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Yes, refinancing a car is typically a terrible decision...You increase the time you pay off the loan, reset the clock on the loan terms (typically) all while losing value on the vehicle you're slowly purchasing.
Ideally, pay cash for vehicles. If you can't afford to pay cash, finance and stick to the finance plan. If your interest rates are insane (such as 23% while dealerships are offering 1.9%) then save up some $$ and buy yourself a cheap beater...Sometimes it's better to throw $400 a month at a beater for 3 months and end up with a reliable car...then throw $400/month at a new car for a period of 5 years, all the while the new car will become more unreliable and require an additional $400/month once it's finally paid off.
I have a hard time with it, but often enough, cheap cars rule!
I feel bad for people who are taken advantage by dealerships like that... Hence the lack of respect these sharks get...
No person should be conned into paying this huge interests rates for a vehicle. A car is not an investment, if she could afford is $490/month, there were much better deals to be had.
Your mom needs your help to manage her financing, or find a friend that has some basic understand in financial decisions to help her.
Warning to everybody, there is a reason the crook dealer wants to find out how much you can afford for your monthly payment. Once they know $490 is the max they can squeeze from someone, they'll look into maximizing their profit with that.
All the dealer needs to know is the best competitor price he needs to beat - on a specific vehicle that you want. Don't even discuss financials with dealer, until you have the lowest possible price.
This interest rate is too high. I wonder why people buy things like car with such a crazy interest rate where you pay mostly interest every month and principle stays pretty much the same.
Because they can't qualify for anything else due to their financial history being either non-existent or being incredibly irresponsible (constant late payments, flight from debt, bankruptcy, etc...). Without these high risk loan dealers, those people wouldn't be able to buy anything on credit. The only reason a business will take such risks is if the profit from such a risky venture is adequate.
I feel bad for people who are taken advantage by dealerships like that... Hence the lack of respect these sharks get...
No person should be conned into paying this huge interests rates for a vehicle. A car is not an investment, if she could afford is $490/month, there were much better deals to be had.
Your mom needs your help to manage her financing, or find a friend that has some basic understand in financial decisions to help her.
Warning to everybody, there is a reason the crook dealer wants to find out how much you can afford for your monthly payment. Once they know $490 is the max they can squeeze from someone, they'll look into maximizing their profit with that.
All the dealer needs to know is the best competitor price he needs to beat - on a specific vehicle that you want. Don't even discuss financials with dealer, until you have the lowest possible price.
Thing is, she "may" have been able to find a better deal, but we don't know her financial history, so a better deal "may" not have been possible. It all depends.
It wouldn't surprise me if the dealer took advantage of her in terms of the loan, but like I said, we don't know all the details.
Without knowing anything about her, if she is foolish enough to take on a 23% loan, then chances are she is none too smart about her own finance to begin with.
I'm trying to see if I can post a reply now. (Every time I try responding to someone, it tells me a mod needs to approve my comment... I guess they aren't doing so ).
My mother actually had pretty good credit at the time. I don't know why, but she ALWAYS lets people take advantage of her and she complains about me because I am the total opposite. No offense to my mother, but it seems like she wants me to be a coward also. She actually gets ticked off at me when I stand up for myself...
Anyhow, hopefully this one message goes through. I have tried answering all of your questions and saying "thanks" for all the help, but again, the mods aren't approving my posts.
What was her credit score ... -12?
Did she roll any past loans into this one?
Has she been up-to-date with her payments?
What was her orig APR and the refi APR?
It's Jessica. I apologize for not getting back to answer all of your questions but I do appreciate the info.
I had written much more details, answering each and every one of your questions. However, I kept getting a message stating that a mod needed to approve my posts which they never did.
I'm sure the same will happen with this account, so just know that is the reason I am not responding back.
I really appreciate all of you for taking the time out to answer me!
Because they can't qualify for anything else due to their financial history being either non-existent or being incredibly irresponsible (constant late payments, flight from debt, bankruptcy, etc...). Without these high risk loan dealers, those people wouldn't be able to buy anything on credit. The only reason a business will take such risks is if the profit from such a risky venture is adequate.
Agree. I think some people just don't have any money sense. If one is paying almost $500 per month just for car, I assume he/she can buy a used car by paying in cash which will save them a lot of money. Of course if you want to drive a new car so that all your neighbors are jealous then you end up paying $48K for an $18K car!!
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