Roadloans or others?

[hopinglikecrazy]

I started working on credit repair last Sept. My scores have went from 462 to 603 with TU and 499 EQ to 594 (FICO). I was planning on a few more months of rebuilding before trying for a car but my van died. 2000 in repairs. I can't STAND the thought of putting that into a 1996 old thing and would rather put into a new car. I did lending tree and got an immediate response from Roadloans for 21% interest and 21k. Is that the best I will get with thsoe scores? And if i do it and continue to build, what should my scores be to try to refinance?

Thanks!

[Flyingifr]

In the current credit environment and with your scores you were lucky to get that.

[looksbothways]

Buy a used car for $2,000 (I'm assuming you actually have that money, since you said you'd rather put it into a new car) Then put the $550 a month "car payment" into a savings account.

You'll be building a nice security net AND in only 12 months time you'll have over $6,000 to put down in cash on a newer car. If you just drive the $2,000 car until it dies, depending on your luck (I've driven my $3,500 car for 2.5 years and no sign of death yet), you could have all you need to buy a brand new car in cash.

Financing a rapidly depreciating asset at 21% interest is just financial lunacy, I don't care how you try to rationalize it. If you shop around and take your time, you can get a 6-10 year old used car that will serve you fine for several years with only minimal repair and upkeep.

[Denita]

Buy a used car for $2,000 (I'm assuming you actually have that money, since you said you'd rather put it into a new car) Then put the $550 a month "car payment" into a savings account.

You'll be building a nice security net AND in only 12 months time you'll have over $6,000 to put down in cash on a newer car. If you just drive the $2,000 car until it dies, depending on your luck (I've driven my $3,500 car for 2.5 years and no sign of death yet), you could have all you need to buy a brand new car in cash.

Financing a rapidly depreciating asset at 21% interest is just financial lunacy, I don't care how you try to rationalize it. If you shop around and take your time, you can get a 6-10 year old used car that will serve you fine for several years with only minimal repair and upkeep.

This is the best advise! If you want to improve your scores - do it other ways then high interest, legal loan sharking on vehicle debt! Go to rip off reports and check out Drive Time or Road Loans - stay away from these companies. Learn to buy all of your future vehicles cash just the way lookbothways has shown you. Good luck!

[jq26]

As I've posted at least twenty times before, I bought a beater in 2004 (a 1997 Honda Civic with 135k miles on it) for $3000 cash. The plan was to keep it for a year while I financially recover. I quickly realized that driving this car was savings me hundreds every month- I calculated that it saved me about $900/month as compared to the Ford Explorer I drove previous to the Honda when you factor in fuel, insurance, maintenance and obviously no payment. A few years later, and completely because of the low vehicle costs, I saved enough to buy a new car with cash. Suddenly I didn't want a new car anymore. Parting ways with that much cash just for a set of wheels is silly when I have a nice car that gets me around.

I still drive the Honda today. It is quiet, efficient, and in great shape at 236,000 miles. It was the single best financial move I have ever made.

My point is that anyone who finances a car at 21% needs their head examined. If you can't at least put down a substantial down payment and get 0-5% financing for the remainder, then buy a beater until you can.

[creditreformer]

I would do as the others suggested: buy a low priced use car now- assuming you can find 1 w/fairly low mileage, good mpg, + in good condition (harder than you think, at least in my experience)- or if you can wait, consider what I’ve done. Sometimes, what may seem like a REALLY great deal is really a $ pit w/undisclosed problems that may cost you more in the long run. Sometimes, buying in a RUSH means you may overlook things + may end up buying a 100k+ mile car that really should’ve RIP’ed long ago. While a $2-3k car may solve your problem RIGHT NOW, it may also cause you more problems (+ $$$$), so tread cautiously. After spending the past 2 mos. looking for a ‘beater,’ I’ve found that most $2-3k cars have had the ish run out of them, have NOT been well-maintained, have been raced, have had the engine/trans replaced, have salvage title, won’t pass smog, have defects like oil leaks, have had multiple owners (which means the seller knows VERY little about the car’s history), have been in wrecks, etc. There’s often a reason BESIDES high mileage why cars are $1-3k + that reason is often buyer beware. Sure, I could’ve chosen a beater for a ‘quick fix,’ but I likely would’ve been in the market for another car ASAP +/or been spending $ on someone else’s ‘$ pit.’

