Car finance issue

[Fhloston]

So I've had my 05 Grand Prix for about four years now. Got it used, but made the mistake of getting it without a down payment. My payments are $444/mo, which takes a good chunk of of paycheck. The car is in my grandmother's name, and she could not refinance because she made the mistake of letting her son put his car in her name. He's had his car repo'd twice, so her credit is in the shitter. I, on the other hand, have never missed a payment.

My other problem is that I have never had credit. I was afraid when I was young that I would get in debt and go out of control with spending, and just never got around to applying for one. I have always used a debit card and have been fine with that...just that having credit comes in handy for times like this...I can get a card at some department store or get a loan and pay either of those for 6 months or so and let credit build, but I would like to fix this issue ASAP so my money can be used for more important things. Bills, groceries, etc.

Friends of mine recommended I just let the car go, and let them repo it. Since my grandmother's credit is already in the shitter, it won't really make a difference. They have also recommended that I get something economical, and find a dealer that gives you cash up front to use as a down payment, so my payments won't be so high. (Aiming at $250-$300/mo at least....)

I'm no credit expert, and I know even less about purchasing vehicles. So I'm asking you, BG, is letting the car go the right route to take? I currently owe $10k, and that would be two more years of paying these high payments. My auto finance company also has a "workout offer", which means that she shows them her financial status, her bills, how much she gets per month, etc, and they try to work something out for that. Thing is, I'm already backwards on payments for the car, so I'm wondering if that's even worth it.

Thanks in advance for your help, and have a merry Christmas!

[Cyn]

$444/mo for four years and you still owe $10k.... on a used Gran Prix?

Your interest rate must be astronomical.

[Melchiah]

Sounds like you got fucked up front on the price of the car. My payments on my 2009 Mustang are $315 a month, but I also had a $1500 downpayment and an $1800 trade-in, so your mileage may vary.

With that being said, if you're ok with fucking your grandmother's credit up even worse than it already is, the easiest thing for you to do is let the car go and then back up and punt, try for another car with easier payments to make.

That however, as with most easy ways out, is the most penile of dick moves. The best thing for you to do is to try your damnedest to make the payments as best you can, it's only two more years and if you're working, you've got tax season coming up in a couple of months and you could be due a refund that if you apply directly to the $10K principle will shorten your loan length while decreasing the total amount you owe.

Your call though.

[Fhloston]

That however, as with most easy ways out, is the most penile of dick moves.

Yeah, felt this way also. I raged when I heard her son already had two repos, so it just makes me look like a hypocrite if I do the same. Just that, yeah, it's the easiest method out. Even had a banker suggest it, lol....

[Fhloston]

Also thinking of taking it to Carmax, I've heard some good things about them. Anyone have experience with 'em?

[Necronus]

So I've had my 05 Grand Prix for about four years now. Got it used, but made the mistake of getting it without a down payment. My payments are $444/mo, which takes a good chunk of of paycheck. The car is in my grandmother's name, and she could not refinance because she made the mistake of letting her son put his car in her name. He's had his car repo'd twice, so her credit is in the shitter. I, on the other hand, have never missed a payment.

My other problem is that I have never had credit. I was afraid when I was young that I would get in debt and go out of control with spending, and just never got around to applying for one. I have always used a debit card and have been fine with that...just that having credit comes in handy for times like this...I can get a card at some department store or get a loan and pay either of those for 6 months or so and let credit build, but I would like to fix this issue ASAP so my money can be used for more important things. Bills, groceries, etc.

Friends of mine recommended I just let the car go, and let them repo it. Since my grandmother's credit is already in the shitter, it won't really make a difference. They have also recommended that I get something economical, and find a dealer that gives you cash up front to use as a down payment, so my payments won't be so high. (Aiming at $250-$300/mo at least....)

