Did you recently take on (or consider) a loan of 84 months or longer on a car purchase?
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1. have enough cash to offset the negative.
2. dont buy a car that is more than $15-20k.
3. sell your car on your own when you have enough to pay the difference.
4. dont get a chrysler product. ;-)
if you cant do these things, then dont trade. you might be ABLE to, but it will put you in an even worse position in 2 more years.
if you REALLY need to get out of it, go to the bank and work out a personal loan for the balance and sell it retail. then go get what you want.
you will have the personal loan as a second payment, but you will be able to get good terms on the car you buy that way.
Isn't taking out two loans, a car loan and a personal loan similar to applying negative equity to the new car loan. If you take out two separate loans on for $12K for car and yet another personal loan for $6k, you might as well buy a $12K car and attach the negative equity to make it a 18K loan. Personal I think this is the best time to buy if you have negative equity. Keep looking at the incentives and rebates between now and December. You may be surprised at which car mfr are offering rebates. A few weeks ago Nissan(which I am sure you are aware) have $2K rebates on the Sentra, which has been unheard of in past years. This rebate will likely lower the amount of cash you will have to put down given your neg. eq. problem and the sentra is a better car than the neon. Keep looking at the rebates. You likely won't be able to get a Honda or Toyota but you can get something else that you would like for at least five years. Good luck.
Firstly. Your views of "ownership" are elementary at best and certainly do not come from a legal view. The legal owner is whomover is listed on the title/deed. A vehicle owner OWNS their car regardless of who is listed as a lienholder. A leased vehicle is owned by the leasing company - the vehicle driver (lessee) is listed nowhere on the title. Even if someone stops making payments on a purchased car, the lienholder doesn't OWN the car until they repossess it and TAKE OVER THE TITLE legally. Likewise, I own my home - My name is on the deed. Whether or not I have a mortgage has nothing to do with ownership.
Legally, No one can claim "ownership" of anything, regardless of what lien they have, until they transfer the title or deed into their name.
Point in case: I have a $2,500 lien on a contractors house from a judgement. That lien is second only to his mortgage. Saying that I "own" his house would be an ignorant statement.
Secondly, You're preaching to the choir when you talk about lease vs. buy. I am very positive about leasing because I couldn't care less who owns my cars, emotionally. There were many pros/cons that led me to leasing, I have recently decided I want to purchase because I just don't like being a party to a contract that says I'm going to keep the car for xx months.
Thirdly, Your investment argument sounds really ignorant. You buy investments for a return on value. Stocks are an investment. A house is an investment. Anyone who looks at a car as an investment is very ignorant. It's an expense that is just part of life.
Bowke, you make really uneducated arguments and really need to look into contract law and title law before you start arguing that a "lienholder owns the product". It's wrong by any legal definition.
having the rights and owning it are 2 seperate issues.
as far as my investment analogy, it IS valid. because of the amount of money you shell out ($20k+++), it is usually the 2nd largest purchase a person makes. therefore, it should be dealt with more seriously than $2k CDs, or $500 stock purchases.
my analogy was to illustrate that for the same reason one should buy a home, one should avoid buying a car.
Just my humble opinion!
The Sandman :-)
My Tahoe lease is supposed to be up in January. My new car is on its way to I put it up for sale. Found a buyer. At this point in time I HAVE NO RIGHTS TO SELL THE CAR. This is not only from my own knowledge about owning but was confirmed both by GMAC and credit union the buyer is going through. I have to purchase the Tahoe from GMAC. GMAC sends the title to me and I have go to the DMV and have the title changed into my name. Then and only then can I sell the vehicle.
We've had this discussion before and not only Car_man but most others who are actually in the business and/or lease vehicles agreed that I was correct. The tahoe was my 5th leased vehicle and I know what I'm talking about. This is the 2nd that I've purchased and then sold before the lease was up.
Tell me again about what "rights" I have as a lessee. I don't own the car. You cannot LEGALLY sell a vehicle with which you do not hold the title.
Terry has been in the business a long time.
I was in the business for a long time and have leased many times. I also minored in Contract Law.
I'm not sure what Car_man's credentials are but it's obvious he has them.
We all say the same thing about ownership rights and renters rights.
This whole conversation brings up so many scenarios. I guess Bowke things that because you have a "lease" on office space you have the same rights of ownership of the office space (or building?). You could sell, destroy, etc. it.