It also depends how you are driving + how long you plan to keep the car- and of course what type of car it is. For example, I drive A LOT, especially HIGHWAY miles, so need a reliable car + do NOT want to replace one every 1-2 years. I kept my current car for 12 yrs- it is pretty much DEAD + repairs (trans, transaxles, timing belt, oil leak, on + on) cost WAY more than what the car is worth. So what I’ve done is:

Save a decent downpayment- 2.6k as of today- going to be $4-5k by the end of this mo.

List my car on craigslist- have some offers + may take 1 soon- that $ (another $1-3k estimated) will go to a downpayment

I am looking @ another Honda accord- 2005-2007. I chose that year range b/c it seems like anything older means HIGH mileage (esp. HIGHWAY miles as I live in Calif) + problems (ex., A LOT of Hondas here have been used as racers + had the trans/engine replaced) that I don’t want to deal w/. By putting $6-8k down, I am hoping to finance a minimal amount ($3-7k). While I won’t be able to pay for the car in cash, by waiting + NOT jumping on the first (or first 20) car I saw, I feel like I am putting myself in a better position financially AND still will be able to find another car I can own for 10+ yrs like I did my current car.

[hopinglikecrazy]

Here is the deal. I bought this vehicle in Oct 2007. It appeared to be a really good deal. I did have it checked by 2 mechanics who thought the same. $3500. I've had it 17 months. I've paid over 2k on repairs already. I had to buy new tires at $400 a couple of months ago. So I'm in the hole on this 1996 vehicle now $5900 for 17 months of use. THAT is CRAZY to me. CRAZY. That averages almost $350 per month. I would MUCH have driven a nice vehicle at 21% than paid that for this hunk of crap that now needs another $2000 in repairs to work. At least had I been paying 21% interest, I may have had something worth something at the end. I'm $5900 in the hole for something that I can't sell for $500.

I need something that can carry 7 passenger and finding that, reliable for 2k is just not happening.

Call me crazy.. at times you just have to do it. If I were in a situation where money was tight. Where I couldn't afford this, maybe I'd sit still more but I'm not. I KNOW I can make the payment. I also know I'm on the right road out of this mess and if paying 21% interest for a couple of years is what I need to do to help balance out the effects from my divorce than so be it. To me, it is part of the price of my divorce and at this point.. I want it in the past. Paying for 2 yrs, on time, will help my credit even if it will cost me a ****load. That doesn't mean I'll go for a 20k vehicle but I'm done with the 2k pieces of **** that just require a bunch of upkeep and really haven't saved me a dime in the long run.

[matthewscott]

I need something that can carry 7 passenger and finding that, reliable for 2k is just not happening.

Understandable, however, I would encourage you to look around some more. Have you checked into your local bank or at a credit union for financing?

There just has to be a better alternative that will meet your needs and be more financially responsible.

Good luck and keep us updated.

[looksbothways]

If you finance a brand new car, it won't be 21% for a "couple of years" it'll be 21% for 5-6 years.

I still stand by my statement that you can find a reliable used car for $2,000 and even way under that. I've done it, over and over. They're not pretty, they may have quirks (my Aries stalled at stop lights on occasion), but they get you back and forth.

With that said, I second the above poster's recommendation to look around. Also, finance as absolutely little as you have to and check out these articles before you go to buy:

http://www.edmunds.com/advice/buying/articles/42962/article.html

http://www.edmunds.com/advice/buying/articles/78386/article.html

[zfire]

I guess I'm the oddball here. I'd go for it.

A loan with Roadloans doesn't have to be forever.

Credit gets better the car can be traded for another with lower interest rates.

But that doesn't mean you have to buy a 21k priced car.

[Denita]

21% is huge. A loan for 5 years is 60 months. 60 months on a car is forever.

