Hello all

I bought my 03 Touring Z for $13.9 March of 2013. Ive made a full year of on time payment and I had bad credit before I bought the car. I now owe about $9200 and my interest rate is 13.9%. I knew I had bad credit when I bought the car, but my plans were to refinance once my credit score got better.

Now a year later I want to refinance but Capital One (my *only* credit card) wont refinance anything 7+ years old. My gfs job (BofA) wont refinance cuz its 10+ years old and a credit union told me itll be tough because it has over 100,000 miles.

So what now? Keep hunting till I find a bank thatll refinance me?
I thought about it and if worst comes to worst and I cant find someone, iill sell it, pay off loan and buy me a 98-01 Integra sedan.

 

It sounds like you could have negative equity. Thats a high interest rate, it also sounds like you overpaid for your z due to the year.

I would say go to a credit union and refinance it would bring your rate down. Each percentage point counts and depending on what your credit scores are it can make or break the rate.

 

Ouch, sell the z, buy a teg. Not worth the financial *** kicking. Fix the credit issue then look into financing in the future.

 

Unfotunately most lenders (including credit unions) will not REFINANCE a vehicle that is over 10 years old and over 80k miles. They will finance them from time to time (meaning a dealer had it) but not refinance them. As a sales manager at a dealership, I would recommend that you see if your loan is simple interest and pay it down fast. If it's simple interest, everything over the monthly payment goes to the principle on the back end (that means you will pay less interest which means cheaper car in the end). Now also know this... 13.9% is not a bad rate for a 10 year old car for someone that feels they have challenged credit. Lenders base the rate for used cars on the make, model and mileage (in addition to your personal credit info). A newer car will yield a lower rate in 75% of cases.

 

^^I'd really listen to PigPen in this thread, as he makes good points and has the experience to back them up. His point about the loan rate is a valid one. 13.9% for an older vehicle with high mileage AND a borrower with a poor credit history means its a reasonable rate. Rather than selling the Z (OP is going to be upside down no matter how you look at it), why not keep it and accelerate the payments? You'll end up with a better car and rebuild your credit history at the same time.

 

I'm gona go on an improper rant here. Improper I mean my engrish and grammar. I had soldiers that'd get suckered into 20%+ loans on cars. New, used, whatever. I don't blame the dealers, cause they just sold a car. That's their job. I'd always explain to my guys how it worked and how much they'd pay with little,no, or bad credit. I'd tell them to get something cheap and trade it in a few years, or take a personal loan(I know higher% amount but you can get something older). That way they could build credit and have something to trade in. I was quite upset that I got 7.5% about 5 years ago with a credit score of 700. With a payment of 200$ for 4 years. I thought was kinda high but I guess compared to some peoples payments i feel a lot better...but I digress, you know what every person I worked with brought back? After I offered to go with them, after showing them what payments would be and budget plans? A brand new 20k$ car with 15+% interest. I can only remember a few people that did good, one guy got a slightly used kia(it was his first car) and another guy got a Mazda 6 or something like that. The older guys would reenlist to pay off/ buy a new car and keep the cycle going. If you can't afford it don't buy it. To home boy above, I'm sorry your payments are high. 13% with bad credit isn't terrible though. And pay a lil extra every month to either pay it off sooner or lower your payments. A buddy of mine would donate plasma twice a month and used that 100$ towards his car. Three years of that was 3600$.so he paid it off his car in almost 3 years. Then he took half of what his payments where and that 100$ from plasma( he did it to be a good person or whatever) and that'd be his doing car stuff fund. So like 250$ a month for car stuff. It's not a lot but at the same point for our z's in a year that an exhaust, test pipes, intake, plenum spacer, and more if you budget hunt and are patient.but back to the op, take a defensive driving course to lower your insurance payments. Then use that to help pay on the z. And for the refinance...well it's not the same thing, but when you get the note owed to like 5k~7k take out a personal loan and pay off the z, then just pay like 150$ A month on that loan...it'll stretch out how long your paying, but it keeps an open line of credit to help get that number back up!

