Which one of these cars should I buy? (mileage, sell, engine)
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OMG the dealer got a live one with you. You were in 'kind of a rush" and they saw a chance to take you to the cleaners. You didn't even tell us what they 'gave' you for the trade. 12% interest? Either your credit score is cr@p or you bought from one of these buy here, pay here places? Oh, and did you check whether your extended warranty even covers commercial applications of the vehicle?
Does your state have a cooling off period for loans or car purchases? Can you back out of this terrible deal? If not this is a life lesson you should learn from.... Finally what were the terms of the loan (i.e. how many years)? That should be good for a laugh, probably 60 or 72 months.... Also do you know the difference between APR and interest? Hmm, probably not!
OP has over $100,000 in student loans in deferment, only $500 to put down and a very low salary. 12% is probably pretty good for her considering.
I've just had such bad luck with cars, though, that "what if" is seriously looming over my head. I think I need to call the car company today and ask if I can cancel the extended warranty, and I also need to plug in the numbers and find the real cost of something going wrong with the vehicle. The vehicle was sold to me at a pretty fair rate. Kelly Blue Book puts a vehicle in similar condition with a similar amount of miles at around $10,000, and that's more or less what I bought the car for, before associated fees and calculated interest. I suspect that it's the extended warranty (that's how the price break down made it look) that made the price much higher.
My extended warranty covers all scheduled maintenance on the vehicle, though, for a certain amount of time. I imagine all scheduled maintenance of major components could cost a lot, but I should have gotten my list of numbers and considered this much more carefully before signing any paperwork. This is why people should never make fast big-ticket purchases.
Right now, I think my best course of action is to either cancel the extended warranty immediately or just use it for everything it's worth and take my car in for regularly scheduled maintenance, per the warranty's coverage. They've hit me with too many surprises lately, and, although it's way more than I want to pay, I can pay it off early and put it behind me, but from now on you can bet I'm going to be a strictly cash customer if I can afford it. That's three or more years of my life and salary wasted on a car loan! The financing terms were for five years, but I'm not planning to pay on it that long.
I would not cancel the extended warranty unless you have cash available to fix whatever might go wrong. If it needs a $1500 repair 6 months from now, will you have the cash? Yes, Toyota's are very reliable, however as you are approaching 100,000 miles on the car, it is to be expected that parts are going to wear out no matter how well made the car.
My Acura was the most reliable car I ever had and I got it to 315,000 miles with only one major repair (trans) however things still die of old age, and replacing something like the water pump, power steering pump, brake line, etc can still cost hundreds of dollars or more (just the parts sometimes were $500 or more, and now the way engines are, half the engine has to be taken apart to replace one thing underneath). So if you don't have the cash, don't cancel the warranty.
I wouldn't double up on payments, if you have that extra money why not use it to get help with your other issues? That's a little more important for your long-term success, don't you think? Even if not, you are most likely accruing much more interest on your student loans, are you not? Why not double those payments since the amount is so much more and interest is accruing at a far higher pace than it will with this car.
P.S. you don't figure interest the way you are, with financing it is complicated due to compounding or something...I don't understand how it works but I do know it's not just "12% = $1200" over the life of the loan, it doesn't work that way with loans.
KMB, I think Uber driving is going to be hard for a person who is chronically disorganized and can't converse with people. If you get ratings of 3 or less they won't keep you on, and even if they did passengers would reject you without good ratings from prior passengers. Remember there are usually many more drivers than passengers in any given area and being personable is a pretty basic requirement.
Re: Loans. I am surprised you were that naive to think loans work like that. Man, don't we all wish? I got a 3% loan on my house.
Paid $160,000 for my house at 3%... $4,800 in interest. Man, I wish.
Here: Car Loans | How Does Car Loan Interest Work? | IFS
Well, I already bought it, so I can't really change my mind, but I hope I didn't make a mistake. The retail price of the car was like $8500, but the car company financed it for me for 12 percent and $500 down, plus the trade-in of my old vehicle. The car is 2010, and it has around 98,000 miles on it. I checked the Kelly Blue Book value, though, and it's worth more than what they say they sold it to me for, but I'm a little concerned about my interest rate and what I can do to pay off the car early and avoid paying more interest than necessary. I also got an extended warranty just in case the major components, like the hybrid battery, fail. After all, I didn't want to be left without a vehicle due to a major repair and still owing on the car.
You paid 8500 for a car with 98k miles????????????? At 12% interest???????:e ek:
You could have gotten a NEW Chevy Volt 2016 for about 30k minus 7500 tax credit = 22.5 k minus your 500 and trade in.
