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Discussion in 'Credit Talk' started by My2kGT, Jul 21, 2001.
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If you cosigned it, you're responsible for it, so if they can't collect from the person who took out the loan, they can try to collect from you.
I hoping someone can answer some of my more specific questions.
There's a possibility they can take you to court, but very unlikely. Very rarely have I heard them (Ford) going after the main car owner much less the co-signer. Your credit report will take a hit though. A very big hit. The account will be reported as an R8? (repossession) and establishing new credit could be more difficult. Also, any current creditors could possibly raise your rate higher if they pull your report and see any derogatory information on it. I hope everything works out for you.
My family has dealerships and I have had a lot of expierence with Ford Motor credit. I do know that they will attempt to garnish the wages of a co-signer, I have seen it done.
They are good to work with, however. Usually they will negotiate a settlement with you. The last one I worked with, the car was sold at auction and the co-signer paid the difference between what the car brought and the balance owed (plus a few processing and transportation fees).
The best way to deal with them is to call in directly and work with them right off the bat. They should appoint you with a counselor and you won't have to deal with a regular CSR.
They WILL NOT remove a co-signer, ever, from an account, no matter what the dealer tells you. I have heard that one told a million times.
Your best bet might be to pay off the balance and sell the car. The repo will look really bad on your credit. Although, if you take the R8, Ford does have a re-establish program. It's essentially a high down/high interest lease program, progresive over two year increments.
Hope this helps!
TELL THE PRIMARY TO PAY UP, WHY SHOULD
YOU SUFFER FOR HELPING THEM IN THE 1ST PLACE,
WHAT ARE THEY GOING TO DO NOW, RIDE A BIKE??
A REPO IS THE DEATH KNELL OF CREDIT,
IT'S WORSE THAN A BK!!
They will repo the car, sell it, and expect you to pay the difference. Yes, they will take you to court for it if your state allows the collection of deficiency balances. That I don't know.
Take the car and try to sell it yourself. Get as much as you can, put it towards the loan. Pay off the rest. All of your current creditors check your reports periodicaly for negative info, if they see a repo, they will raise your rates, close you account, lower your limits - stuff like that.
What happens if they get more out of the car than you owe?
Who gets that money?
YOU GET IT...but they would probably INVENT a "PROCESSING" fee...$300 left over - $250 processing fee...You get a $50 check?
Ok this brings up an interesting question. What about a redeemed repo? (yeah I had one, bastards couldn't wait three days for me to get $800, I had been behind on my payments due to job loss. Chrysler, BTW...) I redeemed it by paying up. They had been reporting it as an r9 though I've paid perfect for the last two years. So how bad is a redeemed repo? as bad as a repo? I got them to change my equifax rating to "pays as agreed." Not sure how it looks on the other two bureaus.
The odds of 'getting more' out of the car than you owe are VERY low. A vehicle is not an investment, very few people owe less than it is worth.
Dealer's call it being 'upside down', meaning you owe more than a car is worth....which, again, is most of the time. The difference can usually be hidden in discounts and rebates during a trade-in, so you usually don't know it. They want you to think you are 'making' money on your trade...it looks like they are 'paying you' for it. Plus, it betters your chance of financing when you are in an equity situation. And contrary to popular belief, they do want you to get financing, right there, on the spot. Gives you less of a chance to change your mind.
Now, repo's are taken to a special auction. Depending on the finance company, it is usually for lisenced dealers only. Not only do dealers want to 'steal' the car, meaning they are only going to pay less than wholesale value, but, repo auctions tend to have cars that are 'rough', meaning they have been treated poorly. Think about it, if you know they are coming to take your car away, are you going to treat it with a white glove?
Even if your car is in good shape, the simple fact that it is a repo is going to drop the value around 15-25%.
I'm not saying it doesn't happen, but I've been around the car businees a long time and I have yet to see it.
It can happen if somebody pays $200 extra towards principle every month, then loses their job...
They could have taken care of the "UP-SIDE DOWN" problem...
I don't think you can pay extra towards principle with a car loan, it will just be treated as an advance payment. The individual would be paid ahead however many months.
SS is right. My hubby used to buy those cars and fix them up and resell them. The standard opinion when buying repos at auction is, "if they didn't have money to make the payments, they didn't have money for maintenance", therefore the car will not be in good mechanical shape.
SINCE I NEVER FINANCED A CAR...I didn't know you couldn't pay EXTRA principle like with a MORTGAGE...
I recall many many years ago when I used to pay extra on my car loan....I used to send a seperate check marked to apply to final balance or payment or something like that. The bank is the one that gave me the wording. You have to specify that it is for the back end of the loan though.
I don't know if they still allow you to do that.
My mortgage payment coupon has a space for EXTRA PRINCIPLE...I assumed the car loan would be the same way...
