I am stuck in a ridiculous car note and paying mostly interest this past year Help

Damn lmao should've have stuck with a car in your price range.

Ladies like nice cars though, even if you’re broke

Once you get a dime chick then go back to the beater car

math wrong wrote:

So he paid almost $4000 in interest on a 26k loan, that’s like 15% interest rate?

The loan wasn’t 26k. That’s what he owes now.

And interest rate is over the life of the loan, it’s annual.

Looks like he borrowed $41k at 9% for 5 years.

That would be $10k interest over 5 years.

After 3 years, he’s paid about $8k in interest so far.

Let’s say the car is worth $20k right now.

He’d need to come up with $6k just to sell the car.

If the bank repos the car, they still come out $2k ahead.

But it still dings his credit badly. And he wouldn’t even be able to get 9% next time.

No the bank does not come out ahead. They will have a car worth less than what they are owed. they will also have the labor involved with repossessing it and selling it.

car note trouble wrote:

Nissan Maxama 2017 SL, added gap insurance and other stuff equals 41 thousand. Gap insurance is a must!

Gap insurance means you’re home free if the car is totaled or stolen.

Options I listed in my first response.

They weren’t suggestions, they were options.

My first suggestion is go to a dealer, find a cheap car you can live with and see if they will make a deal on a trade.

That probably won’t work or it will be another pretty high payment.

My only practical option is to call the lender and tell them to take the car.

They are telling you to stick it out and keep trying to make payments because they get more money that way.

But if you don’t have the money, you can’t do that.

The guy keeps piling on. He is trolling. Gap insurance is just more money that idiots throw away and then can't even make routine payments. I have purchased 32 new cars and never carried more than liability insurance. I estimate that I have saved $200k in insurance premiums through the years. Someday when I total a car, I will still be $160k ahead.

Faster than ever wrote:

No the bank does not come out ahead. They will have a car worth less than what they are owed. they will also have the labor involved with repossessing it and selling it.

In my scenario, the bank made $8k in interest.

They wholesale the car and get $20k on a $26k debt for a $6k loss on that transaction, but a net $2k gain.

Furthermore, they make money on the vast majority of loans and lose money on some for a net profit.

It’s a risk management businesses.

They base interest rates understanding dive loans will default.

It’s not immoral to default if you lost your job.

And you get hit with bad credit.

Believe me, lenders are making out on these loans.

pawn it

Faster than ever wrote:

The guy keeps piling on. He is trolling. Gap insurance is just more money that idiots throw away and then can't even make routine payments. I have purchased 32 new cars and never carried more than liability insurance. I estimate that I have saved $200k in insurance premiums through the years. Someday when I total a car, I will still be $160k ahead.

I don’t really advise getting gap insurance but he has it now and it would cover him if he had a total loss.

You must have comprehensive insurance if you finance a car.

Your comments that you never carry more than liability coverage means you never finance a car.

Therefore your input is useless to this discussion.

Just another person saying he should have done something different years ago.

That is a disgusting way to view things. So what if a company makes money on the majority of loans? That has nothing to do with your loan. Using that immoral logic, you can put a watch in your packet next time you are shopping at Walmart because they will still have a net profit from the 100 watches they sell that day. And interest is not profit. I have made 10% on my money over the past 5 years. That is lost if I loan it to you at 6%. Even worse, you think you can pay me 6% over the first 3 years and then give me something that is worth much less than what you still owe me. If everyone honored their commitments, interest rates would be 1/2 of what they are. I am paying and everyone else who pays their bills, is paying for the deadbeats who don't care. Guy like you are causing the destruction of our financial system.

Huh? My input is useless because I make the correct decisions? That is like saying you won't listen to your professor in your MBA program because he made the correct decisions and he is teaching you how to do the same.

Faster than ever wrote:

If everyone honored their commitments, interest rates would be 1/2 of what they are. I am paying and everyone else who pays their bills, is paying for the deadbeats who don't care. Guy like you are causing the destruction of our financial system.

Interest rates are incredibly low right now.

Especially for those who honor their commitments. Like me.

I have a 6 year 0% loan on my car.

Not sure how things could be better.

Faster than ever wrote:

Huh? My input is useless because I make the correct decisions? That is like saying you won't listen to your professor in your MBA program because he made the correct decisions and he is teaching you how to do the same.

Your input is useless because the OP is asking what to do now and your response is to change the past.

Use the car to get another job.

Sell the car and use the proceeds on the loan.

Structure a payment plan with the lender to pay off the remaining balance.

Get a used car in the $8-10K range.

Never buy a car for that much again.

Profit.

X-Runner wrote:

Faster than ever wrote:

No the bank does not come out ahead. They will have a car worth less than what they are owed. they will also have the labor involved with repossessing it and selling it.

In my scenario, the bank made $8k in interest.

They wholesale the car and get $20k on a $26k debt for a $6k loss on that transaction, but a net $2k gain.

Furthermore, they make money on the vast majority of loans and lose money on some for a net profit.

It’s a risk management businesses.

They base interest rates understanding dive loans will default.

It’s not immoral to default if you lost your job.

And you get hit with bad credit.

Believe me, lenders are making out on these loans.

The bank won't get $20k auctioning that car off. $22k is probably retail on that. Probably more like $15k. The OP will then be responsible for $11k plus the expenses to take it to the auction.

X-Runner wrote:

Faster than ever wrote:

If everyone honored their commitments, interest rates would be 1/2 of what they are. I am paying and everyone else who pays their bills, is paying for the deadbeats who don't care. Guy like you are causing the destruction of our financial system.

Interest rates are incredibly low right now.

Especially for those who honor their commitments. Like me.

I have a 6 year 0% loan on my car.

Not sure how things could be better.

You have “0%” on your car because the automaker needs to move the cars. The bank is likely tied to the automaker if not owned by the automaker and getting a cut. No bank is loaning money 6 years for free. If you paid cash, you’d certainly have paid a lower price.

But yes, rates are low.

And to the other poster, defaulting on a loan is not the same as stealing. It’s not illegal, as a a default is built into the loan contract. This is why nearly every loan requires a credit check.

Lenders let borrowers roll negative equity into used vehicles all the time. The lenders have a loan to value ratio that guides how much you can roll into a used vehicle. Generally, LTV is capped at 115%. Dealers can usually help goose that number by selling the vehicle under the appraised value (NADA or whatever the lender uses) to give you more of a leg in the deal to fit in negative equity. If you negotiate your but off, you may be able to get the deal done. So, if the OP buys a used Civic for $14k that has a $16k book value, LTV is $18,400. That will allow $4,400 in negative equity to be financed. The dealer may also over allow on the trade to make up the difference. The dealer makes up the difference on the finance reserve on the interest rate. Or, you could just go with a new Civic for $20k+ and have higher monthly payments. It will still work out to a lot less than $850 a month because you are spreading the payments out and hopefully getting a lower interest rate.

Dealers do not sell used vehicles for more than new vehicles. You may see pricing on the internet for domestic vehicles that looks screwy. But that is just because the domestic manufacturers have a lot more padding on invoice and MSRP and drop a lot of incentives/rebates on new vehicles compared to imports. In the end, the dealer will heavily discount the used vehicles off the asking price as soon as a customer starts showing them KBB numbers, etc. It is just that dealers are not allowed to advertise discounts on used vehicles in most jurisdictions because there really is not such thing as a retail market value for used vehicles.

It is illegal. It is a breach of contract. If the bank knows that you are a millionaire but just walked away from your contract, they will take you to court and win.

You wrote a lot of stuff there but forgot to consider that the OP doesn’t have a job and they don’t finance cars for people without jobs.