the contract will go into effect. Now checked my credit report and say that the dealership used about 14 banks to pull my credit to get me approved with any of them. When I came in to return the car, we all went into the finnance managers office, closed the door, and he told me that because I committed fraud and lied about my current job company(I no longer work there) that he can send this information to the cops and get me thrown in jail for violating a federal crime about lieing on the contract form. He said that I was approved by HSBC even though I already have a car loan. They also called to request "proof of residence", and "proof of income" in order for me to get approved.

My old car has 37k left on the loan and I can get about 34k appraised on it. They want to have me trade in my old car and add the difference to the loan for me to get the new car from the dealership. If I don't agree to this and try to sell my old car privately then come back, they said they will prosecute me. BUT for somereason if I do a trade in they will do the deal.

Many things seem wrong. I know I lied on the form and that was wrong. BUT-- when I first asked how to get out of this deal, the general manager said I had to pay him 5k on top of the 1500 I put down and they will cancel everything and go our seperate ways. Then I asked "how about 3k?" He said ok. So he wants 3k plus my 1500 downpayment to cancel this deal. Isn't this a bribe, and illegal? They also said I WAS APPROVED by ONE bank (hsbc) on saturday when I returned their car. I asked for the number and contact of HSBC to call them myself. NOW the Owner/General Manger is saying that he's not even sure if that bank is the one who approved me, AND that a couple banks approved me, but he won't give me their names or anything.

He is threatining to prosecute me if I don't do the trade in, BUT is also willing to sell the car, not prosecute me, and do the trade in?!!! This seems very strange. PLUS my credit is BAD: 570 score with credit cards maxed out, and a 37k car loan, plus LESS than 6months credit history. I have NO derogatory/late/collections/bankruptcy's etc. on my credit though. I'm paying 686 on the car loan plus credit card payments, and making only 1800 a month take home.

Do you think I can possibly be approved without having sold my current car?! IF I say "forget it" and walk out, can he go ahead and prosecute me for just lieing about my current job company?? And since I'm not financed the deal should be off right??? They have the car in their parking lot since saturday. Them just seem like they are trying to squueze some money out of me.

P.S. They sold me a "rollback" car (someone bought it, but was unable to be financed, so they took it back) and sold it to me as a New car price, but wrote down "used" on the contract. Wouldn't this make it harder for banks to approve me if I was doing a trade in and they added 4-5k on top of a used 13k car? They seem very shady. Can I put a stop pay on my check for downpayment? Will they come after me for the check? What should I do? I Don't want to buy the car from the dealership anymore. I want to keep my old car.

rroyce10 · October 2005

.....**Many things seem wrong. I know I lied on the form and that was wrong. BUT .........**

But ......?!?

1.) You don't make enough income, 2.) you lied on your application, 3.) you have a Huuuuge outstanding loan and 4.) 10+ lenders turned you down because of "hinky" credit ... other than that ~ everything is going your way ....

I doubt very much the dealer will prosecute, they will probably just keep some/part or all of the downpayment (as they should) ....... the real value of your trade is probably a lot less than $34 .. are you that naive that you could purchase another vehicle with $37,000 hanging over your head and not trading ..?

**They seem very shady .....**

1.) You lie on the app about your income and job, 2.) you try to sell a vehicle you don't own and 3.) at the same time you structure the deal as it was sold and then 4.) bring the new car back when it's not --- and then you say: "They seem very shady" ........ You didn't print that with a straight face, did you .......?

Terry.

karenc4 · October 2005

I'm going to be car shopping in a few weeks. Looking at the '06 Civic. I want to put down about $6,500, and finance the rest (probably about $12,500).

My credit scores: Equifax/FICO - 707; Experian Plus score - 736; and Trans Union - 762. Pre-tax I make about $4,700/month (I've had the same job since '98).

The bad news: I seriously racked up credit card debt. (Stupid of me.