You are locked in - refinancing a car is extremely difficult because you have an "asset" (term used loosely) that is depreciating at a much faster rate than you are retiring the debt. That means you always owe more than the vehicle is worth.

One of the worst things that have happened over the past 10 to 15 yrs is this constant need to 'upgrade' vehicles for no reason other than status. We are pounded by the status ads constantly. When in reality, there is no justifiable reason to pour $$$ into a car/truck/suv - we pay more for our vehicles now than we used to pay for homes with land!

OK off soap box. Guess you can tell I'm a new convert since my Ch 7. Just trying to save you some of the heart break that I have been through due to my foolish moves a few years ago. BTW, I recently gave up my car in the BK (surrendered) and bought a USED SUV in Jan 2009 that seats 7, looks great, runs great and cost me $6999 with tax, tag, title etc etc. Yes it is a 2002. Do I expect it to last forever? No, but it will get me thru the next few of years at least. I have 12 more payments at $265 and then its mine. You would be amazed at what is out there now. I had to pay a higher rate because my BK was just discharged one day before I bought it. But, the big thing is, it is a short term loan that is affordable to me. I really will have it paid off in the next 6 months.

[cap1kid]

If you need something for 7 passengers, I am assuming you'll be toting kids around? I'm not keen on $2,000 cars with precious cargo- even if the only problem is the occasional stall at a red light. I would recommend you seriously consider a Kia Sedona- or Hyundai Entourage - you should be able to snag a base model for under $16,000. You don't need any of the options- they are well equipped. Just make sure going into it you can afford the monthly payments at the 21% rate. Negotiate hard- tell them you have financing- DO NOT LET THEM (the dealer) RUN A CREDIT CHECK- do not let them know you have Roadloans (they will know your subprime) you can imply you used a CU.

After the price is negotiated you may want to let them see if they can beat the financing. It's a buyers market right now, and in 6 months or a year you can always refinance. Just keep working on repair in the meantime.

[jetscarbie]

I guess I'm the oddball here. I'd go for it.

A loan with Roadloans doesn't have to be forever.

Credit gets better the car can be traded for another with lower interest rates.

But that doesn't mean you have to buy a 21k priced car.

I agree.

[looksbothways]

If you need something for 7 passengers, I am assuming you'll be toting kids around? I'm not keen on $2,000 cars with precious cargo- even if the only problem is the occasional stall at a red light. I would recommend you seriously consider a Kia Sedona- or Hyundai Entourage - you should be able to snag a base model for under $16,000. You don't need any of the options- they are well equipped. Just make sure going into it you can afford the monthly payments at the 21% rate. Negotiate hard- tell them you have financing- DO NOT LET THEM (the dealer) RUN A CREDIT CHECK- do not let them know you have Roadloans (they will know your subprime) you can imply you used a CU.

After the price is negotiated you may want to let them see if they can beat the financing. It's a buyers market right now, and in 6 months or a year you can always refinance. Just keep working on repair in the meantime.

I drive my kids in my junkers. I don't think stalling at a red light is so dangerous that I couldn't have my kids in the car. It's not like the car caught fire at red lights. That's not to say I'm not prepared for a breakdown. I have AAA, a cell phone, and a well stocked emergency kit. Driving kids around doesn't mean you need a new car.

The whole stance that you can "always refinance" is erroneous, and is part of the same line of thinking that got people into "creative" mortgages they couldn't afford after a year or two. You can't always count on being able to refinance, especially on a car loan, and especially in this credit environment. Don't ever enter into a loan that you aren't confident you can pay off to the end, as-is. Doing otherwise is just foolish. Sure, maybe it will work out and you can refinance, but life has a way of altering even the best laid plans. That's why emergency funds are so crucial.

An average new car retains only 35% of it's value after 5 years, and loses 30% of it's value in the first twelve months alone.

If you shop smart when buying the used car to start with, you can get years and years out of a car that only costs you a couple thousand. You don't have the pressure of a car payment, you're not locked into a loan. Maybe I'm just crazy, but I'd rather have financial security and an iffy car than a brand new car and financial risk.

[docniss]

The OP is determined to go out and buy a new car. She has already said she doesn't care about the 21% interest. She has it all figured out. So did all those people in CA, AZ, NV and FL that were offering above the asking price on houses just a few short years ago. Now this country is in financial crisis.

I am trying to learn for myself that just because I want something does not mean I need to get it. If we want something bad enough we can come up with all kinds of reasons as to how it will work out in our favor. Facts are there are millions of people in foreclosure because their rational was the market will keep going up...well the real estate market drove into a brick wall and disintegrated. We should all be learning from this. I know that often times advice falls on deaf's ears. There is something about our human nature that requires us to fail in order to learn. I think if we could all learn from others mistakes, then by this time we would have all learned from all mistakes made and we would all be successful.

I would not pay 21% on vehicle. But I bet the OP has a car by days end.

[jq26]

I'm not keen on $2,000 cars with precious cargo- even if the only problem is the occasional stall at a red light.

I don't know...my kid certainly doesn't mind. And there is no stalling at red lights or mechanical issues because it is well-maintained.

Certainly the looks of my car could be better. But somehow I think my kid would prefer me to continue to transfer a few thousand per year into his 529 plan than to shuffle him around in a new car.

[Magdalen77]

I just recently (February) bought a new(er) car. I was so paranoid about my credit and hearing that even people with perfect credit were having a hard time with getting car loans (at least used car loans) that I went to a buy here/pay here/your job's your credit kind of place. I still have a repo on my record, so I wasn't sure about how they'd look at me. They told me my credit was too good.

(I might have just sounded too smart. They were trying to sell some lady a '96 Ford Taurus for $7,000. I overheard that and told the salesman that a '96 Taurus was worth half that)

In any case, I went to another dealer and I got a 2007 Dodge Caliber (sorry, I'm a Chrysler girl). I ended up with a 8% interest rate. They tried to give me 10%, but I left and the next day they called and offered me 8%. I probably could have gotten a little lower interest rate, but I didn't feel like dickering anymore.

[hopinglikecrazy]

Understandable, however, I would encourage you to look around some more. Have you checked into your local bank or at a credit union for financing?

There just has to be a better alternative that will meet your needs and be more financially responsible.

Good luck and keep us updated.

Hi there and thanks. I did look around. For the person who made the snide comment 'the op will have a car by the end of the day'.. lol. I finally did get a vehicle just yesterday. I DID look around a lot. I DID think long and hard. I was NOT just reckless as many implied. The thing is people.. just because we are on this group does not mean we all were just careless and reckless and made stupid choices. Some of us were 100% responsible and something in life just happened for a short time but had long term consequences.

I'm not even going to continue on to even attempt to explain.. some will stay on their soapbox.

I did get a new vehicle.. well 2005.. not NEW although I COULD have. My interest rate was not 21% and I did not use the Roadloans. If people read the first post I put that I was approved for this but with the credit scores I had, did anyone know what was being offered these days. Someone wrote they were suprised I even got that with 600 FICOS.. WRONG. I got 10%.. not the best but way better than I hoped for.

[Goalie]

Hi there and thanks. I did look around. For the person who made the snide comment 'the op will have a car by the end of the day'.. lol. I finally did get a vehicle just yesterday. I DID look around a lot. I DID think long and hard. I was NOT just reckless as many implied. The thing is people.. just because we are on this group does not mean we all were just careless and reckless and made stupid choices. Some of us were 100% responsible and something in life just happened for a short time but had long term consequences.

I'm not even going to continue on to even attempt to explain.. some will stay on their soapbox.

I did get a new vehicle.. well 2005.. not NEW although I COULD have. My interest rate was not 21% and I did not use the Roadloans. If people read the first post I put that I was approved for this but with the credit scores I had, did anyone know what was being offered these days. Someone wrote they were suprised I even got that with 600 FICOS.. WRONG. I got 10%.. not the best but way better than I hoped for.

Well I'd like to say congrats on your purchase...May I ask who you went with? I'm only asking because I'm currently in the market for a vehicle..