Should I reaffirm my vehicle loan?

[tod183]

I have a 2006 Toyota Corolla with about 82,000 miles. It is financed through Wells Fargo, and the payments are not current. They sent my reaffirmation documents knocking the balance from $15,000 to $9,400 and the APR went from 17,24% to 8%. My payments would go from $386 per month to $207 per month, for 54 months. What do you all think? It seems like a good deal to me, though not a great deal. I'm not sure if I want to have $207 a month payments for 4.5 years, but I'm afraid if I don't take it I may end up with worse terms later...

We had planned on giving the car up before we saw the reaffirmation papers. The way I feel is that what they offered is right in the middle. Not good enough to make me jump, and not bad enough to repel me. Just enough to tempt me! Would you all reaffirm???

[dumpinmydebt]

I'm not sure if I want to have $207 a month payments for 4.5 years,

I wouldn't take it.

We are not reaffirming our car loan with Chase. We plan on riding through and giving it up in around a year, maybe less. We want a complete fresh start. And the next car (used) we buy we will have a very large down payment. We could actually buy with cash, but, were getting a loan to rebuild credit, but it will be a very small loan(we're talking $5k max).

After that, we're buying cars completely with cash. I hate car loans.

I'll admit that the deal is pretty nice, but I just wouldn't want to be tied down to that for 4.5 years. Just a risk I wouldn't be willing take.

If you feel the least bit uncomfortable about it, I would advise against taking the deal.

[SMinGA]

Its a hard call to make. If you don't reaffirm, you must either catch up or be prepared to let the car go very soon.

Does this agreement, if you go with it, make the loan current? What condition is the car in? If its in sound shape, I would probably take it. It does make you responsible for the balance - but odds are if you buy a used/older vehicle for cash it will cost more between purchase price + maintenance costs pver 4 1/2 years. Or after BK you'll finance a $5-8k car @ 20%+ APR and it may still need maintenance work. Total to pay off w/ the new agreement, thru the 54 months, is just over $11k.

[drowning123]

If you're worried about how you'd purchase another car after BK, then go for it, just for your peace of mind. Bear in mind that by the time you are done paying for it, it will be 8 years old, actually 9, since the cars are available a year before their model year. If you get something else brand new now, by then it would only be 4 years old. Problem is, I don't know if you can get something brand new for $200 a month.

[tod183]

If we do give it up, my wife and I will carpool in a '94 Corolla for a few months until I can either by a used car outright, or make a good downpayment on a used car. I'm thinking a $4,000 to $5,000 used car...

[drowning123]

Oh, so if you have two cars, then what's the worry. It might be a little inconvenient, but sometimes you have to make sacrifices. Get rid of the Corolla then.

[tod183]

Oh, so if you have two cars, then what's the worry. It might be a little inconvenient, but sometimes you have to make sacrifices. Get rid of the Corolla then.

I'm kind of leaning with you on this one. My wife's not too happy though!

[IBroke]

I have a 2006 Toyota Corolla with about 82,000 miles. It is financed through Wells Fargo, and the payments are not current. They sent my reaffirmation documents knocking the balance from $15,000 to $9,400 and the APR went from 17,24% to 8%. My payments would go from $386 per month to $207 per month, for 54 months.

The question is: What's the current value of the car? If it's close to $9,400, it doesn't really matter if they set up 54 months on the payment plan because you will always have the option to either sell the car or trade it in. It doesn't mean you have to keep the car for 54 months.

In addition, I would arrange that they continue the monthly reporting on that loan in case you reaffirm.

[tod183]

According to Kelly Blue Book:
Private Sale: $7,530
Trade-In: $5,675

According to NADA:
Rough Trade-In: $5,325
Average Trade-In: $6,275
Clean Trade-In: $7,050
Clean Retail: $9,425

The Clean Retail is the closest one to their number.

[dumpinmydebt]

If we do give it up, my wife and I will carpool in a '94 Corolla for a few months until I can either by a used car outright, or make a good downpayment on a used car. I'm thinking a $4,000 to $5,000 used car...

My husband and I lost our 2nd car 2 1/2 years ago and we've been carpooling since. I'm sure you can do it for a few months.

[UghUghUgh]

I would not keep a vehicle with miles that high, especially if the payments had to continue another 4-5 years. This is when all the trouble starts.

[tod183]

Thank you all for your advice. I don't think we'll reaffirm. Now I just have to convince my wife!

[IBroke]

I would not keep a vehicle with miles that high, especially if the payments had to continue another 4-5 years.

As I said before, there is no requirement to keep the car that long. At the offered interest-rate, the gap between value and loan-amount is going to get smaller quite fast.

I think this car-loan - when reported every month - is a good opportunity to rebuild credit right from the start. The interest-rate is far from what is considered high right after a BK so I don't think you can go wrong by reaffirming. Just make sure they are going to report your payments - I'd make credit-reporting part of the reaffirmation agreement.

[dumpinmydebt]

Thank you all for your advice. I don't think we'll reaffirm. Now I just have to convince my wife!

LOL! You can always just ride through. That's what my husband and I are doing with Chase. We're going to keep paying on time and keep it until we have enough money to get a different car.

[tod183]

LOL! You can always just ride through. That's what my husband and I are doing with Chase. We're going to keep paying on time and keep it until we have enough money to get a different car.

I'd be much better off reaffirming or getting rid of it. We're way upside down on our loan, and we're not current.