) No late payments or collections, fortunately -- everything's current and "paid as agreed", but I'm close enough to being maxed out to hurt my score. The good news: the hubby and I are selling a piece of property, closing next week, and we're taking some of the money and paying off the cards, my current car, and the mortgage on said property. So by the end of the month my only debt will be the $900/month mortgage with my husband. I'd like to keep the card I've had the longest and throw $50 on it every couple of months and pay it off, just to keep it active, and also keep the card with the highest limit and lowest rate (and stuff it in a drawer, only to be used in case of an emergency). I have two others that I'd like to close as soon as they're paid off.

Now, my credit history only goes back to '98, when I leased my current car (hubby co-signed). Got the house in '99 (in hubby and my names); and then a little while after that... well, the cards came. (The sad thing is, I'm in my late 30's now -- I was already old enough to know better when I got the cards.)

My questions: About how long should it be before the $0 balances show up on my credit report?

And: how much would paying everything off affect my score? I'd like to be able to get a good interest rate. I read somewhere that the average for a car loan is 7.5%; what are the odds that having everything paid off so recently would get me a lower rate than 7.5%?

Thanks.

danf1 · October 2005

It can take a few months sometimes for 0 balances to show. Ideally it wouldn't take more than one month, but we don't live in a perfect world. Your scores seem high enough to qualify for good rates as it is, so it doesn't sound like it would make a very big difference either way.

Kirstie_H · October 2005

1) Your credit scores are good, and you have a steady job with a very reasonable income. You should qualify for a decent rate, and if you can wait a few months, maybe slightly better. You can use one of the free credit reporting services to check your credit score - you have to pay for them after the trial period, but it's not a bad thing to subscribe to.

2) THANK YOU for admitting that the credit card debt issue is your own mistake!! It's refreshing when members don't try to blame their errors on someone else, or get mad at a dealership/finance company because their debt-to-income ratio is too low.

You should be fine

karenc4 · October 2005

THANK YOU for admitting that the credit card debt issue is your own mistake!! It's refreshing when members don't try to blame their errors on someone else, or get mad at a dealership/finance company because their debt-to-income ratio is too low.

Oh, believe me, if I could blame someone else, I'd do it in a heartbeat.

Thanks for the advice on the credit reporting services. I was wondering if it might be worth it. I'll look into it.

Anyway, just so I understand -- I was thinking of buying the car as soon as the $0 balances showed up on my credit report. If I understand correctly, then it's probably a good idea to wait a little while longer?

Thanks again.

Kirstie_H · October 2005

I too am a big advocate of:
1) ignoring your problems, or
2) if #1 is impossible, blame them on others

You've got a decent credit score - and hopefully it will rise a bit at the same time the $0 balances show up. I don't think it's going to be of great benefit to you to wait as it just won't affect your score or the interest rate you can get in any significant way.

But like I said, I really think a credit reporting service (like freecreditreport.com) will help you keep an eye on where your score is headed and when the $0 balances show up over the next few months. Reporting mistakes are made not all that infrequently, and if you're not seeing your big ol' zeros show up, you'll want to follow-up with your creditors and make sure they get reported to the agencies.

stickguy · October 2005

I wouldn't get too hung up on the rate. First, putting down 1/3+ on a Civci wil lput you way above water, and should help the rate since the lender has no real exposure. Plus, the difference on a 12K loan of 1-2 percent (assuming you keep the term short) isn't that much, so a bigger concern should be if you really need the car now, buy it.

qbrozen · October 2005

i don't think you've got anything to worry about. with that credit score and income, the dealers will be thanking you for being so easy to finance. I've got a huge mortgage payment and fairly significant credit debt, but I had no problem putting 2 car payments under my name, to boot, at the top-teir rates. And both times I wanted to add my wife to the loan, figuring the extra income would be necessary for approval, only to have them tell me i qualify for the best rate by myself, so don't bother. and they are right.

