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Hi all, I just recently purchased a vehicle about 3 months ago, and had it financed for 18.5k with 1.5 down. It booked for 22k but I got it for 20 since I really hassled the dealers into getting me out of their hair and giving me a discount. I would like to sell it for 800 over what I bought it to recoup the licensing and dealer fees. My credit score at that time was somewhere in the 720 range and I got a credit union to finance me at 6.5% with only a couple years of having a credit card. Since that time I have been making about $50 over the minimum payment every month(not sure if it helps but I am also trying to save on interest costs as well) and have my credit card paid off.
Hind sight is 20/20 and I could have planned it much better but after 3 months of realizing that it will take a 5 solid years of making payments over minimum and that with my other bills, it won't be feasible much longer. The only way I can continue is to get a 2nd job, but I am trying to avoid burning myself out. I don't really want to go in and ask the loan manager this without maybe getting some good feedback here first, but is getting rid of the vehicle in the next 2 or 3 months really going to screw me? I have a pretty decent commute so I absolutely need to have a reliable vehicle but I have been doing a lot of research and have found a few good older ones for the 8-10k range.
This would require me to finance another vehicle and I am not sure how keen banks are to doing something like that after a person has only had their current car loan for less than a year. I can still make the payments for another 3-4 months but I don't want to go much longer over that, but on the flip side I don't want my credit in the toilet after I worked my ass off to build it up.
As far as getting rid of the vehicle, would someone go to get financed at their bank and that bank would pay mine, and mine would cancel my loan? I won't take it to a stealership to buy since they just rip people off.
Your car has already depreciated a few thousand, so recouping the whole amount you paid for it won't be possible, at least as far as I understand. Your $20K car is now worth at best like $16-17. I don't have the make/model so I don't know the exact number. You can't flip cars unless you add some extras and even then....
You can go back to the dealer, explain your situation and see what kind of deal you can make with them. What they can do for you is take some money from the original loan, add it to the new loan of a used car. It would be a lower payment than now but your used car would cost more.
I've heard people of dropping the cars off at the dealer (if dealer financed) or at the bank and just leaving it there, but that would have a negative effect on your credit.
Basically you messed up. I also bought a new car 3 years ago, but I had my reasons. Only now, having paid 3 years on it, is it worth more for me to resell it, than what I have on the loan. I knew this going in, so this is fine for me, but some people are averse to this.
I just reread your post and had one thought, but it's not the most ethical. Since you have good credit now, you can try to go get a used car financed. Once you have that car, take the new car to the dealer and just leave it with them (if you have dealer financing) or call the bank and tell them you can't pay it, but they can have the car. Your credit will go down, but only for about 3 years or so.
Was this a new car you bought? If not it may not have depreciated as much as Katestar thinks.
To answer your questions, no. It will not hurt your credit rating at all to pay off the loan early. If anything, it should improve your credit rating further. If you haven't been late with your current loan, getting a new, smaller loan should be a piece of cake.
Your bank should be named on the title to your car. They won't sign it over to a new owner until they have the balance of the loan in hand. I'd check with them to see how they want to handle it.
If you need to get a second job to make the payments until you sell the car, do it. That would be much better than defaulting on the loan.
No, paying off a car early wouldn't hurt you at all.
Finding a buyer who is willing to take over your loan is a whole other story. You will definitely OWE beyond what you paid. No question about it. I have paid on my loan for over a year and I am still under water if I were to sell it. New cars depreciate by a few thousand after you drive it off the lot and it becomes "used".
I just realize it MAY be a used vehicle you purchased. If you purchased a used vehicle you will probably lose less money but you will still lose money I bet. It is very hard to find an all cash buyer who is looking for a used car that is that expensive. Most people don't finance used cars through private parties. So basically your only option would be to trade it into the dealer which they would totally undercut you on the price. In the off chance that you did manage to get a private buyer with cash/financing, they still wouldn't happily pay off your loan amount. They would want some sort of discount over what you paid.
To answer your question, you can pay off a car loan the day you finance it, just understand that there is a minimum finance charge you'll have to pay.
Quote:
Originally Posted by theroflcopter
As far as getting rid of the vehicle, would someone go to get financed at their bank and that bank would pay mine, and mine would cancel my loan?
There are a few different ways that the transaction might be handled, but in general you are correct.
Quote:
I won't take it to a stealership to buy since they just rip people off.
