The_Black_Log Foler
PalsCo CEO - Stock Pals | Pantheon Pals
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Car ?'s
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Lanx
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Rajaah
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It isn't that I can't afford it, it's that it's a bad deal and a financial albatross since I'm paying more for it than it's actually worth and the interest is hemorrhaging more money. I could afford the initial price I paid on it until I let them tack more stuff onto it and give me a high-interest payment plan. I'm dropping $500 a month on it just to overpower the interest payments. If I go a couple months of only doing the minimum payments, interest eats most of it.
So at this point I think it's in my best interest to get it off the books. On the bright side it's got full Zurich protection forever.
It's a Mazda 3 with a lot of bells and whistles and high fuel efficiency. Was actually a decent deal on paper before all of the other stuff happened. 2017 and low mileage, something like $12k at the dealer as the base price. Plus $4k or so for the full Zurich protection on the car forever.
At this point, about $14000. I believe it was around $17500 to start when I got it late last year. Factoring in interest, if I keep paying on it over time I'll probably end up north of $20000 altogether for a car worth a little more than half of that.
Lanx
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that'd happen if you got like a 4 or 5 year loan with 6%interest
why would you want to junk your credit score w/ something so low just to claim bankruptcy on this? this just amounts to a really bad overdue credit card... you claim bankruptcy on house(S) (multiple), and 7 figures or more... claiming it for barely 20k is not worth the bullshit of starting out with zero credit again.
Rajaah
Honorable Member
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That's what I'm thinking. I don't even know how to claim bankruptcy or what goes into it. It isn't on the agenda. I'm just wondering what the best way to get rid of this albatross car is, since it's a hemorrhaging investment as long as that bank loan exists.
Lanx
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i mean what can you do?
sell it
restructure your loan
say fuck it and ride it, till it gets repossed
voluntarily repo it (you give it up)
maybe it's cuz of covid you can't handle this or you can just blame it on covid, but 1year later when youre doing something that needs a credit check, i doubt anyone will blink an eye when you say
"yea this car payment..."
covid 2020
if you have super prime or prime credit, you could probably take the neg credit hit this would cause.
if for some reason your notprime or even subprime and for some ungodly reason you lost your white priviledge card... i have no idea how your credit would be this low... then theres no way you can take the hit.
imo give it a good wash or detail it and try to sell a used car during covid while also talk to your bank and see if you can restructure it
Loser Araysar
Chief Russia Reporter. Stock Pals CEO. Head of AI.
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Hard to say without knowing exactly how high the interest rate is, because that should inform you how much money you'd waste in interest and how badly you need to prioritize this debt
Shitty situation but I wouldnt declare bankruptcy for $14K. It will basically fuck up your life. Its like burning down a house to kill a spider. I also dont think anyone would want to take over payments on something with terrible interest
Id suggest looking into an Auto Refi for Bad Credit, even with bad credit you could possibly get a better interest rate that would fit you. Dealers always give the worst interest rates.
A credit union could give you a great rate (especially if you are a member with one of the military ones like (USAA or PenFed or NavyFederal). Actually if you have a family member or a relative whos a veteran, ask them if they can be your referral to open up a military credit union account and then run your auto refi through them. they'll give you amazing rates
If that doesnt work, i'd prioritize paying this debt off ASAP to stop burning money on interest and just keeping the car, even if it means paying $1K/mo on it and killing it in 14 mos instead of 60. Mazda3 are pretty reliable (I owned a 2008), this car will last you another 6-7 years (probably way longer) which isnt that bad for a $14000 entry level sedan from a solid manufacturer.
This is also another option called Voluntary Reposession, I've never done it but heard about it when I worked in automotive a few years back. You basically call up your lender and tell them you're no longer able to make payments on it. They take it from you, resell it, and you have to pay the difference between your loan value and what the car sold for. I never tried it but it might be better than taking a bankruptcy hit if youre really desperate to get rid of this car. Stays on your credit report for few years though
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Lanx
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yea it stays on your credit report b/c it is still a loan default, all youre doing is avoiding the repo man fees and avoiding embarressment
i would try to avoid this and just sell or restructure the loan.
Rajaah
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Burren
Ahn'Qiraj Raider
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You're thinking about bankruptcy over a $15k-$20k car? That's like someone having a hang nail and deciding to just cut off their hand. You go BK and you can forget about credit and decent loans on future cars for 7 years.
brekk
Dancing Dino Superstar
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How the fuck do you have $500 payments on a 17500 loan??