jsmith9 · October 2005

I recently bought a 2006 civic with 4k down and financed the rest for 72months through Honda. I have been driving the car for a week and today the dealer tells me that the "bank won't let me finance less than 15k for 72 months". He claims my options are 1) Finance the identical amount for 60 months (my payments would increase significantly but the rate would go down). 2) He could give me back 1k in cash and add that to the financing which means I will be paying interest on that for 6yrs...not a good thing.
I feel that this is THEIR fault as the contracts were signed and the car delivered to me days ago. What are my options? Should I try and get more money off the car (i.e. he gives me $1500 back but adds only 1k to financing)?
thanks for any input

stickguy · October 2005

never heard this one before. I probably would tell them to go figure it out. I can't believe that a lender won't just accept the deal as is, but who knows.

Assuming that isn't an option, your best bets are telling them to work it out to be the same payment (either a lower rate, or they kick back some $$) at the same term, or just go to 60 months.

##soapbox alert!!##

Just my opinion, but 6 years financing is too long for most cars, certainly a cheaper car like the CIvic. You would be better off chopping the term down. Once you stretch payments out that far, there usually isn't that much of an additional principal required monthly to cut years off the term. And in general, if payments have to go out that far to barely squeeze into the budget, you probably are overextended on the car.

##soapbox off!!##

jsmith9 · October 2005

Yeah, I hear what you say about the 6yr loan but I plan on pre-paying later on when my household income increases significantly (medical resident at present). Yes, I know I will be paying more interest but I won't be OBLIGATED to make the larger payments right now. Besides, under the current situation it seems I will ahve to shorten to 5yrs but hopefully I can get a few more bucks off the car for my trouble. Coupled with the lower interest rate, this could turn out well.

kyfdx · October 2005

Assuming you don't get any more money off the car (which I think is a safe assumption), just go for the 60 month payment at the lower interest rate...

I know the payments are larger, but that is definitely a no lose proposition... You will be way ahead in the long run...

I agree with the above soapbox comments... 72 months is too long...

regards,
kyfdx
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fordfool · October 2005

> today the dealer tells me that the "bank won't let me finance less than
> 15k for 72 months". He claims my options are 1) Finance the identical
> amount for 60 months (my payments would increase significantly but
> the rate would go down). 2) He could give me back 1k in cash and add
> that to the financing which means I will be paying interest on that
> for 6yrs...not a good thing.

The dealer gambled on getting you financed or on your naivete. The
options are (1) return the car and get your deposit back or (2) the dealer
makes the financing work. The dealer certainly doesn't want option 1,
so he'll get you financed one way or another. Somewhere in the sales
contract you'll find:

Under the Federal Truth-In-Lending Bill: "If you agree to assist me in
obtaining financing…this order shall not be binding until all of the credit
terms are presented to me and are accepted by me. If I do not accept the
credit terms, I may cancel this order and my deposit will be refunded."

jsmith9 · October 2005

As far as I know, I was approved for the loan and I signed the loan contract already. This issue is being brought up AFTER the loan CONTRACT was signed. I had filled out the financing paperwork (i.e. the APPICATION) a week earlier. SO, this isn't a classic case of the Yo YO loan because my driving off in the car was not simply done by hoping that credit would be available, I was already approved for the loan. At least, that is what I was told.
After looking up Truth in Lending (TILA) it seems lenders liability is only up to 1000dollars so they have every reason to make this situation miserable for me.

rroyce10 · October 2005

.... ** feel that this is THEIR fault as the contracts were signed and the car delivered to .....**

This ain't a dealer thing, it's a lender thing -- and the lender "conditioned" the deal ... meaning: the lender didn't feel comfortable with the extended terms .. maybe it was your debt ratio, maybe not enough credit showing on the bureau, perhaps not enough money down .....

Blaming the dealer is like blaming a real estate agent because you can't get approved on that new house ....... obviously the lender feels more comfortable with shorter times ..