I'm no credit expert, and I know even less about purchasing vehicles. So I'm asking you, BG, is letting the car go the right route to take? I currently owe $10k, and that would be two more years of paying these high payments. My auto finance company also has a "workout offer", which means that she shows them her financial status, her bills, how much she gets per month, etc, and they try to work something out for that. Thing is, I'm already backwards on payments for the car, so I'm wondering if that's even worth it.

Thanks in advance for your help, and have a merry Christmas!

Call me crazy, but since the car is in her name I assume you mean the title? Or is just the loan in her name but the title in your name.

If its the car title and loan in her name, can't you jusy "buy" the car from her with a totally independent loan of your own with the title changing to you?

If its the second one ... well, I dunno? Why does her credit matter on the refinance? I understand you have 0 credit, but thats a relatively small loan so can you perhaps find a bank willing to do the refinance in your name?

[Brill Weave]

Seriously you got fucking raped on your rates. This honestly seems like a no win situation for you. I think it would be stupid to let the car be repo'ed. Your best bet is to look at dealerships to see if they have any good offers going on, if they do trade it in.

[Melchiah]

Call me crazy, but since the car is in her name I assume you mean the title? Or is just the loan in her name but the title in your name.

If its the car title and loan in her name, can't you jusy "buy" the car from her with a totally independent loan of your own with the title changing to you?

If its the second one ... well, I dunno? Why does her credit matter on the refinance? I understand you have 0 credit, but thats a relatively small loan so can you perhaps find a bank willing to do the refinance in your name?

He can't do that if he doesn't have a credit rating built up. In most cases, no credit is worse than bad credit. He'd probably have to get a shittier loan than the one he's in right now in order to do what you're suggesting, which is basically the same as refinancing.

The big problem he's facing is that he owes considerably more than the car is worth, thus he can't use the car as collateral on a new loan.

[archibaldcrane]

This thread makes my head hurt.

You're actually getting good advice for how stupid this situation is, so follow it. Look into refinancing if possible, swing by CarMax if you want to eat shit on the difference (they'll give you an offer you can walk away with and just use it as a backstop if you wish - the offer will be significantly below market value though).

Looking at bluebook, a base model '05 Grand Prix in good condition with 50k miles is only worth $6740 in a private party sale.

I dunno man. Good luck.

[Nystul]

I don't really have advice. I just wanted to tell you a few things so you and others can possibly better learn from this.

Thus far, with ~4 years of payments at $444 you've paid $21,000 for this car. And you still owe 10k. If you paid it off in full tomorrow you would have put down 30k+ on a damned 05 Grand Prix. I hope that hurts you- it's an important lesson to learn. If you do continue to make payments, you'll actually spend another 500 or so more.

It is imperative to ALWAYS consider the interest rate, the time it would take you to pay it off, and the total cost you would incur when making a payment. I'm sure when you signed your name onto this deal 4 years ago if the seller had told you that the list price of 20k or whatever and the 20% interest or whatever the heck was the original sale would REALLY amount to over 30k you wouldn't have bought the car.

The unfortunate thing is that (I'm assuming) you're fairly young and you could have purchased a far less "sexy" car for 5-10k, and then taken that other 20k that would have gone into car payments and put them into savings which would now be worth a decent chunk more, and now you could afford to outright purchase a decent 15-20k car straight up and avoid sinking cash into crappy interest rates etc.

You're going to get lucky because it's in someone's name..so to speak. The interest rate you got was terrible BECAUSE it was in your grandmom's name but whatever. Talk it over with her before you go and do this-check on her credit before you go and do this (it's free) so you don't potentially screw up her credit if it has repaired somewhat in the intervening years. Make sure she doesn't have any significant purchases/events upcoming events that could be impacted by another dip in her credit.

The final lesson here is that you should NEVER EVER cosign a loan for someone unless you are willing to a) have your credit screwed up and b) make the payments on the purchase yourself in their entirety. Someone that needs a cosigner is by definition a high risk borrower, either unproven and inexperienced or proven to be a bad borrower. The bank will not assume any risk- YOU do. Be prepared for the person asking for the cosign to bail completely, miss payments, etc. Or better yet, don't do it.

