Keep or Redeem??

[sco0437]

Hi Everyone,

I'm really in a bind and trying to decide if i should reaffirm or return my car. What do you guys think? I have had my 341 and should be discharged at beginning of Jan.

07 Mazda 6 with 36k miles.

I owe 15,300 on it... present kbb private party is 10,900. Ive been the one owner.

4 years left of payments at 380 per month at 12.3% interest.


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The other option I was considering was getting into a car for around 10k at 18% interest.. like an 08 Hyundai with 28k miles and paying it off in 3-4 years that was I would get out of the negative equity.

The dealer said I would need a letter from the trustee giving me permission to take out the loan? Is that normal? My atty didnt say anything about that

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Thanks for any help or info!!

[aces67]

you'll need permission b/c you aren't discharged yet but at 18% it won't take long and you'll be upside down again. You may considering just doing a ride through and then let it go back when you can get financed with a lower interest rate.

[sco0437]

Aces67,

A ride through on my current vehicle? If so, my rate is 12% and doubt I could get a cheaper rate or if it would be worth it.

12% interest rate compared to 18% may be better, considering im 5k neg equity.

Getting a vehicle at kbb value now, paid off in 3 yrs at 18% might be a decent deal? dont you think?

[justbroke]

12% interest rate compared to 18% may be better, considering im 5k neg equity.

Paying 18% on $10K for 3 years is almost a wash compared to your current $380/month payment. The payment on $10.9K for 3 years @18% is about $394/month.

The key is, how many months are left on your current loan @12.3%?

I think aces is trying to say that you'll "pay" for the negative equity anyhow.

Edited to add: I see that you have 4 years on the 2007, you would save a little (about $2.9K over the 4 years), if you took another 4 year loan @18% ($320/month).


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48mo. @12.3% ($380) = $18,240
48mo. @18.0% ($320) = $15,360

[sco0437]

Why would it be a good idea to reaffirm a car that has 5k neg. equity?

The only good things I can think of are: 12% rate, 36k miles, ive been the only owner.

Im looking at getting rid of the mazda with a 60k warranty for a hyundai with a 100k warranty

[justbroke]

Why would it be a good idea to reaffirm a car that has 5k neg. equity?

The only good things I can think of are: 12% rate, 36k miles, ive been the only owner.

Actually, the 18% loan may be better in the end. You'd save about $3K over the 4 years or about $60/month. You just need to do the math for yourself. You then need to factor that the Mazda at 36K miles is probably a lot better than the Hyundai at 28K miles.

Look at Edmunds.com to compare the brands and whether a 100K Hyundai warranty stands up to the Mazda's 60K warranty. Make sure you understand what it covers (bumper to bumper or just powertrain). Sometimes, you'd be surprised what it doesn't cover, and that's the key piece that will fail. Also, if the Hyundai is used... from what I understand the warranty drops to a 60K/5year warranty. Plus you should wonder about resale values should you resell sooner than the warranty expires. Things to think about.

No, I don't sell cars, and never had. But I have bought a few!

I'm not making any particular push, just want you to do the right thing.... for you.

[sco0437]

Justbroke,

Thank you very much for your comments. I guess im just nervous about making a stupid fianancial decision by reaffirming when already negative.

I also want to see if Madza Credit will reaffirm for less than the 15k I owe.. since its worth about 10k.

Thanks!

[justbroke]

I updated my post above. I know that I may not be helpful in selecting, but at least you'll be armed with the right information to make an appropriate decision for you.