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Need help quick before something dumb


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Okay sorry the time rush, but here is where I am at. My current auto loan I owe 14750.00 with citi. and 24% interest. Roughly 75 is going to the principle and 310. to the interest, for 5 1/2 more years. I have 67K miles and no warranty.

The Kia dealer has offered me through Cap one 12.95 for 72 mnths a Kia Sportage 2006 new. with 2K rebate. Out the door tax.tag and negative equity 25K. Payments at 500 per month. 10yr/100K warranty.

Insurance not a factor since it is the same. Already called. I checked with 7 dealers, they all laughed me out of the lot, b/c they said I had 6K in negative equity.

I am SO SCARED. my pay is going up up up, every 6 mnths I get 1.50 raise till I top in 2 years. I know I can make the payment, I just dont want to dig myself any deeper in this mess. I plan on keeping the vehicle forever :)

What is the wise thing to do? Stick with the Honda? I mean they are good cars too, and just suck it up and pay it off? My pymt. is 389. Or do the Kia thing... I dont want to make the wrong decision, and I am really scared, b/c I have never owned a "new vehicle" before and frankly the thought of 25K scares the beggess outta me....

the dealer wants me to come down at lunch...

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Try to refinance your vehicle.

If Cap1 gave you that good a rate for a new car, maybe they'll give you a good rate (it'll be at least 2 or 3 points higher) on your existing used car.

What's your current score range? Do you have CCs at better than 24% that you could put the shortfall on?

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On a slight tangent, this is always how I look at car loans. Figure out what you can afford to pay each month. From there, figure out how much car you can afford with that monthly payment for 48 months.

Term and interest are the most important things, but you have to figure out what you can afford and work backwards. Don't pay on a car loan for more than 48 months. Sure, a car dealer can get you just about any monthly payment... over 72-84 months at 20% APR.

So, for instance, say you can afford $350 a month on a car loan. That means at 10% APR, you could afford a $14k loan ($355 monthly payments).

At 6% APR, you could afford a $15k loan.

Sure, you can afford an $18k loan over 84 months with a 15% APR, but you'll pay over twice what the car is worth before it's all paid off, and if anything happens down the line you'll have so much negative equity it will be ridiculous. No one wants to get stuck paying on a car loan on a car they no longer have.

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LOL, I would stick with the honda however you can simply because they are 10 times the car of a Kia. I bought a Kia because I could not get a Honda. The Honda will last several, several years while the Kia, being relativly new to the market, are having all kinds of problems with their vehicles. But they are getting better and are pretty nice vehicles.

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