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What's the Smartest Move


grimlockgrill
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My previous car was in a wreck and was totaled. I was not at fault and the insurance gave me what I due. I didn’t have GAP INS so there was a balance of 3k for me to pay. Through payments I have a little less then half left to pay and the OC offered to do a settlement for less then what’s due. What is the smartest route to take as far as resolving this without it being a sore thumb on my report?:roll:

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What? WHy don't they want it all? Will it take forever for you to pay it off?

I'll bet they want the tax write off (1099C) and may report it as "Settled for less than full amount" which is very damaging to your credit. I'd get an agreement in writing with them if I were you.

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My previous car was in a wreck and was totaled. I was not at fault and the insurance gave me what I due. I didn't have GAP INS so there was a balance of 3k for me to pay. Through payments I have a little less then half left to pay and the OC offered to do a settlement for less then what’s due. What is the smartest route to take as far as resolving this without it being a sore thumb on my report?:roll:

As Big Time said, I don't get it. If you're current on the debt, I'd politely tell the OC no thank you and that you don't see any advantage to doing that--unless it was a used car and the interest rate was a real killer.

I suspect Big Time is also right about the 1099 and settled for less thing. They are probably a little antsy thinking that this is now, in essence, an unsecured debt. No car to repo if you lose your job and fall behind on payments.

Do you have a car now? Are you happy with it? Are you thinking about getting a new one? If the last answer is yes, and the OC is one of the Big 3 (car maker finance companies, not CRAs), and you're favorably inclined to deal with them again, then methinks you have yourself an opportunity.

The OC wants to get rid of their unsecured risk. If you were to buy a new car, ask them to finance both the new car debt AND the remaining amount you owe on the wrecked car in one loan. Use that unsecured debt to bargain for a better rate. Another 1 or 2 interest points lower. Shop around with the other guys. Find the best APR you qualify for now, and you want something better outta your OC. "But I'm going to be taking on a bunch new debt with this car, plus there's the amount I still owe on the wrecked car, so I'm going to need some assistance with the financing to make this happen."

The folks in the dealership may not be able to work this deal for you. You probably will wanna first call the OC, talk to them, and tell 'em you're wanting a new car. Get that thought in their head and make 'em believe it's the thought in your head.

Then again, the guys in the dealership have cars they wanna sell. They are gonna be motivated, and maybe they'll be motivated enough to press the finance company for a really sweet deal.

Something to think about. Just don't back down from also negotiating a good price on the car. Sweet financing could be offset by an overpriced car.

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This is a new one,

Is this reporting as a collection right now?

Ask them how they plan to report to the CRAs if you accept this deal? (and get that in writing.)

I would ask them why they are offering this to you.

Why not find out what they are up to? No harm in that, right.

find out what the 'deal' is and post it here. This group is awesome and will tell you what the right way to go is.

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