QuestionHello, I currently have a car loan with Capitalone and I'm over 7k upside down on the loan. the car is falling apart and needs work that I cant afford. I have tried to trade the car in, but no one will take it. I need a car to get to work, but can't afford to keep this one. I have even asked my mom to co-sign on a new car, but they will not get the deal done with trading my car. I live in Virginia and do not know what I would be stuck with if I did a voluntary repossession. can you advise?
Answer
car guy
Hi Rich ...sorry to hear you are having those kinds of issues. From the things you said in your email it sounds like you are a youngish person so sorry to tell you this ...you get to due to my belief that you are possibly new to the credit world the answer is that there are two general questions:
The first question is one you have to ask yourself ...you need to look in the mirror, and ask yourself (and it's a question one only you can answer and the only person the answer be shared with is you!
1) Character and Personal Integrity- What CAN you do that demonstrates that you are taking responsibility for your predicament as well as taking on the responsibility for maintaining and protecting your good credit.
THERE ARE WAYS TO GET RID OF THE CAR, payoff Capital One, and get something else reliable (that won't threaten your "personal style" or your "Mojo". Before you start scratching your head because you are almost certain you had tried everything already...it sounds like you did...all of the easy ones that is. Before I go into the how's and why's here is what you need to focus on as a backdrop to all of this ... here is your goal for goal setting: DO NOT UNDER ANY CIRCUMSTANCES GIVE THAT CAR BACK TO THE DEALER, OR THE BANK, OR ANYONE ELSE NO MATTER WHAT YOU ARE PROMISED ... If you do you will kick yourself for a very very long time (7-10 yrs) If you were to lose the car to the repo man you can plan on paying anywhere from 24% to 39.95% interest (at least under Oregon and Washington law)
CAN you get away with, or get by with and what SHOULD you do they are both important and once you allow yourself to compromise yourself it gets easier and easier the next time you are faced with having a similar set of facts.
1) Now that the going is getting tough and making that payment every month, on a car you know to be 7k in the ditch and one you have tried to trade in, and been told no way... and no doubt wasted alot of time in the process ... What is the easy
Hi Rich ...sorry to hear you are having those kinds of issues. From the things you said in your email it sounds like you are a youngish person so sorry to tell you this ...you get to due to my belief that you are possibly new to the credit world the answer is that there are two general questions:
The first questionj you have to ask yourself ...you need to look in the mirror, and ask yourself (and it's one only you can answer and the only person the answer be shared with is you!
1) Character and Personal Intergrity- What CAN you do that demonstrates that you are taking responsibility for your predicament as well as taking on the responsibility for maintaining and protecting your good credit. THERE ARE WAYS TO GET RID OF THE CAR ...payoff Capital One and get something else reliable (that won't threaten your "personal style" or your "mojo". Before you start scratching your head because you are almost certain you had tried everything already...it sounds like you did...all of the easy ones that is. Before I go into the how's and why's here is what you need to focus on as a backdrop to all of this ... here is your goal for goal setting:
DO NOT UNDER ANY CIRCUMSTANCES GIVE THAT CAR BACK TO THE DEALER, OR THE BANK, OR ANYONE ELSE NO MATTER WHAT YOU ARE PROMISED ...
If you do, you will kick yourself for a very very long time (7-10 yrs). If you were to lose the car to the repo man tomorrow, you can plan on paying anywhere from 24% to 39.95% interest (at least under Oregon and Washington law) for the next 3-5 years (based upon very incomplete data)
CAN you get away with, or get by with and what SHOULD you do They are both important and once you allow yourself to compromise what you know is right all for the sake of expediency then you will have no problem doing it again and again. The short cut, and what may look attractive to you today, is really the long cut...I have seen it happen alot and I did it to myself right out of grad school. Your credit rating is one of the things you need to protect and defend at all costs (all legal ...non illegal) Now that the going is getting tough, and making that payment every month on a car you know to be 7k in the ditch and one you have tried to trade in, and been told no way... (and no doubt wasted alot of time in the process ...) OK speech is over.
NOW....here is what you do:
1) Dig out the Cap 1 'retail installment contract' (the long one) that you signed and were given when you bought the car...and look it over carefully between lines 3 and line 5 (on most of them) Did you buy an extended service contract or a maintenance plan or anything else that we call "cancellable’s". If you did, then by all means CANCEL THEM immediately...you will have to go to the originating dealer you bought it from (generally speaking) and use their form and no matter what they say DON'T let them (dealer)talk you out of cancelling it. This could lower your payoff by as much s 2,000.00
2) Put your car on craigslist for the private party value ...I promise you this will be 2k more than you were offered on trade ...retail it thru craigslist yourself.
3) While you are doing this check out this website http://www.edmunds.com/car-incentives This section of Edmunds will show you ...by automaker, all of the customer cash (rebates), and dealer cash on every new car on the market today.
Just for fun I clicked on "Chevrolet" and the list it gives you showed me the amount they were currently offering as a rebate to the customer ... what the sub vented factory supported low interest rate is and in the 3rd column it tells me which cars have the extra dealer cash ...money the dealer would get and doesn't have to share with you. The always inexpensive Chevy Aveo...Brand new has 2,500.00 customer cash and another $2,500.00 in dealer cash. The MSRP on these cars new is under 16k dollars so the dealer may be able to get you out of your car ... rebates are a wonderful wonderful thing! If you click on Chrysler ...they have numerous models with customer cash, customer loyalty cash, finance cash (if you finance with Chrysler financial) AND 6-7,000 in dealer cash! The next bank, especially one of the captive lenders of the Big 3, are set up to love equity deals the most ...I hope this part is clear to you, if not then my email address is roadloans@gmail.com shoot me any follow up questions and I will walk you through it ...probably on the phone and make sure you understand it completely.
4) Find yourself a good local credit union … they will normally do crazy things for their members ….rates are really really low and they will advance over 100% of the MSRP on a new car (up to 130% of invoice here in the Great PNW) which when combined with those rebates get you way out and then some. We have unburied people with over 10k in negative equity many times…they are never easy car deals and no matter what you will want to go thru a franchised dealer because they will have the best banks and the best finance people to get it bought for you. You will encounter lots of lazy car salespeople and finance managers who either don’t know how to do something like this, or are too lazy to do it and aren’t willing to put forth the effort it requires …don’t get discouraged because there are just as many who are really good who will.
5) If you are currently past due on your car loan by more than 10 days then before you go looking for the finance person who knows how to work a deal like this make sure that nothing is past due at all …not even a 10 a month credit card payment. Once you find the person with the right cars on his lot and the right mindset to finance it make sure you tell him NOT to shotgun your application to 20 or 30 banks …he should be able to pull your credit and know the 2-3 banks who will do the deal … do not apply for credit online through anyone’s financing website, and make sure you have a possible way to go before letting anyone check your credit …best thing would be to get a copy from the first place you get close to a deal and then carry it around with you and show them so they don’t have to pull it when you talk with them. Keep me posted and let me know how it goes and feel free to ask any follows you might have for me…
Roger
PS we volunteer our time and services to this forum and all I ask for in return is that you take the time to fill out the ratings survey that you receive. If for any reason you are not comfortable or I haven't been able to thoroughly answer your question, or if you have a follow-up question or two, or need to explain something in more detail before you can give me perfect 10's then please do so. I am here to assist you in any way I can until such time as you are completely satisfied with the answers you have received from me. My personal e-mail address for any follow-ups is roadloans@Gmail.com feel free to ask me to clarify anything, or use it to send a picture of you standing next to your new truck for my wall of fame!. Good luck and I hope you enjoy your vehicle!
