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I'm moving from WA to TX this summer and everything seems like it will be much better for me except for one thing...my car. I'd love to get rid of it and fly down to TX, but as it stands right now, I'll have to drive down there just because I'm stuck with the thing.
I filed bankruptcy in 2001, bought a car with a super high interest rate a few months later, and a couple years after that, I'd had another kid (have 6 total), so I traded in my little car for a minivan. I was upside down on the previous loan, so that added about $8K onto the new one. That was in Sept 2004.
Fast forward to now...van is worth probably around $5K trade-in value. I still owe $17K on it, so that's not good. My interest rate is 17.24% and I have 45 payments left @ $519 per month. It's killing me to think about paying that much more for the van, although I realize I'm still paying for the old car too.
I tried to re-fi with one company the other day...it was approved for up to 72 months with an APR of 19.99%. Not going that route for obvious reasons.
Does anyone have any advice on how I can get out of this loan quicker than making another 4 years of payments? If I were able to get a credit card with a lower interest rate, which I'm not sure is even possible, with say a $3K limit, would that help? It seems like it would a little, although I know I'd have to pay more each month because I'd have an extra payment to make. One thing I think I can do if it will help is use my tax refund next year to pay it down some. Should be between $5K and $6K.
Does anyone have any ideas on how to get out of the situation? I've wracked my brain and can't think of anything else, and I'm not sure there is an alternative to sticking with it the way it is. But I thought I'd ask people who are smarter than I about finances before I give up.
LOL, I doubt that I'm smarter about finances but I'm wondering what you'd do in Texas without a car? Were you planning on buying another one here?
It seems to me like you're stuck with the van. Sorry! You don't give any details about it (make, model, year) but unless you could sell it privately for at least $17K (or a bit less and borrow a few thousand from a family member) so you could pay it off and start over with something else, I don't see another way. Paying it off early would improve your credit for auto loans so you could probably get a better interest rate when you went to finance something else, if that's what you want to do.
LOL, I doubt that I'm smarter about finances but I'm wondering what you'd do in Texas without a car? Were you planning on buying another one here?
It seems to me like you're stuck with the van. Sorry! You don't give any details about it (make, model, year) but unless you could sell it privately for at least $17K (or a bit less and borrow a few thousand from a family member) so you could pay it off and start over with something else, I don't see another way. Paying it off early would improve your credit for auto loans so you could probably get a better interest rate when you went to finance something else, if that's what you want to do.
Yeah, I would want to get a new one, but that's just my dream situation...ain't gonna happen. Right now I just want to figure out how I can pay it off sooner. I'd be willing to tack on the amount I'm upside down on like I did last time if I were to get a better car.
As it is, Kelley Blue Book value is only around $5K for it. I recently read somewhere that it has a really bad re-sale value...it's a Kia. Great! It was brand new when I bought it.
Yeah, I would want to get a new one, but that's just my dream situation...ain't gonna happen. Right now I just want to figure out how I can pay it off sooner. I'd be willing to tack on the amount I'm upside down on like I did last time if I were to get a better car.
As it is, Kelley Blue Book value is only around $5K for it. I recently read somewhere that it has a really bad re-sale value...it's a Kia. Great! It was brand new when I bought it.
Oh, man!!!! That's a huge gap!!! I'm so sorry!!!
I really don't think it would be a wise idea to tack that onto the financing of a new car. The cars that don't depreciate quickly would be too pricey for you and if you added that sum to the price of another car that would lose value fast, you'll never get out of the cycle, I'm afraid. Getting the amount owed on the van reduced as quickly as possible should be the priority, even if you have to refinance to make really high payments for a short period of time.
It stinks how much cars depreciate. I had received an inheritance right about the time my last car was biting the dust so I spent a chunk of the inheritance on paying cash for a new, low-end luxury car that held onto its value better. Happily, four years later, the car I paid $22,500 for has a Blue Book value of about $19,000. LOL, even better is that I still love the car and want to keep it for as long as I possibly can!!!
First off, you need to stop borrowing money. You're not very good at it. You're going to do your family a lot of good if you just drive them around in a 20 year old Econoline until you get your debts paid off.
If you keep the van, you're going to pay another $23,000 for it. If you sell it, you're going to owe them probably $12,000 - less if you sell it on the private market. You're still going to owe them $12,000, but I'd rather be working to pay off $12,000 instead of $23,000. You could knock half of that amount off next year when you get your tax refund.
If I were in your shoes, I'd sell the van and get the cheapest one I could find when I get to Texas. I'd avoid getting another car loan, and I'd pay off the remaining balance that I owe the finance company as quickly as possible. You need to stop paying $500 a month in car payments and start putting that money toward your family. In a year or two you're clear and out of the mess. Then you can start saving that $500 a month or whatever toward a nicer car.
If the POS van you buy breaks down, buy another one. Get an old Caprice wagon if you have to. But don't go into debt again - you've already declared bankruptcy once and you're well on the way to doing it again.
