Results 1 to 11 of 11

Thread: Cant get a new car..:(

  1. #1
    Featured Member
    Joined
    Aug 2005
    Location
    Florida
    Posts
    1,688
    Thanks
    0
    Thanked 26 Times in 19 Posts

    Default Cant get a new car..:(

    I want a new car,something newer than my 2000 Galant. I can make a down payment,I can handle payments up to $500/mo. with no problem...but they wont take my car as a trade in. I owe $6000 on it but its only worth $1500. It runs like shit,smells like burning oil,and sounds like a helicopter. Im stuck with it? I cant afford two car payments. If they wont take it as a trade,how do i get it off my hands??? Im desperate...Ive even considered having it "stolen and wrecked". lol What do I do?

  2. #2
    mermaidnz
    Guest

    Default Re: Cant get a new car..:(

    *ouch*

    firstly, research the car your buying so you dont pay $6k on a car worth only $1.5k.secondly, why do you need a NEWER car? my cars a 1996 toyota supra, id rather that over a year 2000+ almost anything in the same price bracket. get a reliable car, not a new one cos its fancy!!

  3. #3
    Banned
    Joined
    Nov 2006
    Location
    in the middle of a cornfield
    Posts
    5,119
    Thanks
    2,693
    Thanked 2,988 Times in 1,098 Posts
    My Mood
    Fine

    Default Re: Cant get a new car..:(

    The dealership wouldn't let me get a car unless I had like $6000 to put down. All because I don't get a paycheck because I'm an independant contractor. B.S.!

  4. #4
    God/dess sxybrat07's Avatar
    Joined
    Jan 2006
    Location
    in yer bum
    Posts
    3,827
    Thanks
    0
    Thanked 12 Times in 11 Posts

    Default Re: Cant get a new car..:(

    You can get more if you sell it privately, though if it's really in that bad of shape, you're probably gonna have to pay to get out of it. Go to nada.com or kbb.com and see what the private party value of your car is, and go from there.
    I believe you Dottie and you have my support

  5. #5
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: Cant get a new car..:(

    I don't want to go overboard on finances and the politics behind them outside of Dollar Den, but for a fact ...

    ... the 'subprime' mortgage default disaster, the impending credit card default disaster, the 'bailout' deals being hammered out between lenders and politicians etc. all point to a fundamental change in the way that credit is now / will be approved by lenders. Essentially all of the gov't mandates that lenders must provide a certain number of loans to 'risky' borrowers are falling by the wayside. Bank regulators are strongly encouraging that lenders fully evaluate the ability of a would be borrower to repay their loan, even under 'worst case' circumstances. Banks are also now very concerned about the 'salability' of any new loans they write into a secondary investor market.

    Thus where lenders are concerned, self-employed persons of any sort have one strike against them since they don't have a 'verifiable' future income. Lenders consider it a double whammy if self-employed persons don't have a 'verifiable' past income ... i.e. several years worth of tax returns showing a significant amount of declared income.

    Lenders also now consider job security as one of the 'other' factors contributing to creditworthiness. Where dancers are concerned, lenders realize that dancer's incomes are very insecure. They could break an ankle tomorrow and be out of work for months with zero comp or health insurance coverage. Their incomes could be cut in half tomorrow by the passage of a new local anti-strip club law.

    Lenders also consider overall debt to equity ratio as a criteria for creditworthiness. From that standpoint your existing car loan is deeply 'underwater', and is acting like a boat anchor on your creditworthiness. Your 'underwater' car loan is basically being viewed by lenders in the same way as if it were a $6000 credit card balance, since the guaranteed value of the collateral (your 2000 Galant) is next to nothing.

    Lenders have also been chastised for writing loans financing 100%+ of the 'appraised value' of the collateral. It used to be standard practice for mortgage lenders to write mortgages for amounts that exceeded the market value of the house via booking an inflated sale price. It used to be standard practice for car dealers to 'roll over' outstanding balances on loans for traded in vehicles into a new single car loan ... by selling the car at an inflated price. Underwriters and auditors now have HUGE problems with debt versus equity ... and are looking to see new loans written that have at least 10% and preferably 20% equity versus the ACTUAL market price of the collateral. Thus if you're looking at a new car with an ACTUAL price of say $15,000, the most that you can reasonably expect a mainstream car loan lender to finance would be $12,000 total.