It really depends on how the loan is calculated, i.e. 'Simple interest', etc.....
On most car loans, extra money is just treated as a future payment.
When I was in college, and made most of my money in the summer, I would make a 'lump' payment before I went back to campus. The bank would then calculate and say 'you don't have to make a payment until December' or whatever.
I am not saying this is how all auto loans are done, but the majority are.
Also, it seems very few people pay extra on their car payments as most people just 'expect' to always have a car payment. For some reason they pnly think in terms of their next car/loan, not the goal of paying it off.
hell I can't wait to pay off this damned car. 8 more months. Then I am going to buy a bus ticket till I have the money to pay cash for a new one. I could've bought TWO by the time I'm done paying it off.
I am starting to get a potty mouth here. Someone slap me.
Good points, Shawn.
I wish I had known such matters when I bought my car. I still have neg. equity in it, and I am just about to begin making extra payments on the car. Eventually I will move the neg.equity to a credit card ina BT deal - as that will ultimately be cheaper than what I'm paying now.
The biggest lie I was told by the manager arranging my financing at 23% was that I would be able to refi "no problem" the next year.
Well, I'll let you guys in on a little 'secret' about me....I used to do 'f&I', 'The Box', yup...car financing.
i said before that my family owns dealerships...well, half of them. My parents split when i was 5...my dad went on to be a prosperous Dealer Principle and my mom became a social worker and proud single mom of two. My sister and I lived, very humbly I might add, with my mother. Well, long story short, when I turned 16, I wanted a new car, so i resumed contact. it wasn't long before I saw how the other half lived and left college to become......a car *****...oops, i mean salesman.
Anyway, I did F&I, Finance and Insurance. I was an ass. I can admit it now....although I am embarassed about it....but here are some of the things we did...and to watch out for.
NEVER negotiate a 'Trade price'....i.e. We weill 'trade; you for this difference. Thats where we hid the figures, assumed money down we didn't tell you about...etc. Get a firm selling price for what you are buying and get a firm ACV (actual cost of vehicle) for your trade. If they won't give you these figures, they are hiding something. Plain and simple.
NEVER, NEVER, tell them a payment. I LOVED payment buyers....you would come in and say 250.00 a month....i would walk all over you and you would leave at 275-300 and happy.
watch the 9's.......If the APR was 7.9, i would make it 7.99 or 7.999.....doesnt sound like much, but over the life of the loan i would pick up a few more bucks.
Get your first payment DUE as soon as possible. i would say 'hey, i can make it so you don't pay a payment for 90 days'. You would love me. I just made another 700.00 in interest. make your first payment due in 15 days, thats usually the minimum.
Don't be a 'get me bought'...some people didn't care about the rate, they just wanted a loan. they would go out at 23.999 (State law had to be under 30) even though buy rate from the bank was never over 16% (that will vary place to place, state to state). Delaers know local banks are crap, BUT, credit unions are usually gold to their customers and usaully match any rate. When the dealer brings up financing, ALWAYS say 'Well, my credit union gave me a good deal and I think I am going to use them because I bank there'. The majority of the profit is made on the 'back end', Financing and Insurance, so the dealer will ALWAYS fight to get you to finance with them. If we even THOUGHT you wer egoing to finace somewhere else, even with bad credit, we would 'Roll' you, meaning send you out with the financing contract signes even if we had to co-sign for you. And don't be fooled by that, almost every state and bank allows the dealer to co-sign for you.
Warrantys (extended warranties) are NOT bad. HOWEVER, paying too much for them IS bad. Negotiate with the F&I guy. He gets commision on the amount as well as the number of warranties he sells. Ask him to see cost and offer 50.00 over. That is a good deal. I would take that as an F&I guy in a heartbeat. A warranty is usually only a few hundred bucks, pay for it separately if you can. It will save a lot in interest.
Insurance is usually not needed unless you are older and truly need it. In all my dealership dealings I never saw one Insurance policy paid out...no one ever needed it.
A dealer CANNOT make you buy a warranty, insurance, Lo-jack, ANY add-on whatsoever. It is against the law. I have (ah-hem) seen many a people led to believe they needed to buy them to get the loan. It's a lie.
If the F&I guy gets out your credit report and hilights bad stuff, he's setting you up. I would take someone with bad credit and mark-up their report with highlighters...all different colors...and show it to them saying 'wow, this took a lot of work to get done' etc...then they said nothing about the high rate.
I have plenty more but this is FAR too long already. I am a much better person now, I promise. Trust me, I paid for what I did many times over.
I will help out anyone looking for a car. I pretty much know how to get financing (for a car) and how to massage the rate, terms, etc. I can also help with trades and costs to some extent.
Everyone on this board has been a help to me, I have no problem giving something back.