[510Meeze]

Talk to your grandma. If she is ok with the loan defaulting, you can buy the car off of her for a smaller price, take out a loan for the car, build your credit. The money for the car will go to the finance company and your grandma will be on the hook for the remainder.

The other option is to trade the vehicle in for a new car, the balance of the trade in will go on your next payments. Or you can sell the car on your own and try to get what ever for it. Looks like you're upside down 3-4k if you sell it on your own, and probably 5-6k if you trade in. If the car has lots of miles, it probably wont be worth trading it in because dealerships usually sell those straight to auction because it's hard for them to sell.

Car loans are pretty easy to get.

[foopy]

Talk to your grandma. If she is ok with the loan defaulting, you can buy the car off of her for a smaller price, take out a loan for the car, build your credit. The money for the car will go to the finance company and your grandma will be on the hook for the remainder.

wut?

you think the finance company will allow the OP to walk away with the car by simply 'buying' it from his grandmother for a 'smaller price'?

if that were the case, i'd tell my grandmother to finance a lambo, 'buy' it from her for $1, and let her 'be on the hook' for the 250k.

to the OP:
a) accept personal responsibility for what you(granny) agreed to do in the signed contract and pay up.

b) lol@granny, fuck that car. get a new one for a much better price.

[Thiefami]

Let it go. Go for the default, and repo. You are too young to be tied down to that ridiculous financial obligation. In the time, effort, and money it has taken you to pay that car off you would have been able to purchase two(albeit, cheap and used, but well working) cars. If you would care to you could possibly pay or help pay your grandmother's bankruptcy fees. You both would probably be in a better position afterward.

[Takedown3]

trade in

[SephYuyX]

More people need to understand that paying anything more than 15k for a car is silly, and 15k is only ok if youre buying new or like new.

Youll get a better deal buying cheap old used cars with cash then buying new or newish used on credit. I bought a 93 Corolla in 98 for 5k, and I still drive it. All those for sale cars in peoples lawns are great deals, pick up a locak autotrader and go to town. My friend bought a complete clunker for $300 years ago and still drove it for a bit over a year.

[happydude]

yea i dont want to drive a 93 corolla so no thanks

[510Meeze]

wut?

you think the finance company will allow the OP to walk away with the car by simply 'buying' it from his grandmother for a 'smaller price'?

That is how car sales work when you're upside down on a car. If you're upside down and sell the car, the new financing company sends the check to the title holder (bank) and the rest of the money is owed.

[510Meeze]

More people need to understand that paying anything more than 15k for a car is silly, and 15k is only ok if youre buying new or like new.

Youll get a better deal buying cheap old used cars with cash then buying new or newish used on credit. I bought a 93 Corolla in 98 for 5k, and I still drive it. All those for sale cars in peoples lawns are great deals, pick up a locak autotrader and go to town. My friend bought a complete clunker for $300 years ago and still drove it for a bit over a year.

If you suck at life, paying $300 for a clunker is great. For most of the adult population, driving a late model dependable car is more than worth the price tag. Buying used is a crap shoot, you can raise the odds of a good car when you purchase cars like corollas and civics, but you still run the risk that the car wasn't taken care of properly (and no, carfax won't tell you shit about how a car was maintained).

[Seraph]

If you suck at life, paying $300 for a clunker is great. For most of the adult population, driving a late model dependable car is more than worth the price tag. Buying used is a crap shoot, you can raise the odds of a good car when you purchase cars like corollas and civics, but you still run the risk that the car wasn't taken care of properly (and no, carfax won't tell you shit about how a car was maintained).

But even having to fix a lemon used car multiple times is often cheaper in the long run than buying a new car.

This is why people are broke.

[SephYuyX]

yea i dont want to drive a 93 corolla so no thanks

Hence most people's problems. Theyd rather pay more to be 'stylish' than practical. So silly.