Dealerships don't "rip people off" when they buy cars outright, they buy at wholesale and sell at retail. It's how they make their living. Why would you expect them to pay you as much for the car as they could sell it for? Just because you're a nice guy? Some people choose to take the hit and sell to the dealer because they consider selling it themselves a hassle.
Ok, now that I have a few things to go on here: I have a mid 2000's truck, with low miles that is in much better shape than most trucks that have only been out for a few years. I live in a state where trucks lose very little value but cars are worthless. I have seen a number of 2009 Impalas go for 7 or 8k because during winter time you will almost be guaranteed to get stuck in the snow with a 2wd quite often. Mid 90's trucks typically go for 8k if they are taken care of.
My truck has lost several hundred dollars value at best. I have booked the price on it before and after I bought it and it has stayed near the same and I certainly don't abuse my property. When I went to the stealership to see about trading in my vehicle before this, they said they would give me $800 for it. Keep in mind that I paid $3500 for it and at the time I was thinking about trading it booked for 2500 not including the extras on it.
I also took my truck in for steering issues my truck had a couple weeks after I bought it. The limited "warranty" was worthless and covered nothing. Those noobs charged me $50 to take 15 minutes to look at it and tell me I needed an intermediate shaft and body lift cables to the tune of $415. I told them to give me the keys back and I took it to another mechanic and he said a huge pile of mud was caked on a steering component. He cleaned it up and didn't even charge me a dime and it has been fine. There is also no such thing as body lift cables, these guys are huge ripoffs and apparently can be since they are about the only dealers for most American made cars where I live. I checked them on BBB and they have an F rating with a pile of complaints that they didn't even respond to. They also gave my phone number to SiriusXM which my truck has and I have been getting tons of spam calls from them trying to get me to sign up for their service. So in response to duster, some dealers are good, but these guys are absolute crooks.
Now that I am off that rant, I personally don't see it being an issue selling it for 1 to 1.5 k less than it books for. I don't really want to lose $800 on dealer doc and license fees if I can avoid it. I certainly wont sell it for less than what I paid for it because I got a good price on it as it was and I would be getting ripped off selling it to another person for 18 or 19k.
Ok, now that I have a few things to go on here: I have a mid 2000's truck, with low miles that is in much better shape than most trucks that have only been out for a few years. I live in a state where trucks lose very little value but cars are worthless. I have seen a number of 2009 Impalas go for 7 or 8k because during winter time you will almost be guaranteed to get stuck in the snow with a 2wd quite often. Mid 90's trucks typically go for 8k if they are taken care of.
My truck has lost several hundred dollars value at best. I have booked the price on it before and after I bought it and it has stayed near the same and I certainly don't abuse my property. When I went to the stealership to see about trading in my vehicle before this, they said they would give me $800 for it. Keep in mind that I paid $3500 for it and at the time I was thinking about trading it booked for 2500 not including the extras on it.
I also took my truck in for steering issues my truck had a couple weeks after I bought it. The limited "warranty" was worthless and covered nothing. Those noobs charged me $50 to take 15 minutes to look at it and tell me I needed an intermediate shaft and body lift cables to the tune of $415. I told them to give me the keys back and I took it to another mechanic and he said a huge pile of mud was caked on a steering component. He cleaned it up and didn't even charge me a dime and it has been fine. There is also no such thing as body lift cables, these guys are huge ripoffs and apparently can be since they are about the only dealers for most American made cars where I live. I checked them on BBB and they have an F rating with a pile of complaints that they didn't even respond to. They also gave my phone number to SiriusXM which my truck has and I have been getting tons of spam calls from them trying to get me to sign up for their service. So in response to duster, some dealers are good, but these guys are absolute crooks.
Now that I am off that rant, I personally don't see it being an issue selling it for 1 to 1.5 k less than it books for. I don't really want to lose $800 on dealer doc and license fees if I can avoid it. I certainly wont sell it for less than what I paid for it because I got a good price on it as it was and I would be getting ripped off selling it to another person for 18 or 19k.
Well then you can always try listing it for sale. But I extremely doubt you will find a buyer who is willing to buy it for your loan amount. If you happen to sell it then update us! Good luck!
Hai i have a car just use for 2 year balance year is 7 years 1600 per month volkswagen to pay and the amout is still about 110,000 but thinking to change car ,but i will need to pay extra 15,000 to the bank if i want the seetle my first car and buy a new car below 100,000 is it worth or just continue paying
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