Okay, well heres the scoop ) After finding out the estimate on repairing the car came to $12,000 they have now decided to total it. After figuring all expenses I'll have $25,032 to pay off the loan and I owe $25,910. I just refinanced it in Feb. and have only made one payment, huh! They say I can pay off the difference or roll it over into a new loan. I refinanced it with Cap One. I don't know whether I should reapply with Cap One or try dealer financing. I have some concerns with dealer financing as hubby just started the new job a few weeks ago (been in the same field for over 7 years). Anyone have any suggestions?
Somebody mentioned "GAP" insurance months ago...you didn't have it??? It pay the difference between what you owe and what the car is worth in case of an accident...
If you refi'd with crap one, you probably have gap insurance and don't even realize it. Look over your contract carefully, it should be on the first page of the agreement.
I would check with the dealership. Many of them are still offering special financing offers (although I've noticed to get that 0% special, you have to finance for 36 months most of the time), and you could also look to your local bank or credit union. I've financed my last two cars from the credit union, and I just have the car payment automatically deducted from my checking account each month. That shaves .25% off my loan just for the autopay, which helps me save a little extra money. Good luck!
Gap coverage is offered by the Finance Manager. It is not something that's automatic. It does not cover the total loan. It covers the book value of the vehicle. To cover the total loan, you should ask for GAP PLUS on your next purchase. It covers the total loan and your deductible. Also, if I understand the original post, you will only have a balance of $878. Is that correct? If so, you can roll it into your next auto loan, or just pay it off in a lump sum to avoid paying any additional interest. I suggest agreeing on a final price and having the dealership pay it off if they want to earn your business. Please consider this also. If you do not have an immediate need for a vehicle and everything I've said is true, wait until the 25k payment is reported by your lender so you can benefit from the increase in score. Otherwise, you may get stuck with a low interest rate because of the weight of that 25k balance appearing on your credit reports. CardKid
Sam, Many dealers use Capital One for financing. Guess who pays the finance manager's salary? The "back-end" or points they make on getting you a loan. The average is about $1700 on the back-end. So, the dealer may not be the best source for financing your auto. When you consider that the average vehicle has a markup of $3200 and a back-end of $1700, you're financing an extra $4900 in dealer profit. I suggest getting financing before you go to the dealership (ie. pre-approval via the credit union or local bank). But, before applying, make certain that you've done your homework on the vehicles you're interested in. A good resource is www.edmunds.com. A better resource is a friend that's in the business that can take you to the dealer sales (wholesale) or can provide you with the "black book" value of the vehicle you're interested in (what the dealers use to bid on that late model car you've been looking for). CardKid