Terry.

jsmith9 · October 2005

My loan WAS approved, I have the contract in front of me. ANd they don't want MORE money down, they want less!! THey want me to FINANCE MORE MONEY for a longer term!!! You have it all backward Terry bjut thanks for the input anyway.

danf1 · October 2005

Most banks do have a minimum that they will finance for extended terms. Did you ask the dealer if they could do 66 months? Lenders usually will do 66 for less money than 72, and your rate should be lower as well.

grandtotal · October 2005

Am I missing something here? Why don't you just accept the $1000 in cash from the dealer and use it to pay down $1000 of the principal right now?

jsmith9 · October 2005

Ok, just to let everyone know how i did:
I will tell you that I recieved a loan for lower interest for the same term (6.14% for 72months instead of 6.95% for 72months), I got $500 off the price of the vehicle and Mudguards for Free (total savings about $600). The dealer then refunded me $1500 from my downpayment (i.e. increased teh amount financed by 1500). The net effect is that I increased the financing by $900 (1500-600 = 900) so as to meet the minimum for 72months (previously financed 14122, now financed 15010). So I saved $600 overall on the car and reduced my interest rate by 0.8% for the same term length. The reduced interest rate saves me 200 over the life of the loan so all in all I saved $800 on the car, and have ready cash on hand which I can use to pre-pay if I like, resulting in further savings

This seems like a silly deal for American Honda Finance (AHF) because they end up making LESS off of my loan but the loan amount is higher. Total finance charges on old deal was $3,188 but on new deal is $2,971. Total cost after finance charges before: $21,810, total cost after finance charges now: $20,982 IF they would have thought about it logically they would have given me the old deal and kept their mouths shut.Oh well, at least I saved money in return for all the aggravation (see below).

NOte: This deal was arranged by me after AHF threatened to REPOSSESS my car if I didn't agree to do whatever they wanted. I threatened to RETURN THE CAR after being so threatened and the guy at AHF essentially dared me to. So after some choice words I went back to the dealer.When I showed up screaming about having been threatened by AHF and stating that I was returning the car as per AHF's request they quickly became willing to "renegotiate" teh contract since the previous one was, indeed, legally binding regardless of the corporate "rules" of AHF.
So, when these guys play hardball it pays to play hardball right back.

soxfan1452 · October 2005

I would like to lease a truck and pay for it in cash in advance. My credit is so so, and after looking at intrest rates reguarding purchasing a car, leasing seems like my best option considering my credit situatuion. Is paying for a lease in advance possible?

stickguy · October 2005

Yes, you can do it. At least, I remember Frod offering them at one point, but I assume you still can.

danf1 · October 2005

GMAC also offers a one pay lease. It will usually get you a lower interest rate and should make getting approved easier since they are getting all the money up front. If you do this, please drive carefully. If your car is totalled you are left with 0. The bank will get paid off and your money is gone.

climbingfool · October 2005

i am wondering if anyone knows of any crazy alternative lending programs out there that may fit my scenario. mainly, i am wondering if there is anyone who will use 12 months of bank statements to verify income. here's the scoop:

my credit is horrible (550 score at best), and my current vehicle is about to be reposessed. i have been self-employed for less than 2 years, and don't have 2 years worth of tax returns to prove my self-employment status, nor do i have an accountant who could "vouch" for me. any dealers/banks i've talked to so far require either 2 years of tax returns showing that i'm self-employed, or a paystub with year-to-date earnings on there. i am an independant contracter and receive a 1099 form from the companies who contract out to me. last year's 1099 only showed 50k, but i don't have any debts showing on my credit report other than my current auto loan. the only other monthly bills i have are rent, insurance, cell phone and utilities.

i have a buddy who is in the mortgage industry, and he told me that they have stated income loans (which still require employment verification either from an employer, cpa or tax returns), and no doc loans that don't verify anything. the problem is, i make money (enough that i should qualify for a decent monthly payment), i just can't verify it. my buddy tells me that some mortgage lenders allow 12-24 months of bank statements to be used to verify income. they add up all the deposits during that time, and divide it between the number of months to come up with an average monthly income.