 

financing a car is for suckers

 

Or finance it, pay it off early, do that a few times and watch mortgage companies fight for you when you are looking for a house. Building credit is a neccesity now days. Your insurance is based on credit worthiness, your cable and electric providers charge outrageous deposists for people with no or bad credit. Paying cash is a great position to be in...don't get me wrong. But you will NEED good or established credit for something at some point in your life. Why not get it now...

 

cut your losses, buy a teggy outright and get a secured credit card or something. 14% interest is ridiculous

 

14% is like loan sharks. Seriously. If you figure out how much interest you'll pay back with minimum payments it will put a different perspective in your mind.

 

I'm in the mortgage industry no credit is not a problem! Bad credit is.
I've never had a problem with needing a deposit for cable or electric. After a few months if on time payments the deposits are returned.
No you don't need credit.

 

You 100% need credit when going for a credit card or auto loan. Credit worthiness is needed for whenever you borrow money. They want to ensure theu get paid back.

 

yes, I'm in the mortgage banking business, I know credit, but I don't have credit cards or borrow money for cars.

I borrowed for my house and as I said you do not need credit for a mortgage.

 

He will need credit for ever other aspect of life. I doubt he will be buying a house in the next year.

Normal people finance a car, and hopefully pay it off before the maturity date.

 

I love being not normal!

No you do not need credit, this society makes people think they do.

Keep in mind, NO credit and bad credit are totally different.

 

Are you in the military? If so, Navy Federal Credit Union, is your best chance to refinance the car. There are a few credit unions in my area that would refinance the car but it is tough. If you have had the car for a year, your credit score should have gone up, there are just too many factors working against you. If you were to refinance most banks will give you a lower rate, but not by much, because of the mileage and age of the vehicle. You have also paid a huge chunk of your interest on the loan, I would try to double up my payments so that the interest would be less. Are you paying one payment a month? If you were to pay biweekly or weekly, would you end up paying a lot less interest on your existing loan. Remember your charged interest on your monthly balance, if your constantly lowering your principal balance the amount of interest collected by the bank will be less, therefore saving you money.

 

If I were you I would, (if possible) double up on your car payments, or atleast add another 100 or so to it. You should be able to pay off 14K rather quickly. I know I financed my very first car with no credit at 11%, I didnt want to, but I want to build credit and I can afford the notes. Look at it this way, after you pay off that loan and you own that car I gaurentee if you didnt have a missed payment or anything your credit will be high enough to get anything you want, and at a low interest rate.

I wouldnt downgrade to something else. Whats the point if you already upside down on the car just continue to pay it off. In the long run it will help more than it will hurt. Unless your struggling to pay your note right now.

 

I don't think 14% is akin to charges of the loan sharks. I don't know how much you know about the history of interest charges, but when I bought a house in 1981, the mortgage rate was 16.5%. You guys sweat the small stuff too much.

 

Let me clarify: Is it "Needed".....no? Does it HELP.....Absolutley!

You can't tell me that an FTB is going to get the same interest rate, PMI requirements, insurance rates, etc. as someone with established credit. Not everyone is in a position to buy with cash 100% of the time. That's a great problem to have but the vast majority of people are not in that tier. So with that being the vast majority, a little good credit is better than no credit. Banks want to know they are going to get paid (as oldschool350z stated earlier). Mortgage companies wanting to approve anyone and everyone is what got us into the mess we had a few years back with the government bailing everyone and their aunt out. Remember Countrywide...?

OP... Sorry for hijacking your thread like this, but if you can establish some good credit you will be seen from lenders as being credit worthy and will enjoy having lower rates than those that have no credit or bad credit. And next time you want to purchase a car, remember this: If you are going to finance, look for something 5 years or newer with less than 50k miles. That particular car may have a higher sticker price than the 10 year old car with higher mileage, but it will end up being the same price if not cheaper after adding the interest to the older vehicle. This is why banks financing auto loans are more likely to finance you for a new car than a used. Less Risk.