As for oweing more than its worth. Welcome to cars... If you don't like it, buy used shitboxes off Facebook Marketplace. Cars are depreciating assets, they will cost you money. If you buy a car brand new the second its off the lot its worth less than the loan. That's doesn't mean you need to get out of the deal. It means pay it off so you can at least limit the interest, suck it up, and do it all over again.
As for oweing more than its worth. Welcome to cars... If you don't like it, buy used shitboxes off Facebook Marketplace. Cars are depreciating assets, they will cost you money. If you buy a car brand new the second its off the lot its worth less than the loan. That's doesn't mean you need to get out of the deal. It means pay it off so you can at least limit the interest, suck it up, and do it all over again.
Lambourne
Ahn'Qiraj Raider
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I'd say take it on the chin, throw every spare dollar into the loan to pay it off ASAP and vow not to repeat that mistake. Drive car until it needs replacing and buy next car cash. Shopping on price rather than a monthly payment makes it way harder for salesmen to tack on shit you don't need but which does end up costing you an arm and a leg over time.
Refinancing at a lower rate is good if you can, but getting off the car loan treadmill should be your end goal.
Refinancing at a lower rate is good if you can, but getting off the car loan treadmill should be your end goal.
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Lanx
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used 10yr hondas start at 4k within 100miles of me, don't sound like you know about cars beyond putting in gas and right pedal go fast, so as long as you just take it into the shop to get a 3k oil change, there you go.
sounds like any other type of car is gonna be too much for you to handle.
sounds like any other type of car is gonna be too much for you to handle.
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BrutulTM
Good, bad, I'm the guy with the gun.
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^^ Good advice.
Nothing you're going to do is going to make this into a good deal, just pay it off as fast as you can to at least cut down on the interest you're going to pay. I'm all about saving up and buying used cars from craigslist for cash. If I never set foot in a dealership or sign on a car loan again that will be just great.
Burns
Avatar of War Slayer
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If you dont want the car anymore, the best financial decision for your future use of credit would be to take the hair cut, and sell it outright to a private party, and add your own money to pay it all off, right there. I dont think the bank will give up the title to a new owner without the loan being paid off.
If you do want to go ahead and keep it, just as others have said, go to different banks and see if they will give you a better rate.
Alternatively, you can also just walk away from it, tell the bank you aren't going to make any more payments, and let them repo it (ask them where they want you to turn it in). Of course, they will report this to the credit agencies. There is no debtor prison and they cant garnish your wages. You might be hounded by collectors, so YMMV, but honestly, with all the scam bullshit calls we get now days, debt collectors would one voice in an ocean.
Regardless, you should call/email the bank and tell them you can no longer afford the payments (even if it's not the whole story). First ask them what they can do to make it more affordable. If that wont work, ask if you can sell it for market value to a private party, give them that money, and make a new loan with the existing balance. If that wont work, ask them what repo service they wish for you to turn the vehicle into.
Selling it in general will probably be difficult as this juncture, as the vehicle market should be proper fucked right now. In addition to the corona shit happening, Hertz is, or about to flood the market with a bunch of cars, from Corvettes to Corollas. If you want to try, you will need to know the going rate for it. I have been out of the market for a car for 6 years now, so I guess craigslist is total shit now; so Ebay might be the best place to get a running price, if its a popular model. Record the prices over the course of a week or more, and the low side will be close to the non-dealer price.
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Rajaah
Honorable Member
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That's what I'm thinking at this point. I'll get it paid off as quick as I can and if I end up selling it I'll put that towards the balance (and still owe more, most likely, lul). Best thing I can do is just mitigate the interest.
The payments are $340, I pay $500 instead to help offset the ridiculous interest that takes up a large portion of the payments. I can try to go higher, but even if I pay $1000 a month we're looking at possibly close to two years of payments which is a bit more shitty than I'd like, but so it goes.
Not seriously considering or thinking about bankruptcy. It was one potential option out of the bunch of potential options I came up with.
I believe it had 35000 miles, year is 2017, and I put about $2000 down. It also had the full Zurich Shield protection plan on it which added $4500 or so to the base price and lasts, I believe, six years or so. This also got added to the bank loan and was the main thing I shouldn't have let the dealers talk me into (the car hasn't needed it at all).
Cancel the Zurich Shield bs crap and get a prorated amount back at least. Start there and then refinance the loan at a credit union.
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Lanx
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wth
how you'd think that when signing the loan that $340 a month for a 17k purchase was a good thing to do?