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Discussion Starter #1
So last year I might have made a poor choice and sold my 2007 base Subaru Impreza that I had paid off. I wanted something faster. So I bought a 2010 G37, drives nice but the payments are a bit more than what I was used to with my previous car. I currently owe 17k on it which is what it's worth if sold private party so I'm not upside down on it, yet. I'm supposed to be getting a bit of money soon and will probably put it towards the principal of this loan to try to get ahead on it, probably also sell some parts of my sound system too. I think the first thing I want to do is transfer my auto loan to my bank for a better rate and to consolidate things to keep an eye on.

If you were in my shoes, would you > Kill loan and keep car or Get the loan down to x amount and trade it in for a cheaper car?

I know it seems like I made a stupid move but sometimes you have to learn the hard way.
 

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If you're going to break even in a private sale I would do it now before you're on the back side of depreciation. That leaves you options For what you do next. You know you can't afford it so why not get rid of it for something you can afford and put the money you're getting down on something else.

Getting rid of a car that is paid off is always a risk
 

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A 4% rate on a used car loan is pretty solid. What's your main concern? The payment amount? Or getting upside down in the car?

Cars are a futile venture. Almost never is someone on the right side of a cars' value, even if they pay cash for it. I'm not sure about the particulars of your loan, but assuming you've had it a year, and did a 72 month loan at 4%, you borrowed roughly $21k at payments of $328/mo, and after 12 payments, you would owe $17.8k. Each subsequent year's balance will look like this:

End of year 2: $14.5k
Year 3: $11.1k
Year 4: $7.5k
Year 5: $3.8k
Year 6: Paid off

If your car depreciates by around $3k/year, you shouldn't ever be upside down. Can you get a 2008 G37 with, say an additional 30k miles over yours, for what you will owe on your loan in 2 years- $11.1k? That's a decent way to gauge depreciation.

If you can get a better rate than 4%, go for it. I would shorten whatever the loan term is by however long you've been paying on it though. Don't refinance for 2%, then do a new 6 year loan for example. You'll end up paying that interest for an extra year. If you're that worried about it, plop down whatever money you're getting- $5k for example- and refinance at the same or lower rate for a shorter term. I've seen people in far worse situations though, so I'm not sure what you're stressed about.
 

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Save your money, cars are never an "asset" they continually depreciate.
Don't re-fi, just pay the thing off.
At the time you take the loan, your payments are amortized. Best way to get out from under it is have someone else pay the loan off.
Any other option is a looser.
Monatarily, Cars are a necessary evil... at best.
 

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I agree with mikey. Use the money you're getting to help make your payments or use that money lower the amount financed and refi at lower rate and shorter term.

The problem with looking for a cheaper car is that many times they are older with higher miles and you end up with a higher interest rates with shorter terms which equals a similar payment to what you have now. Good luck! If you have any other questions pm me. I sold cars for 11 years and still work at the dealership
 

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4% is very good. I would need to know your total final situation in order to give a solid advice. But in general, I agree, save your extra cash.
 

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If you are hell-bent on getting out of this car to reduce your payment, then save your cash, and sell it as fast as you can for the most you can get for it and pay the loan off.

Then start over from there with a car you can afford.

If you are inclined to switch cars often you may want to look into a lease. I know leases get a bad rap, but if you know what to look for you can get good deals on certain model cars. But you need to do some research to make sure you know how lease costs get hidden.
 

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Discussion Starter #10
If my current job doesn't fuck me over and actually cashes out my sick sick, personal and vacation time then I'm going to make a nice dent into the loan, but I'm going to refinance the car with another bank because TD auto won't let me put additional payments towards principal.
 

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If my current job doesn't fuck me over and actually cashes out my sick sick, personal and vacation time then I'm going to make a nice dent into the loan, but I'm going to refinance the car with another bank because TD auto won't let me put additional payments towards principal.
Ummm.... what?

Not sure this is a legal practice, is it??? Simply applying overpayment to future payments? Maybe it's a state-to-state thing, but I am thinking that falls under predatory lending laws.
 

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Sell the car if you can break even or make a few bucks.
Lease a 0 down car that is great on gas... Focus was 0 down 197 a month.



Save for a year or two and get what you want.
Leasing a car is the worst possible thing you can do finacially.
The best case scenario is to buy a 1 or 2 year old used model from a private party and fund your own loan through a credit union or bank at the lowest possible interest rate...
An even better way to go about it would be to buy a $500 beater and save your money until you can buy the car you want free and clear.
This of course, requires you to be very humble and patient... and probably very single until you can get your glorious whip just the way you want it.
.....
Grist for the mill....
 

