Ok heres the deal. I bought a 2008 chevy hhr in november of 2007. This was my first car purchase. I had my girlfriends brother co-sign with me. Here is where i start to run into a problem. I badly needed a car at the time so the best i could get was 18 percent interest, but i stupidily took the deal. I went to carmax and a dodge dealership. I still owe 15,900 on the car however it is only worth 9000 to 10,000 to them for trade in. No one wants to take on all that negative equity. After i bought the car i was taught about how i am paying mostly interest for the first couple of years. I want to get out of this car bad and out of the interest rate even more! Any advice?
I don't think you have many options. Your best bet would probably be to try and refinance, but unfortunately this isn't the best time for it. Even still, it couldn't hurt to try and I would think you could get something better than 18%. You could try to sell the car on your own, you'd definitely get more than a dealership will give you. I think I've heard of some dealerships offering to pay off your loan no matter how much you owe, but I'm sure there is a catch. It wouldn't hurt to look into it though. The last thing I can offer would be to simply pay as much as you can. Are you putting money into a 401k at work? I doubt you're earning 18% on it right now, stop that for now and put that money into the vehicle. How many do you claim on your W-2? If you get a decent amount of money back, $500+, on your tax return you could probably claim 1 more. Doing this would get you a little more money back on each paycheck. Do you owe money on a credit card? Try and sign up for another card that was a 0% 12 month balance transfer, this will allow you to pay the minimum on your card without having to pay the interest, that way you can put more toward the vehicle. In the end you're probably going to have to pay as much as you can each month to reach the break even point as quickly as possible. Good luck! Pugs
yeah i asked some people about refinancing but they said no one will refinance a car with negative equity. especially in my situation. Thanks for the advice though
18 percent interest... because no one is really refinancing negative equity cars during these economic times
If you can't refinance, then I'm thinking your only other options are to try and sell it privately or make extra payments on it...try and pay it off in half the time.
Its a 2008. Make extra payments and drive the car for the next 6 years and you'll come out ahead. At least you dont have to worry about major mechanic problems. You took 18% on a car that depreciates by at least 15% once you drive off? man
Gap insurance... are you still eligible for it? Actually... trading into a leasing agency may work for you.
Look for cars with relatively large rebates. You may be able to find something you like better that has some decent rebate deals going on that will take care of a good bit of that negative equity (when I bought my Mazda 6, it had $3,500 in factory rebates). There's also a chance you could get a better deal come the end of summer when the 2010s come out. You might find some left-over 2009 models the dealership is really keen to get rid of. Even though your HHR would likely be worth a little bit less, too, it probably won't be that much of a difference. I do get the desire to want to be out from under an 18% interest rate, but you'll always be boned trying to sell an 18 month old car.
I'm not trying to be mean, but I'm still trying to figure out who gets the bigger facepalm. The guy who bought the brand new Lexus and can't afford to eat, or this guy who badly needed a car and decided to go brand new with 18% interest rate. Geez, you guys should listen to Dave Ramsey or something.
Dave would say sell it for whatever you can get and get a cheap used car, like a little honda or something.
hey mr. brightside, I bought the car before I got slammed with child support and a 12k cut in my salary alright thanks for the great insight though
anyways rocket guy, I was 18 when I bought my first car but I am really good with math so when they told me 13% financing, I went and looked for a cosigner with really good credit I have traded in 2 cars total now and lost about almost 8K in doing so. Try to sell the car and if that does not work out. Double your payments each month. Good luck buddy
If you're going to end up negative on the car, you need to just hold on to it and increase your payments as much as you are able until you can trade it in for okay value. Not to sound like your dad or anything, but you probably need to chalk this up to a life lesson. Evan
Many dealerships are looking to move inventory right now. Assume they have a car with an MSRP of $25,000. In order to sell that car, they may offer it at $21,000. To get to that number they may simply offer you more than your car is worth (essentially pay off your loan). To you the car will still cost $25,000, but you will have gotten rid of your 18% albatross. Also, prior to shopping around, check with other companies for their interest rates so you have some ammunition when discussing financing. The dealership finance guys make money on their loans. They may start off at 14% for a 6% loan. Most of what they get over 6% is commission to them. See if your insurance company has a lending program. Check with your bank or credit union. Whatever you do, be prepared to walk out if the financing is not decent. Folks with good credit should be able to get 5% or so without any sort of special financing deals on new vehicles.
I'd go with the girlfriends brother who co-signed.... Your best bet is to ATTACK that loan HARD until you get to the point where the equity = blue book value, then trade it in for a used car. In the mean time, I'm sure you can refinance for better than 18%. Try E Loan. They will give you 4 different offers and you can pick which one is best for you. I did that a month after I bought my new car back in 06. I ended up getting 4% lower than what the dealership gave me. Good luck. BTW, I will NEVER buy a new car again. EVAR! Just a horrible investment (unless you pay cash).
First Mistake - 2008 chevy hhr Second Mistake - girlfriends brother co-sign Third Mistake - 18 percent interest (You must have horrible credit) - if you needed one so "badly" why get an 08? Fourth Mistake - After i bought the car i was taught about how i am paying mostly interest (When making a huge purchase, you should always be informed, man I feel bad for you when it comes to buying a home) At this point I would say keep the car if the warranty is still good for another 3 yrs. or 70,000 miles. If not trade it ASAP, I just recently purchased a 06' Honda Accord w/ 20,000 miles and I purchase a bumper to bumper gold warranty financed and eveything for 15,000. You can get a great deal if you look Since you are in desperate need of a car at the moment, take your time and look around, see what you can find. I dont necessarily believe that only imports will last you long, it all depends on how you handle your car. With that said I would look for a decent priced vehicle, I dunno maybe a Sentra, Civic, Cobalt... It all depends on what you're interested, If all else fails - if it has been at least 6 months since you have made the purchase and you have been good on all payments - You should refinance the vehicle under your name and that way it will show a paid vehicle under your name and you GF's Bro. Everyone wins, I am sure your interest wait will go down By the way you shouldnt be getting such a high interest rate on a new vehicle, especially not on a new vehicle, that is more common for used.
I believe it was something like 10 or 11. I got a real good deal on the price, so after I agreed on it with the sales guy, I let my guard down when I went to Financing. Big mistake. The Financing office is where they get you, not the showroom.
