"average user" (avgusr)
01/09/2018 at 09:53 • Filed to: None
0
11|
"average user" (avgusr)
01/09/2018 at 09:53 • Filed to: None | 0
| 11 |
A Nice Camaro for your trouble. I am trying to give my friend some sound advice.
So my friend who is a little naive and a bit stupid got himself into a car financing pickle.
He drives a base 2017 Camaro. He got into an accident recently and while the car has been repaired (just some body damage), his insurance spiked (not his first accident on record, first for the car) and the stupid finance terms has got him into a bigger hole than he should. He is trying to dig himself out, but since i don’t finance cars, I don’t know what to tell him.He can sell/trade this in and get a used car, but his financing would likely be upside down. He can keep the car, but the payments (financing and insurance) would probably make it hard for him to afford.
Anyone with suggestions would be greatly appreciated.
Supreme Chancellor and Glorious Leader SaveTheIntegras
> average user
01/09/2018 at 10:00 |
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Best advice is to NOT roll it into another car.
Take out a personal loan if possible and pay off the car
bob and john
> average user
01/09/2018 at 10:02 |
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look into a line of credit that has a lower intrest then the financing.
other option: sell the car, buy a 3-5K beater, pay off loan or whatever is left, work back to where he wants to be
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average user
> Supreme Chancellor and Glorious Leader SaveTheIntegras
01/09/2018 at 10:04 |
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Thanks for the idea. Not sure if he can pull it off with his debts but he just might. He is looking at used mercedes, but i told him unless he LIKES having his car broken he should just settle for an Acura or Lexus.
Textured Soy Protein
> average user
01/09/2018 at 10:08 |
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The only way to come out ahead with a different car is if he gets something significantly cheaper where he can pay off the negative equity and have much lower payments going forward.
Has he looked into refinancing the loan on the Camaro?
Ash78, voting early and often
> average user
01/09/2018 at 10:09 |
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1. KEEP THE CAR at all costs. Getting out might have a very short term gain, but is a long term loser.
2. Find a credit union — they will often refi anything under 3 years old using new car financing terms.
3. Shop around for better insurance.
All pretty obvious...I hope!
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Supreme Chancellor and Glorious Leader SaveTheIntegras
> average user
01/09/2018 at 10:11 |
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Did he check with like a credit union to refinance the car?
Arrivederci
> average user
01/09/2018 at 10:20 |
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On the used market the gap isn’t as wide, but for someone in a financial pickle, he shouldn’t be looking at Acura or Lexus, but Honda and Toyota instead.
Nothing
> average user
01/09/2018 at 10:28 |
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Depends on how upside down. A couple grand, get out of that and into a used car. $6k, 7k? Well, he’s stuck. Rolling a significant amount of negative equity into a used vehicle isn’t really an option at all.
Yes, negative equity sucks but so would a potential repo down the road if he is finding it difficult to maintain the current financing situation. Losing money sucks, but sometimes it’s what needs to be done. Having a few 30 day lates on a credit report is also painful to deal with.
As far as replacement vehicles, this is where they need to consider something reliable, durable, and inexpensive to maintain.
merged-5876237249235911857-hrw8uc
> average user
01/09/2018 at 14:32 |
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Also, is your friend able to cut out other costs? Like cable, internet? Eating out a lot? You know the basics? My wife and I were on a strict budget for the first two years of marriage. No cable, eat out as little as possible. No new big toys. Hell, I had an allowance for myself as well. But it all paid off and most of the debt we were paying down was mine anyway. Adulting is hard sometimes. And yeah, don’t roll the negative on to another car. I did that and it just meant I didn’t pay off my first car until I paid off my second. I’ll bet your friend can find somewhere to cut costs. And yeah, look at different insurance or raising the deductible if possible, but that’s risky too. I was able to refi with a CU as well once I purchased my second vehicle to cover the costs of the first one, and the terms were much much better. Saved a bunch.
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average user
> merged-5876237249235911857-hrw8uc
01/09/2018 at 14:37 |
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Trust me i plan to have that conversation with him tonight. I enjoy his friendship, but while i am willing to admit i know every littel about this stuff, he is very naive for trusting his dealer and getting a bum deal for his car. Add to his “champagne taste with beer budget” lifestyle, he is going to have to face a severe markdown with the way he lives.
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merged-5876237249235911857-hrw8uc
> average user
01/09/2018 at 15:01 |
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Yeah, been there, done that. But remind them that hopefully it’s temporary. A little pain now will pay off big later on. I’ve been married now for 10+ years, and after that first two of being tight with our budget, we now live very comfortably, but it was a struggle for a short time. But well worth it. Hopefully your friend will see the long view and do the hard work now. Good luck.