Assume you have to finance 20k and that you qualify for 0% interest for 60 months or 2.9% for 72 months. You are paying $333 a month or 303 with a 72 month loan.
OTOH, 8k at 48 months 12% interest is 210 a month. However, you are purchasing a 6 year old car that has seen its best days.
Yeah that's a fundamental misunderstanding of how interest works.
The extended warranty/service contract is a rip off. And that itself gets compounded by the 12% interest as well. Cancel that asap. The routine maintenance it will cover is pretty much just oil changes and tire rotations around $40/pop.
Do not take what the salesman said about what the warranty covers as truth. Read what it says. Also definitely look to see if using it for commercial purposes such as Uber is listed in the exceptions that would void it anyway.
APR is annual percentage rate; I thought that WAS the interest? That's the way it works with credit cards. They gave me a high quote on interest because I don't have much of an established credit history, even though my credit score is good. No, I bought from a local Toyota dealer in the area and got qualified for in-house financing over the phone. They recommended I double up on payments to bring the total cost down, but I'm wondering if I shouldn't just cancel on the extended warranty, assuming it's not too late, and just take my chances. .
yeah, because then your payments won't look as insane as they truly are. That is a general rule of ALL financing. (try to pay more than the minimum payment).
Quote:
Originally Posted by krmb
There's no way, to my knowledge, to cancel the loan, unless the financing institution doesn't agree to it. If that's the case, then I won't be on the hook, but they told me I was approved before I walked into the dealership. .
HOLY CRAP!!! Tell me you didn't leave with the car, without getting the financing all taken care of. If the financing doesn't go through, that doesn't mean the deal is off. IT MEANS they are going to get SOMEONE else to finance you. Then that finance company WILL MAKE YOUR RATE WHATEVER THEY WANT IT TO BE. THAT IS HOW PEOPLE GET SCREWED WITH INTEREST RATES IN THE HIGH 20s.
Quote:
Originally Posted by krmb
I don't understand why I would need anything that covers commercial use; I don't need separate licensing or anything to drive for UBER. My extended warranty covers breakdowns for a specific amount of time or miles, whichever comes first. I JUST bought the extended warranty Saturday, so I should still be able to cancel it, but I'll always have this "what if" looming over my head... Lesson learned, next time I guess I should take a guy with me just in case they smell fresh meat. You know car companies prey on inexperienced females. I thought I was being careful paying cash, but I got tired of things breaking on me.
It probably would have been wiser, though, to pay cash. This is going to be a net loss, most likely. I have to carry full coverage insurance, which means much higher premiums; it almost doubles my cost of owning a vehicle. Really, the insurance is my main gripe. I have to pay nearly $200 per month for full-coverage insurance.
On the other hand, though, what choice did I really have? I needed a better car. The other car was breaking down almost every month, and I couldn't use it to make any money because of the rebuilt title. Lesson learned. I think I should just get used to taking the bus, even though I've tried that before and ended up miserable and sleep deprived, because there was no way for me to keep up with my schedule and actually get enough sleep while using public transportation, and bicycles are out of the question, too. I could literally get run over on these busy streets.
Quote:
Originally Posted by Julian658
You paid 8500 for a car with 98k miles????????????? At 12% interest???????:e ek:
You could have gotten a NEW Chevy Volt 2016 for about 30k minus 7500 tax credit = 22.5 k minus your 500 and trade in.
Assume you have to finance 20k and that you qualify for 0% interest for 60 months or 2.9% for 72 months. You are paying $333 a month or 303 with a 72 month loan.
OTOH, 8k at 48 months 12% interest is 210 a month. However, you are purchasing a 6 year old car that has seen its best days.
Yes this time of the year the deals on 2016 models are about the best they will be. (At least around here), There are plenty of places that will offer a minimum down 3,4, or 5 thousand off new if you can "push, pull, or drag" it in, (it just needs to have been registered and have the buyer be the owner for the last 6 months).
OP, could have gotten a much better interest rate and dragged it for a few more years, (making payments about the same as what they got), with a new car.
I don't know what state you are in, but some states have a "buyers remorse clause" of 3 days 100/500 miles. IMO I would look at returning this thing immediately, especially if you're financing is not finalized, or it sounds like you could be SCREWED!!! tomorrow.
@krmb: if you want to drive for Uber/Lyft, check out the discussion forum on uberpeople.net first. It's similar to city-data. You will need extra insurance to be properly covered. It is not an easy gig, I must warn you.
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That's three or more years of my life and salary wasted on a car loan! The financing terms were for five years, but I'm not planning to pay on it that long.
:e ek:
