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Any bad credit problems will drop off within 7 years or so.
Not necessarily. The unpaid credit, assuming >$1000 will recycle. After 3-5 years, debt collector #1 will simply sell to DC#2 who sells to #3 & it simply rejuvenates the debt after each transfer. It may be dependent upon what state of which you're a resident.
If you want to save some big bucks, you want luxury, dependability & cheap? Find yourself a 2008-2011 Mercury Marquis or Lincoln Town Car with 100-150K on the odometer (preferably the Town Car L for a better ride. You can drive this car for 200K miles, get 16-25 mpg, pay for synthetic oil changes and buy tires as the major expenses you'll deal with.
Last edited by missielgp; 11-12-2019 at 09:07 PM..
I have a cousin of mine asking me for advice who is upside down on his vehicle.
He owes $19k and Blue Book value is half that.
Car is 4 years old with 100k miles on it and he has terrible credit to boot hence a high interest rate and a large monthly payment.
Any suggestions?
I was in this situation several years ago.
Back in 2013, I had a 2005 Murano that was becoming more of a money pit than it was worth, and left me stranded once on a trip from Tennessee to Iowa. When I finally got moved back to Tennessee, the car started giving transmission problems.
Between the low trade-in value for that car and some negative equity from the Murano's loan, I ended up somewhere between $7k-$9k underwater on the Hyundai I bought.
The thing is that the high minimum car payments crowd out making extra payments toward the principal. If your income is cut, those high payments become a major burden. You could go through most of the life of the loan making those high payments, something happens say on year 5 of six year loan, then the car gets repossessed and you have all those sunk costs and nothing to show for it.
The only way "out" is "through." You just have to keep paying on it, and it will likely be several years before it's cleaned up enough to do something about it. Aside from a windfall of income to clean up the negative equity or a big increase in income to pay more against the principal, there's not much you can do.
Back in 2013, I had a 2005 Murano that was becoming more of a money pit than it was worth, and left me stranded once on a trip from Tennessee to Iowa. When I finally got moved back to Tennessee, the car started giving transmission problems.
Between the low trade-in value for that car and some negative equity from the Murano's loan, I ended up somewhere between $7k-$9k underwater on the Hyundai I bought.
The thing is that the high minimum car payments crowd out making extra payments toward the principal. If your income is cut, those high payments become a major burden. You could go through most of the life of the loan making those high payments, something happens say on year 5 of six year loan, then the car gets repossessed and you have all those sunk costs and nothing to show for it.
The only way "out" is "through." You just have to keep paying on it, and it will likely be several years before it's cleaned up enough to do something about it. Aside from a windfall of income to clean up the negative equity or a big increase in income to pay more against the principal, there's not much you can do.
I'm in a similar situation right now, truck transmission finally gave out, not worth the cost of repair, still owe a couple thousand. It's not much, so I thought about rolling it over into a loan for another used car. Dealership tried to make a deal that included the balance being paid off at a much higher interest rate than the original loan is for. I walked away wondering if they actually have many people who are desperate enough or stupid enough to actually fall for that. To be fair though I may have had to do just that if I hadn't had some better options available to me.
I'm in a similar situation right now, truck transmission finally gave out, not worth the cost of repair, still owe a couple thousand. It's not much, so I thought about rolling it over into a loan for another used car. Dealership tried to make a deal that included the balance being paid off at a much higher interest rate than the original loan is for. I walked away wondering if they actually have many people who are desperate enough or stupid enough to actually fall for that. To be fair though I may have had to do just that if I hadn't had some better options available to me.
I would go up to the Bristol Carmax and look for something gently used and economical. The problem is that once you're on that negative equity track, it's difficult to get off. You kind of have to hope that the car lasts until the loan is paid off. If the car starts giving a lot of problems, it's easy to talk yourself into trading, then you can end up with a really bloated loan.
I sold that Hyundai to Carmax. I'd never consider a dealer for a used car again.
I would go up to the Bristol Carmax and look for something gently used and economical. The problem is that once you're on that negative equity track, it's difficult to get off. You kind of have to hope that the car lasts until the loan is paid off. If the car starts giving a lot of problems, it's easy to talk yourself into trading, then you can end up with a really bloated loan.
I sold that Hyundai to Carmax. I'd never consider a dealer for a used car again.
Decided to go with a cheap beater from an individual. Even if I only get a couple years out of it I figure it's better than digging myself into a deeper hole by having two loans or a single loan with a crazy interest rate on the negative equity. When the truck is paid off I'll revisit the idea of something a little nicer, never new though, never saw the point of that.
Not necessarily. The unpaid credit, assuming >$1000 will recycle. After 3-5 years, debt collector #1 will simply sell to DC#2 who sells to #3 & it simply rejuvenates the debt after each transfer. It may be dependent upon what state of which you're a resident.
The thing is, they actual "Blackmark" will disappear after 7 years. While the credit buyers may hound you, they cannot collect a dime unless you agree to it.
I know I walked away from 30K of debt and after 7 years the banks and collections gave up. Then the debt buyers came after me, and while it took 3 years for them to finally quit, they did quit.
The best thing I can tell anyone who is thinking of walking away from debt is to make sure they can survive the next 8-10 years paying cash for darn near everything.
Not necessarily. The unpaid credit, assuming >$1000 will recycle. After 3-5 years, debt collector #1 will simply sell to DC#2 who sells to #3 & it simply rejuvenates the debt after each transfer. It may be dependent upon what state of which you're a resident.
The credit ding starts ticking from date of last activity. Once the event happens, say the banks charges off the account and sends to collections or seeks a judgement, that is the final date for the event. Thus this event will fall off around 7 years later.
If Credit company A sells the debt to B they can not refresh the time limit.
The only way they can refresh the time limit is if you make a payment on the amount owned. This resets the clock and can then be reported.
I'm in a similar situation right now, truck transmission finally gave out, not worth the cost of repair, still owe a couple thousand. It's not much, so I thought about rolling it over into a loan for another used car. Dealership tried to make a deal that included the balance being paid off at a much higher interest rate than the original loan is for. I walked away wondering if they actually have many people who are desperate enough or stupid enough to actually fall for that. To be fair though I may have had to do just that if I hadn't had some better options available to me.
So what if the truck isn't worth the cost of the repair? Fix it and drive it until it's paid for. Still cheaper than rolling the negative equity into a new loan. To me, spending $2k on repairs vs buying a new to me vehicle for more, just makes sense.
So what if the truck isn't worth the cost of the repair? Fix it and drive it until it's paid for. Still cheaper than rolling the negative equity into a new loan. To me, spending $2k on repairs vs buying a new to me vehicle for more, just makes sense.
It really depends on your stomach for this stuff.
My grandfather died in 2009, and I was left his 1991 S-10. This was the top of the line trim at the time - extended cab, air conditioning, sliding back window, etc. However, the truck was rarely driven from maybe 2003 or so on. It needed a lot of expensive work to get to where it might be reliable - even then, it was no guarantee. You could spend $3,000 in work on a car worth $2,000, then you might need another $1,000 - $2,000 of work six months or a year down the line.
The convenient thing is to get rid of the problem car.
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