First off, you need to stop borrowing money. You're not very good at it. You're going to do your family a lot of good if you just drive them around in a 20 year old Econoline until you get your debts paid off.
If you keep the van, you're going to pay another $23,000 for it. If you sell it, you're going to owe them probably $12,000 - less if you sell it on the private market. You're still going to owe them $12,000, but I'd rather be working to pay off $12,000 instead of $23,000. You could knock half of that amount off next year when you get your tax refund.
If I were in your shoes, I'd sell the van and get the cheapest one I could find when I get to Texas. I'd avoid getting another car loan, and I'd pay off the remaining balance that I owe the finance company as quickly as possible. You need to stop paying $500 a month in car payments and start putting that money toward your family. In a year or two you're clear and out of the mess. Then you can start saving that $500 a month or whatever toward a nicer car.
If the POS van you buy breaks down, buy another one. Get an old Caprice wagon if you have to. But don't go into debt again - you've already declared bankruptcy once and you're well on the way to doing it again.
Ditto on everything Sean said - you are not alone in the US among those who live above their means and end up paying tons more for the same things that people who live within their means. I kow plenty of people in circumstance not unlike your own. I would never borrow money on terms with such ridiculous interest rates - I'd rather get a used car, paid in full, and have one less monthly expense dinging my income. $500/month to drive someone else's car (it's not really 'your' car until you have the title) is not how to get out of the hole you're in.
I hope you get out of the predicament you are in as quickly as possible - I think it is definitely time to cut your losses and abandon ship on that car. Kia's resale value is not a secret - these things can be researched before you buy your next car. If I were to get a new minivan, I would buy an Odyssey (Honda) or a Toyota Sienna - steer clear of the domestics because their resale value tanks.
My Grandfather was in the Auto Business for more than 50 years... He told me a used car was not affordable if the buyer couldn't pay it off in 24 months and 36 months on a new car... every week someone would come in with a late model car owing much more than it was worth and desperately trying to unload it...
OK, so I'm a little offended that you say I'm headed for another bankruptcy. I filed because of a different car and got in ALOT of trouble with payday loans. I haven't touched one of those since and now I have 3 credit cards with a combined limit of only $1400 and I owe $650 on them. That, this car and my student loan is the only debt I have. But I will get over it (being offended ) because...
Your suggestion is the best idea I've heard yet...thanks! Here's something I completely forgot about though...last week I was the victim of a hit and run. My back bumper is torn up a bit, although it's completely cosmetic. I was just going to live with it because I don't want my insurance to get higher. But would that be a problem if I try to sell it? Do I need to risk the increase, pay the $500 deductible and get it fixed?
I don't know the answer to your question. I do know that minivans are very expensive for bumper work, so it might have an effect on resale. Do you have many other claims against your insurance? If this is the first, it might not affect your rate that much if at all. Check with your agent.
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
16,259 posts, read 24,808,589 times
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Quote:
Originally Posted by wannabeaTexan
I'm moving from WA to TX this summer and everything seems like it will be much better for me except for one thing...my car. I'd love to get rid of it and fly down to TX, but as it stands right now, I'll have to drive down there just because I'm stuck with the thing.
I filed bankruptcy in 2001, bought a car with a super high interest rate a few months later, and a couple years after that, I'd had another kid (have 6 total), so I traded in my little car for a minivan. I was upside down on the previous loan, so that added about $8K onto the new one. That was in Sept 2004.
Fast forward to now...van is worth probably around $5K trade-in value. I still owe $17K on it, so that's not good. My interest rate is 17.24% and I have 45 payments left @ $519 per month. It's killing me to think about paying that much more for the van, although I realize I'm still paying for the old car too.
I tried to re-fi with one company the other day...it was approved for up to 72 months with an APR of 19.99%. Not going that route for obvious reasons.
Does anyone have any advice on how I can get out of this loan quicker than making another 4 years of payments? If I were able to get a credit card with a lower interest rate, which I'm not sure is even possible, with say a $3K limit, would that help? It seems like it would a little, although I know I'd have to pay more each month because I'd have an extra payment to make. One thing I think I can do if it will help is use my tax refund next year to pay it down some. Should be between $5K and $6K.
Does anyone have any ideas on how to get out of the situation? I've wracked my brain and can't think of anything else, and I'm not sure there is an alternative to sticking with it the way it is. But I thought I'd ask people who are smarter than I about finances before I give up.
You did not say if you have made your payments on time but if you have and since the bankruptcy was 6 years ago, you should be able to refi the loan at less than 19%. You can always threaten your lender by saying you cannot afford the payments anymore and you might just have to walk away. They don't want that and might give you a lower rate.
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Right now I just want to figure out how I can pay it off sooner. I'd be willing to tack on the amount I'm upside down on like I did last time if I were to get a better car.
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