QuestionI currenty have a 2004 chevy cavelier with a 21% interest rate. I owe about 10k and would like to trade that car for a cheaper car with lower monthly payments. By cheaper, i mean less than 10k. My question is, will my payent be lower if the car is cheaper and i have no late payments? And will my payment history get me a better interest rate? I was told that i had such a high interest rate because i had a car reposession on my credit report rom like 5 years ago.
AnswerHi Nakia,
Thanks for your question.
I am sorry I am just getting back to you. Here is what I would recommend for you to consider;
Firstly, you will need to have your Cavalier appraised. You will probably be what we refer to in the car business as "upside down." This simply means that you owe more money on your car than what the market will bring, what it's worth.
Secondly, you being "upside down" will not help you decrease your monthly payment. What normally happens is whatever the difference is, will usually be rolled into your new monthly payment. Or, if you're purchasing leftover new vehicle with a lot of rebates, that may help you with paying off your Cavalier.
If you've paid well on your current Cavalier, you should have improved your credit score and this will ultimately help you with getting a lower interest loan.
If all else fails...you can bit the bullet and start sending an extra 20 or 40 dollars a month in with your payment. That will begin to lower your payoff and save you money in interest in the long run.
Good luck and I hope this helps!
Doug