I just don't understand where he comes up with this stuff.
You're probably thinking of web sites like eloan.com and lendingtree.com. I am a big advocate for checking around to locate your best loan terms, so it doesn't hurt to check there. Even if you are approved for a loan and they send you a check, you aren't locked into using that loan until you hand over the check to the dealership. However, we recently got an even better rate through the manufacturer lending, so we went with that. The best advice I can give you is to explore all options and NOT close any doors.
The trade-in negative equity will be a factor, but depending on the value of the vehicle you purchase, and any incentives used as downpayment, it may not be awful. Again, in my experience the best thing to do is to check out loan options on your own, and also let the dealership help you.
And finally, check out our Scion xB discussion to see if you can get info on the seating. We don't have a lot of owners yet, but some shoppers have already posted in the Scion xB Pricing discussion.
kirstie_h
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2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h)
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Does anyone have any recent experience with Honda financing? What "tier" will I most likely be in and what do current rates look like? I'm hesitant to preapply online at hondacars.com because I don't want to mark up my scores even more with multiple credit apps. Does anyone have other online recommendations for auto loans? I'm guessing E-Loan will be similar to Capital One.
Any advice on these issues is greatly appreciated
the dealer will usually only charge the license/doc fees, and normally will charge them to the buyer, unless you specify otherwise.
we do this quite often, actually. the dealer then gets to report a sold unit, and depending on how your buyer pays for it, they can make a little money on the financing end of it too.
i agree that its not EASY to sell it and finish the transfer, but there are tools at your disposal to expedite the process if you want to use them.
You can check out honda specials on Hondacars.com, click on "special offers." Try putting $1000 down, to cover taxes and they will most likely approve you.
I don't think Honda does tiers, their offers are simple, you are either qualified or not. If you are not, then dealer will find financing on the side, but not through AHFC.
As for the whole leasing debate. You do not have the same rights when you lease as you do when you purchase. The main difference is the mileage and condition requirements. You can paint your purchased car pink and put 50,000 miles on it in the first year if you want. If you lease and paint your car pink and put 50,000 miles on it you will have to pay the leasing company a huge sum of money or buy the car at lease end for the residual.
However, it has been my experience that a third party can pay off a leased vehicle as long as the lessee authorizes this to happen.
The most important thing is to put $0 down when you lease. You are getting gap insurance so a large downpayment is unnecessary. It will lower your payments but you can always put the planned down payment into an account and let it draw interest until you need to use it.
We met Friday at his credit union. Signed a bill of sale with me agreeing to pay GMAC off within x number of days. They gave me a cashiers check for the sale amount. I sent a cashiers check today to GMAC and when I get the title from them (signing it over to me as the owner) then I will go and get it legally transferred into my name. I will then sign it over to the new owners and send it to them. Not to big of a deal really. That's just one of the things you deal with if you want to make a little money on a lease!
Selling a vehicle you own with a lien:
The lienholder signs off on the title and you sign off on the title so that it can be transferred into the sellers name.
Selling a leased vehicle:
The Lessor (owner) signs off on the title. The Lessee (me) transfers the title into my name. I sign off on the new title (as the owner) so that it can be transferred into the sellers name.
The only ugly step is that I have to go the DMV to get the title transferred into my name from GMAC but I guess that's not so bad as I made over $1,500 on the deal.
Initially the F&I guy quoted 9.95%. I told him I had a quote to refi the 4 year old car that was being traded in for 8.1% from Household Bank. He said he could probably do 7.59%. I told him if I was being quoted 8.1% on a 4 year old car with 80,000 miles from Household, that surely they would lower the rate by at least 1.5% for a new car.
I told him I would go home, apply online at LendingTree, have a check sent overnight and come back the day after next to pay for the car. He went to speak with the sales manager and asked me if I would accept 6.59%. I said yes, he told me they would need to call Honda for approval. He continued to complete the loan documents and told me the loan was approved.
The sales manager never came over but he may have given him a thumbs up or sent an email. I don't know if they actually had to call for approval at that rate or if I was approved all along and they were simply looking for extra profit.
I included $2,439 negative equity, from the trade-in, in the loan. The only money I put down was for the sales tax, title, licensing fees, and the $89 doc fee/service fee, totaling $800.