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Check out Penfed.org They have really good interest rates and will refi you.
At the end of the day you have to ask your self if you still love your car. If you do maybe you sink that extra cash into it and lower your payment to a more suitable place for you and pay it off as quick as you can and keep this one a while. Other wise chances are you will get a different car and then get tired of it and in the end will end up spending more money over a longer period of time but possibly put your self in an even worse spot.

However if you absolutely can not afford the car then sell sell sell.. Dave Ramsey approach would be too sell and get a 500 dollar car you can afford until you can pay cash. Maybe you can find something in the middle that long term will allow you to be in a suitable position.
 

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Since you cannot pay extra to apply towards principle, then I would definitely recommend to refinance it. Once you get the large sum of cash you mentioned, I would apply most of it towards the principle, but you need to save some for "emergency/rainy day." If you are in over your head with a payment which is likely in the $400 range, then you are definitely going to want to have some save cash to be accessible.
 

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Consider refinancing through a credit union. I'm still a member of the credit union I joined a couple weeks after graduating from college even though I know live 3 states away from them. We are doing way better than 4%--I think the car I just bought is 2.5 and two years ago I think we got just over 2. My wife has enough direct deposited to the savings account there from her payroll to cover the car loans which are on auto-pay for a rate discount. They make the whole process really easy and everything is handled over the phone and by Fedex. Maybe too easy--buying extremely low-mileage cars at a no-haggle dealership I literally spend only maybe 2-3 hours buying a car.

Not to say they never make a mistake--got a letter due to a missed payment on the new car. Turns out they took the money and put it on the other car due to an error on their part setting up the auto transfer. A phone call, some profuse apologies, and a nice letter they sent for our records apologizing again and assuring us it would never be reported to anyone and it was over. First part could happen anywhere but the second part was much different from a typical bank experience.
 

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Leasing a car is the worst possible thing you can do finacially.
The best case scenario is to buy a 1 or 2 year old used model from a private party and fund your own loan through a credit union or bank at the lowest possible interest rate...
An even better way to go about it would be to buy a $500 beater and save your money until you can buy the car you want free and clear.
This of course, requires you to be very humble and patient... and probably very single until you can get your glorious whip just the way you want it.
.....
Grist for the mill....
Not at all. My father was in the car business for roughly 30 years.
While MOST leases are HORRIBLE financial choices. Leases that are 0 down and have very low monthly payments can be very economical, if you get the right car.

A 0 Down lease for 195 a month is as cheap as you will find a reliable car for. Keep in mind that maintenance and car washes are included in this.
If you aren't driving crazy miles and need something to get you to work, this is one of the most economical things you can do.

The guy isn't happy with his current vehicle and would like to get out of it without taking a giant hit and being in the hole.

OP:
Calculate what monthly payment you are comfortable making. Subtract the lease from that amount and pay yourself the left over. Use that money to help make a nice down payment on the car you really want. It's just a matter of being patient or wanting it now. No sense having a large payment for a car you don't really like. Especially one that isn't holding its value.
 

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Discussion Starter #18
So here's an update. Getting paid out for unused sick, personal and vacation time. That with some out of pocket funds and maybe selling my current system will get the car down to 10k before july. Which will lower my payment to a more affordable payment. I'm also refinancing with a really good local bank (getting away from T.D bank) my credit score is pretty killer so I think i'll get a lower rate than my current 4.5%. I make all these payments towards principal and maybe by tax refund season I can slay this loan.

I start a new job which I will be making a little less starting for now but will hopefully rank up quicker than average newcomers. If I pay off my car I might sell it and upgrade to another car if I can manage to make sure the loan is less than 10k. Maybe I'll smack some sense into myself way before then and just be happy with a paid off car with plenty of life left in it. Thanks everyone for your advice.
 

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The best FINANCIAL move you can make at this point would be to sell the car. You can't afford it. Do not put any money towards the loan...sell this spring/summer and get as much as possible. Probably not what you want to hear, but it's the best decision FINANCIALLY.
 

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If my current job doesn't fuck me over and actually cashes out my sick sick, personal and vacation time then I'm going to make a nice dent into the loan, but I'm going to refinance the car with another bank because TD auto won't let me put additional payments towards principal.
That doesn't seem right. My understanding is that a vehicle loan has to abide by certain regulations which allows you to pay payments to principle so long as you have made on time your last required monthly payment.

That said, nothing like not having a car payment. It is one of the most freeing things on earth.
 
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