    This basically means that in order to have a chance of getting approved for a mainstream car loan, #1 you're going to have to pay off the existing $6,000 car loan balance and #2 you're going to have to come up with probably 20% cash down payment on the new car you're looking to buy - PLUS cash up front for title + insurance + registration etc. It pretty much also goes without saying that you won't get approved for car manufacturer's financing, because GMAC and other manufacturer's financing divisions are already in deep doo-doo with rising loan defaults thus they're now only approving factory financing for buyers with excellent creditworthiness (i.e. stable 'employee' jobs + assets / investments + 720+ credit rating)

    You can probably still get approved for a 'trick' car loan like 1-800-BARNONE etc. but you're going to wind up paying through the teeth for the 'privelege'. You'll get hosed the first time on the sale price of the car which can only be purchased through 'member car dealers' who will add extra dealer prep charges etc. You'll get hosed a second time on the interest rate charged for the loan.

    Bottom line is that there is no 'constitutional right' to credit. With every bank / lender in the country experiencing rising default rates and having to raise their reserves against future loan losses, and with secondary market investors having already taken heavy losses on belly-up loan investments, there is now a limited amount of cash available to lenders for making new loans. Therefore the lenders are being much more selective in regard to which loan applications they approve versus which loan applications they reject. Thus regardless of the 'fairness' involved, self employed 'strippers' are now undesireable loan customers ... unless of course they have a multi-year file of tax returns to show the lender + a net worth via home equity + bank balances + value of investments that is several times greater than the amount of loan money they are applying for.

    ~
    Last edited by Melonie; 12-05-2007 at 02:14 PM.

  6. #6
    Featured Member
    Joined
    Aug 2005
    Location
    Florida
    Posts
    1,688
    Thanks
    0
    Thanked 26 Times in 19 Posts

    Default Re: Cant get a new car..:(

    ^^^ im not smart enough to understand all that.
    Cant they just take my car and add the 6000 onto my new car? and just junk that one?? I dont want--im sorry,need -new car. just something worth paying for. and the issue here is not what I need or dont need. I know what I want and need and what I want is a nice car because ive drivin shitty cars since i was 16. i hate that it looks like im stuck paying 5000 extra for this junk... maybe closer to new years they will be more forgiving of my credit/crappy car....

  7. #7
    Veteran Member beautiful.'s Avatar
    Joined
    Aug 2007
    Posts
    645
    Thanks
    0
    Thanked 0 Times in 0 Posts

    Default Re: Cant get a new car..:(

    Quote Originally Posted by Xiomara View Post
    ^^^ im not smart enough to understand all that.
    Cant they just take my car and add the 6000 onto my new car? and just junk that one?? I dont want--im sorry,need -new car. just something worth paying for. and the issue here is not what I need or dont need. I know what I want and need and what I want is a nice car because ive drivin shitty cars since i was 16. i hate that it looks like im stuck paying 5000 extra for this junk... maybe closer to new years they will be more forgiving of my credit/crappy car....

    From what I understand, they can't add the 6K onto your new car because you have a loan through another financial institution that isn't the same as whoever you are trying to go through now. Either that or they just flat out won't do it. They want their money for the first car you bought before they give you another one. I don't know a ton about the subject so I'll shut up now. But good luck! I'm looking into getting a new(er) car too and it's a terrible pain in the ass.

  8. #8
    God/dess VenusGoddess's Avatar
    Joined
    Oct 2003
    Location
    Home
    Posts
    13,598
    Thanks
    0
    Thanked 28 Times in 23 Posts

    Default Re: Cant get a new car..:(

    the only time a finance company will add the payoff of your old car to your new car is if the COMBINED total of the two cars will still be under what the total value of the car is.

