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refinance or trade?

Discussion in 'Members' Lounge' started by gomezkun, Jan 14, 2009.

  1. gomezkun

    gomezkun Yay for DOHC VTEC ^_^

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    I had a question that I keep getting different answers to but am not sure which would be the better move.

    So I bought an 07 Civic Si back in June of 07.
    I was going through some hard times emotionally and I wanted the car - didn't care about interest rate. Currently I am still at 9.99% APR and the monthly payments are about 556.00 a month. After deploying, I dropped an extra 6k into it and I have always paid 560 a month.

    I am at about <20k that I still owe and my intentions were to go and get it refinanced for a lower interest rate and monthly payment (that way if I choose to make more of a payment it goes towards the principle)
    Many coworkers are telling me that I am in favor over the life of my car and that I should trade it in for another vehicle with lower payments/price tag and potentially not be in so much debt.

    It's got about 15k miles on the thing and aside from the thing needing to be buffed and waxed, everything is still in excellent condition.

    Any insights, tips, suggestions or kicks in the ass are welcomed. ^.^
     
  2. serrilion

    serrilion In my own little world! VIP

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    Well I would say trade it up, or atleast look around see what you can get back for it. I'm sure most dealerships would give you a decent price for it, just KBB it to make sure ya not getting ripped to bad. Also look at how much they are willing to give u + what a deal u can get for a car u like + what you owe. Thats my opion
     
  3. corvetteguy78

    corvetteguy78 Well-Known Member VIP

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    Im assuming you took out a 60 month loan and your financing around $26000 total at 9.99%. Lets just say those are the numbers.

    If you can get 6.5% on another 5 year for a 19k loan your payments are around $371/m

    If you can get 72 months at 6.5% then you;d be around $319/m. If you want to keep the car for 7+ years more then try to re-fi with Capitol One for 72 months

    Else your going to have to do a major down grade. Your looking at a trade in value of 15- 17 thousand. You owe $19k that means your upside down $2-4k.

    A 15k car is going to put you right back at 19k after you being upside down and taxes and all those other charges.
     
  4. 95b16coupe

    95b16coupe New Member

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    sell the car, pay cash for an eg hatch. save every single penny you can while you are in the military. trust me on this one. too many people get that "guaranteed paycheck" and spend it all before they get paid again.

    worry about cars when you are stable. it sounds to me that you probably aren't going to stay in the military. get as much money as you can for when you get out.
     
  5. chestercheeto48

    chestercheeto48 Senior Member VIP

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    We just bought an 06 Trailblazer from the dealer with dealer financing at 8.3% apr for 72 mo. because we wanted that exact one and they had some perks if you bought it by the end of that day. We waited 2 weeks and then went to my Credit Union and asked about a Re-Fi. They were more than happy to help us with the loan. I guess they like taking business away from the stealerships. We ended up with a shorter loan 60mo, 4.99%, GAP insurance, and a platinum vehicle warranty for 20.00 less a month than what we were paying. I would say look into a Re-Fi if you are planning on keeping the car for any length of time.
     
  6. 95b16coupe

    95b16coupe New Member

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    ouch! right now all the buyers have the power. do you have bad credit? 8.3% is terrible.
     
  7. chestercheeto48

    chestercheeto48 Senior Member VIP

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    Nope - We wanted a longer loan and that is what they offered. I am right around 700 and the wife is at 780. We knew we would refinance so we signed on the dotted lines. Like I said we wanted to walk off the lot that day with that exact TB. In the end we got a 4.99 and it was no sweat of our back.
     
  8. hondasaurus

    hondasaurus Member

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    sell it, pay cash for older car. u only had that car 1.5 yrs, how long would you keep the new one? my military buds are never home enough to enjoy their new cars. u need better rate if nothing else.
     
  9. phyregod

    phyregod !!YTINASNI

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    Ouch! $26,000 civic?.. ouch.
     
  10. totalburnout

    totalburnout Well-Known Member VIP

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    DO NOT, I REPEAT, DO NOT refinance for a 7+ year loan.

    You are already into a vehicle that is two model years old. If you refinance with a 7year loan, now the car is nine model years old before you're finished with payments. A car is a depreciating asset. You are already upside down in the car.

    If you can sell the car privately and get roughly $18k for the car, sell the car outright, pay the $2k that you're upside down and buy a certified pre-owned vehicle with a $12k price tag. There are some fairly outrageous deals available out on the lots right now.
     
  11. 95b16coupe

    95b16coupe New Member

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    werd.

    the smart thing to do is get out of that payment and buy a car with cash.
     
  12. corvetteguy78

    corvetteguy78 Well-Known Member VIP

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    yeah that advise was only if he plans on keeping the car.....and its a 72 month loan so it would be 6 years.

    If you plan on keeping the car then a 72 month loan is not a big deal. He's looking to save money up front thats the way to go
     
  13. Briansol

    Briansol Admins Admin VIP

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    Who's going to buy a 1-2 year old civic? no one.
    The people who want it, can't afford it.
    The people who can afford it, don't want it.

    It's easier to buy new than to deal with securing a loan on their own. I doubt anyone has cash for that price tag... and if they do, they probably aren't buying a civic.


    trade it in on sometime else... eat the upsideness, or just drive it and pay every spare cent you have on it until its paid off.
     
  14. awptickes

    awptickes unimpressed by you VIP

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    You've done what's so typical of people in the military. I'm sorry to hear your story, but it just gets filed in with the rest.

    You're upside down on it. Let me phrase this so that everyone on the internet can unnasaan. SUX2BU.

    Honestly. It does. You're upside down on it. You've got to keep that car for a long time, or you can dump a couple grand into it to get back on track. Either way, it doesn't matter: You've got the car. Be glad you've got a running car, and you're not back in the sand pit.

    Don't refinance for a longer term, just refinance to get your interest rate lowered. Are you elgible for USAA? You should be. I'd check with them first. You can go about 'fixing' this, but you have to ask yourself "is it right for my situation?" I've watched too many soldiers trade-up their cars forever, and they all lose money every single time. It's sad to see, but it happens, and they don't care, because a lot of them don't treat the money like they've earned it.

    If you can, refinance for a lower rate, however, it would be to your benefit to pay off the upside-down-ness before you even bring refinancing to the table. If you really need a new car, prepare to take the hit.


    If you're Air force, and all this "soldier" shit has offended you, please accept my apologies, and switch every instance of "soldier" with "airman", because it still applies.

    EDIT:
    Just to make sure that you don't think I'm looking down on you because you're in the military:
    My mom is a civil servant, former airforce, making 100k/yr in a GS position, and she's upside-down on her 2008 328i.
     
    Last edited: Jan 15, 2009
  15. 95b16coupe

    95b16coupe New Member

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    get "gap coverage" and run it into a pole or have someone "steal it". problem solved.
     
  16. awptickes

    awptickes unimpressed by you VIP

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    That's insurance fraud. That's "lose your job with the military, and possibly go to jail."
     
  17. Briansol

    Briansol Admins Admin VIP

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    basically, if you buy a new car, you ARE upside down on it from day one until month 40 or so when the value of the car kinda hangs while you're still paying on it.
     
  18. 95b16coupe

    95b16coupe New Member

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    i understand that. and i was half joking. it just puts it into perspective on what his options are.
     
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