I would certainly hope you would get a better rate than my 6.59% from Amer Honda Finance. I'm sure Honda will beat Cap One's rate. You may want to apply at LendingTree prior to going to the dealership.
Don't worry about your score dropping due to multiple inquires. The algorithm used to calculate FICO discounts inquires within a time frame equalling less than a month provided they are not for revolving credit. Myfico.com explains this to a larger degree.
Sorry for the length, good luck.
I wrote a few days back about wanting a mini van, but having some credit card debt to pay off with the money we save from not having a car note. Well, on Friday my Sable went out and cost $400 to fix then hubby's 89 Buick Century went out and we found out that it will cost 400-450 to fix. I am done putting money in that car. The fuel injectors are bad and the guy says that the transmission is going. It would seem that we must have another vehicle.
Here is my issue, my transunion score is 580 and his is 552. We both have bk, but in the past 7 years I have only had 2 late payments! I can't understand why my score is so low. Anyway, do we stand a chance of getting financed at a decent rate? I refuse to repeat the 5 year rape we just finished with the Sable at 21%. Any advice would be appreciated!
Also, what does F/I mean?
Car_man
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Smart Shoppers Message Board
Hugs,
Michelle
PS. If I apply to cap one or lending tree do I have to have a vehicle picked out already? Do I still need a down payment?
Also, the more credit cards you have, the lower your score will be.
SHOULD they check employment? sure. but with that kind of credit history, they trust that you are prepared to make the payment somehow.
~Michelle
A year after the purchase I was approved by Capital One to refinance at 10.95%. I don't recall what my FICO was at that time.
I'm certainly not an expert, these are only my personal experiences. Hope you can use them to your advantage.
[Ford has a similar plan called the Customer Option Plan.]
Regards,
ATM
ford actually named their program the RED CARPET LEASE.
If it's a balloon, your wife should probably get a wedgie... but I doubt it is, because a balloon loan does not put any mileage restrictions on the owner. Mostly since they *own* it and do not have the option to walk away from it at the end of the payments.
Methinks you need to look through the paperwork...
-Mathias
we would like to have our combined incomes considered by the lender but will her score hurt our chances for a decent rate?
are we better off with just having my name on a loan application?
thanks
Car_man
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Smart Shoppers Message Board
if you split, she can get the car. if she gets the car, what happens if she is late on a payment or two??? bye-bye 730...hello 545.
put it in your name. if you split, then you can sell her the car and she can get her own loan.
i know this is depressing to think about, but its real life.
;-)
How do dealerships, banks, etc. look at people needing an automobile who are not currently working? My father said he would co-sign if I need his help (after all, this is his grandson I drive around) but I don't know if that would help me. He thinks my owning a home will help, but I would not know.
I looked through old discussions on this board and read a few on cosigners, bad credit, etc. so I understand more than I did an hour ago. But, I guess I'm curious how realistic I need to be, in terms of getting a 2003+ model SUV or minivan w/a decent monthly payment. My current pmts are @ $350. 5/3 has been GREAT about working w/me the past few years (behind on pmts but no repo).
I am also aware that I may have to "bite the bullet" and buy an older car, pay it off, then get better car later. I hope to not have to go this route, but we do what we have to, right?
Thank you for any and all advice. I'm open-minded and appreciate hearing different opinions, even if it's not "what I want to hear"!
A variety of factors affects which rate you will get. Your credit score, how many open lines of credit you have, what your revolving credit is like, your debt-to-equity ratio, work history, and length of employment at current job, will affect your loan rate.
You might want to check with you local credit unions to check what kind of rates they are offering people in your tier. They offer better rates then most banks. Just make sure you qualify for their field of membership.
Since you own your house, you may also consider getting a HELOC if you really, really need the money to buy a car fast.
Hope that helps.
Thanks,
PJ
Sounds like you got a pretty good handle on the concept :-)
Seriously, it's a loan whereby the monthly payments are kept low, but at the end of the agreed-upon time period, you have to come up with a lump sum to keep the car.
Sometimes (or maybe always, I dunno), there is a clause that you can just turn in the car and walk away owing and owning nothing.
It's a gimmick; if you need to do it, it's too much car. If you're really strapped, take a 6-year loan if you have to and buy a Toyota or Honda with an extended warranty. That's not good, but better than these shenanigans.
-Mathias