    For instance, if the car you're buying is being sold for $14,000 and your payoff is $6000, and the value of the car is $21,000....they may add that payoff to your financed total.

    However...it is VERY rare to find a really good car that low under market value (on a dealer's lot) and it is also very rare for a dealer to pay off a $6000 loan on a car that is only worth $1500 and that they MAY only get $2000 for on the lot.

    If your car is totaled, the insurance company will pay off the VALUE of the car...but it will not wipe our your loan...unless you have GAP insurance (this insures the difference between the value of your car and your loan amount....everyone should have this on their car). So, if you do not have Gap insurance and your car is totaled and book value on your car is $1500...then the insurance company will cut you a check for $1500 and YOU will still be responsible for the other $4500 left on your car loan. Just because your car is totaled does not mean that you will be released from your car loan.

    I'm thinking that you bought this car out of desperation and from a "chop shop". You are better off trying to sell it for cash than trying to trade it in. OR if your credit is good enough, buy the newer car and let the bank repo the other car.

    Other than that...I don't know what to tell you.

  9. #9
    God/dess FrustratedBunny's Avatar
    Joined
    Jan 2006
    Location
    New Orleans, LA
    Posts
    2,457
    Thanks
    0
    Thanked 4 Times in 4 Posts

    Default Re: Cant get a new car..:(

    If you are that upside down in your car I'd just spend the money trying to fix up the car you have.

    Otherwise you'll have to either turn it in to the finance company which will completely wreck your credit for a long time or sell it and pay off the difference, both of which will cost you in the long run. If you get it repoed/turned in you'll have a heck of a hard time getting a car loan for a while.

  10. #10
    God/dess sxybrat07's Avatar
    Joined
    Jan 2006
    Location
    in yer bum
    Posts
    3,827
    Thanks
    0
    Thanked 12 Times in 11 Posts

    Default Re: Cant get a new car..:(

    Quote Originally Posted by VenusGoddess View Post
    the only time a finance company will add the payoff of your old car to your new car is if the COMBINED total of the two cars will still be under what the total value of the car is.
    Exactly. Loaning out more money than the car is worth (especially an amount as substantial as 6k), would be stupid on their part, especially if you have bad credit.
    I believe you Dottie and you have my support

  11. #11
    Banned gingerlee's Avatar
    Joined
    Dec 2005
    Location
    Where the cool kids hang out.
    Posts
    4,103
    Thanks
    0
    Thanked 0 Times in 0 Posts

    Default Re: Cant get a new car..:(

    Quote Originally Posted by mermaidnz View Post
    *ouch*

    firstly, research the car your buying so you dont pay $6k on a car worth only $1.5k.secondly, why do you need a NEWER car? my cars a 1996 toyota supra, id rather that over a year 2000+ almost anything in the same price bracket. get a reliable car, not a new one cos its fancy!!
    Damn straight! I've got a Ford Taurus that I drive to bookings that is a 98 but it runs great, gets awesome gas mileage, and I own in flat out. I've got a truck and I used to have a Corvette but the Corvette SO didn't fit into my lifestyle! I'm on the road driving to strip clubs in the middle of nowhere, and I couldn't fit a damn thing into my Corvette. I needed something big enough to put all my stuff in. I was sad when I got rid of it but it just didn't make sense to have it, so I got a truck instead. I'm still making payments on my truck, and even though it's newer and cooler, sometimes I like my Taurus better.

    Get what works for you and your life, not something that you think is cool.

Similar Threads

  1. Replies: 9
    Last Post: 06-10-2008, 04:51 PM
  2. I had a car accident and my car is a write-off
    By jaizaine in forum The Lounge
    Replies: 31
    Last Post: 11-07-2007, 09:05 PM
  3. car loan vs car lease
    By jaizaine in forum Dollar Den
    Replies: 10
    Last Post: 07-31-2007, 04:20 AM
  4. Replies: 53
    Last Post: 06-23-2007, 03:10 PM
  5. Replies: 12
    Last Post: 02-02-2007, 08:52 AM

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •