Home > Auto Loans >Bad Credit Car Loans > Bad Credit Car Loan: Ever Tried To Get Out Of An Upside Down Car?
Bad Credit Car Loan: Ever Tried To Get Out Of An Upside Down Car? |
|
Patty had bad credit a few years back when she needed a van. Having availed a bad credit car loan, her intention was also to restore her credit. However she was overcharged for the van and now she owes $16,000 while the van isn't worth more than $8,000. She was prepared to alert the public on the ills of dealerships for those with credit problems but neither does she take pride in being cheated. Many others also have to pay more than their vehicle is worth owing to having availed a bad credit car loan. Money Magazine surveyed almost 30% of new car shoppers drowning in their on-going bad credit car loans. Now Patty has to find out what her options are, apart from avoiding similar situations in the future. Legally speaking Patty has very few options. She can check with State Consumer Affairs office for a legal recourse, if any. The reality is that she might as well make use of the van until the payoff approaches the value of the van. Selling the van will not help in making payments on her bad credit car loan as she's already finding it difficult. Once she sells the van, she still owes $8,000 to the lender. Nor would a different car be of any more help. She'll owe more on the new car than its value. Meaning she's going to be upside down in that car as well. Thus she can't solve her problem unless she goes in for a car worth a lot less than her van. In her situation, her best bet for getting out from under an upside down bad credit car loan is to keep the car as long as possible. The longer she makes use of it, the closer the value of the van to the amount owed. If she still has it when the loan is paid off, she finally owns more than she owes. She has the option of refinancing to lower payments. Prior to going shopping for a new bad credit car loan, she needs to find out if she can pay off the existing loan early and whether an early payoff is penalized. The lender should also be asked about renegotiations on the bad credit car loan. If she is able to pay off early, she needs to find out the interest on her current loan to shop for a cheaper rate or longer loan. A copy of your credit report will help when you start shopping. Let potential lenders view the report but all of them should not request your credit score, as it would lower it. The last option should be repossession of the van. It would be sold at an auction with the sale price unable to cover the debt amount. The difference will still be owed by Patty. Car deals can be very complex. Understanding is made easier by breaking the figures down. There are actually three transactions involved. First, the vehicle purchase, second a financing package i.e. bad credit car loan. Thirdly, the trade-in or car sale. Patty may not have overpaid as much as she feels. The car lot could have given her better interest rate but charged higher for the car. Without separate negotiation of the van price and financing, it's difficult to say. With bad credit, the need for a car puts you at disadvantage. The worst option for getting a new car is by walking into a car lot. Financing should have been the first priority for Patty. On locating a bad credit car loan from a reliable source, inquire about the price of the car of your choice and the value of the trade-in. Many magazines and websites carry listings of new and used car rates. Finally never commit to financing that is longer than the period you will own it. Long-term bad credit car loan is all the more likely to put you upside down in the loan. |
|
| ------------------------ |
|---|
|
|
| ------------------------ |
|---|
|
|
|
|
| ------------------------ |
|---|
|
| ------------------------ |
|---|
Custom Search
|
| ------------------------ |
|---|
|
|
| ------------------------ |
|---|
Consumer Alerts | About | Bookmark Us | Contact | Espanol | Privacy Statement | Copyright | Terms & Conditions | Financial Widgets | SiteMap
Copyright © 2006 Credit Loan, LLC. 235 APOLLO BEACH BLVD, STE 218 Apollo Beach, Florida 33572 All rights reserved.
Disclaimer: The content provided on CreditLoan.com is for informational purposes only; do not make any financial decisions based on its content. Financial decisions are personal, based on an individual's situation. Consult with a financial professional before making any financial decisions. CreditLoan.com is not liable for your financial actions.