i am wondering, does anyone know of any auto lenders who would consider this same method? and if so, what kind of credit history do they require? i figure with my car about to be reposessed, low credit scores, crappy payment history, and not being able to use anything other than bank statements to verify that i do actually make money, i might be completely out of luck.

if there is anyone around here who knows of any options, i would really appreciate any help and/or direction you could give me. thank you!

stickguy · October 2005

if your current car is about to be repoed, that's a pretty good sign that they shouldn't lend you money, isn't it?

Either make the payments to keep the current wheels, or, if it gets popped, be prepared to pay cash for whatever you can find that fits your wallet.

And, even though they are taking the car, they will still want their money if it isn't worth what you owe, although theoretically they will owe you some money if they sell it for more than you owe. If that is the case, you would be better to sell it yourself first to avoid the credit hit.

danf1 · October 2005

Not to side step your questions, but stickguy brings up a good point with your current car. First if you make as much as you claim, and don't have any other debt except utilities etc... why don't you just catch up on your current payments? Banks aren't stupid. They do realize what is going on with your current loan as it will show delinquent on your credit report, and will probably require that you pay off or trade in your car. That is assuming that they will approve you at all. Pay up on your loan and wait a few months. If you wait until February, then you will have 2 years of income proof right?

That said, if you choose to try now Capital One might be your best option, but I wouldn't hold my breath with your current car note being delinquent that they will do anything at all.

climbingfool · October 2005

no, that's a good point. looking at my income on paper, and averaging it out, it looks much better than it really is... but that's because there are a lot of swings in my industry. i can go a couple months or more without a paycheck and then get a big check and pay all my bills to get caught up. so its not like i have the money laying around to go make those payments. if i did, i would have paid them a long time ago. at this point, i owe 3 months of payments, and got a demand letter from the bank giving me about a week to come up with the balance in full. i've gotten these letters before, and as long as i bring myself current, it ends up being ok. well, as luck should have it, their demand date is about a week or two before i will receive a paycheck large enough where i could pay off my past-due amount. my first thought would be to find someone who would lend me the money so i could save my car, and pay them back when i get paid again. but, my car (it's actually an suv) gets horrible gas mileage (14mpg is lucky for me... probably closer to 10) and i'm sick and tired of paying over $50 each time to fill it up. depending on my week, i could be spending in excess of $100 each week on gas alone. so now, if you add on $300/mo in gas along with my car payments, that ends up being way more money than i want to spend on the stupid thing. not to mention its getting to the age where things are starting to go wrong and i am going to need to start pumping more and more money into it. so, my thoughts were to just cut my losses, turn it back over to the bank, and walk away. the only problem is that i am without a car then, so that's why i'm wondering if there are any options for financing in my situation. if not, i'll take a couple thousand bucks and buy a beater to get me through the winter, and see what happens after that. i figured the odds were extremely slim, but i thought i would at least ask and see.

stickguy · October 2005

Unfortuneately, the bank wants what you owe them, not your car, which just happens to be the collateral they can seize. Whatever you still owe (and it might be more if the bank sells it at auction), you still owe them, so expect more dunning letters after the repo.

The ultimate indignity: paying for a car that you no longer have.

In any case, until you get stabalized, buy the cheapest decent car you can. You can get decent trans for less than 5-8K. Get something boring, maybe a Prism or Sentra, or more likely a domestic (nice retirees Buick, a Malibu or some such thing).

There are a few people floating around here that have lots of experience dealing with the discount end of the market, so one of them might drop in, but please try to temper your language. You might not believe this, but most people here are looking to help, and have been on the board for a long time.

We do tend to preach a bit though. Don't take it personally, it's more of a public service (object lesson) for the rest of the viewers.

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