Help on current car loan

[bkjt05]

Maybe you can help me out and tell me if im being srewed on my current loan. here is the story....haha. My car was priced at 11,900 when i first saw it, talked them down to 10,500....added a $1000 warrenty, thats 11,500 total so far, then i put 1000 cash down so thats 10,500 being financed right. well more like 11,500 after all the sales tax etc etc, but if im doing my math right, it should of been about 11,500.Ive paid 16 payments of 280 which comes up to 4500 that ive paid on my car so far. Well when i called today to get my payoff, the lady told me 11,800 was my payoff. i said no the payoff if i was to pay it off today without interest, she said that is it. i said how is that im paying $17000 for a 11,000 car. she said my contract says i pay all the interest no matter what! how is that possible? Im thinkimg in being screwed because origanlly my loan was through first national bank, and for some reason i got a letter saying they sold the loan to this new place? im thinking something got messed up and im taking the hit? anyways i really want to buy this truck, but i know my car isnt going to get a 12,000 for a trade, and i know for sure they wont be able to get me approved if you have to add the difference to the new loan.

in conclusion, if you have any ideas or thoughts about this. please let me know.

 

[MAKG]

Read your fine print. Are you ABSOLUTELY SURE it's interest free? What are the conditions? Did you satisfy ALL of them? Or did you miss a tiny detail in 4pt type?

Selling the loan doesn't matter. It's a contract. Misreading the contract, however, can get you screwed.

 

[canadiancrawler]

Alot of loans and mortgages for that fact have you pay all the intrest off first and the pricipal last. So, unfortunately yes, you pay all the intrest. I am not sure about them selling your loan to a new creditor as I live in Canada and as far as I know, that can't be done here.

 

[bkjt05]

Read your fine print. Are you ABSOLUTELY SURE it's interest free? What are the conditions? Did you satisfy ALL of them? Or did you miss a tiny detail in 4pt type?

Selling the loan doesn't matter. It's a contract. Misreading the contract, however, can get you screwed.

i dont have it in front of me, its at my parents locked up in the files, but im going to go check it out! I just dont understand how i would of not caught a screwd up contract like that, i mean how do you pay 17000 for a 10000 car, that means im paying almost 60% more then its cost! actually i just did the math. on a 72 month loan, im paying $280 monthly which means im paying a total of 20160 for a car costing 11,000

 

[Bow_Extreme]

Your loan

If the loan states "simple interest", you will pay all the interest.

 

[bkjt05]

If the loan states "simple interest", you will pay all the interest.

god i hope i didnt sign a loan like that. i just dont see why in the heck id sign something like that. pay 20000 for a 10000 car...doesnt make since! its not like i had bad credit or anything, it was my 2nd loan and i had good credit with a co signer

 

[JohnnyO]

If my math using your numbers is roughly correct, you have a 5 year loan (60 months) at $280 a month so your Total Of Payments will be almost $17,000.
This number will be on the loan contract. If you borrowed $11,500 then the interest that you pay is $5500. Your $280 a month will pay down the $5500 first, then when that's gone it will start being applied to the principle of $11,500. $5500/$280 = about 20, so your first 20 payments will be on the interest only.
Basically on a 5 year loan you don't want to even think about trading in until you've paid on it for at least 3 years. Also as you're paying on it, it depreciates. Most cars are lousy investments.

 

[bkjt05]

If my math using your numbers is roughly correct, you have a 5 year loan (60 months) at $280 a month so your Total Of Payments will be almost $17,000.
This number will be on the loan contract. If you borrowed $11,500 then the interest that you pay is $5500. Your $280 a month will pay down the $5500 first, then when that's gone it will start being applied to the principle of $11,500. $5500/$280 = about 20, so your first 20 payments will be on the interest only.
Basically on a 5 year loan you don't want to even think about trading in until you've paid on it for at least 3 years. Also as you're paying on it, it depreciates. Most cars are lousy investments.

its a 72 month loan. the thing is. i dont think i would of signed a contract like that. im going to go get into my parents file cabinet in a bit and get it to read it over and over again, but i honestly think that when the origonal bank sold my loan to the new place, somehow they changed my contract. i got a letter saying the loan was sold, nothing was changing, just a new bank to pay! i think the new bank is trying to screw me!

 

[Jason]

If you bought a car and the dealer took care of financing, you signed a simple interest contract. I work for a dealer, used to work for a few others, it's the same almost everywhere.

 

[MAKG]

Well, this REALLY sounds like you didn't read the fine print. Check it out.

Virtually every loan substantially increases the cost of the object. Home loans are even more fun. Even at 5% (which was just about the best you could possibly do in the last 100 years), a 30 year loan just about doubles the total cost.

It's a fact of life. No one gives you money for free.

 

[Will]

Used car places sell people cars that can't afford them. People that REALLY can't afford them.

How come a kid your age is financing a $10,000 car? My first car was $150 and I paid for it with money from washing trucks, changing oil and mixing fertilizer in tanks. Now everyone thinks they have arrived when they haven't done jack shit.

 

[BLOODBANE]

Always ask on any loan if there is a penalty for early payoff. My new truck loan will equal out to around 25k, if I pay each 400.00 payment. I made sure it could be paid early. On the house I have in Gunnison I financed 55000.00, total repayment at 30 years would have been 112,000.00. Yep double the amount. I paid it off this last spring so the bank(GreenTree) lost a lot in interest from me(I have only owned the house for 11 years). Good luck, its a PITA dealing with most banks...........

 

[bkjt05]

Used car places sell people cars that can't afford them. People that REALLY can't afford them.

How come a kid your age is financing a $10,000 car? My first car was $150 and I paid for it with money from washing trucks, changing oil and mixing fertilizer in tanks. Now everyone thinks they have arrived when they haven't done jack shit.

not to be a jerk about this, but im not your normal 21 year old male. i have my priorities strait and i know what lifes about, dont get me wrong, i do go out and have fun, but not on days i work, i havent missed a day of work for calling in because i partied to hard, i dont even think ive missed a day being sick, only time i missed work was when i was emitted to the hospital. i make 40k a year at 21 years old working for Pepsi. Well not 40k, but 35k according to my last check stub. a 10k car isnt bad!

 

[bkjt05]

ok lets say i didnt read the fine print and have to pay what i have to pay, what do i do to get into a newer car without them adding 5k from my current loan to my new loan. I sitll owe 12k approx and blue book is 8k trade in value, that means they will add the 4k extra to the new loan, but what bank wants to approve a loan like that? would it be better to buy a brand new truck so they know they are investing in something worth it, or a used truck for cheaper, but then adding the difference?

what are my options on getting into a new car that im happy with? by thw way im looking at a 2003 Ford Ranger FX4 level 2 with 35k miles...MINT...asking price 14k.

 

[MAKG]

It's 25% of your annual income. And the dead giveaway that you CANNOT afford it is that you financed it.

For comparison, I paid $2000 for my Exploder. Getting my Bronco II cost me nothing and cost the previous owner almost $200 (expired tags). The Chevy was less than $1000.

Spending money on a vehicle is always equivalent to throwing it away. Financing a vehicle compounds the mistake. You assumed you got the money for free. Well, you didn't.

My first car was a $300 1975 Impala with a caved in rear and good 350/350. I guess I splurged compared to Will.

And my second car was a hand-me-down 1978 Mustang II.