This Poor Guy is Paying 34% Interest!

Hi Tony,

I recently bought a 2002 Toyota Corrola for $9,000. The interest on the loan was 34.04%. Long story short I owe $19,000! I recently called to check the"payoff" on the car and they said that it was $12,000. I dontknow what's going on.

Is this even possible? What should I do? I'm trying to pay it all off and get a lower APR, but I certently dont want to pay $12,000 on a car that is not even worth $9,000.

Can you PLEASE give me some advise on what I should do?

Thaks a lot,

Manuel F.

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Hi Manuel,

Your payoff reflects the price you originally paid for the car plus the sales tax and the title fees. There may also be an extended warranty and or credit life insurance, credit disability insurance and gap insurance that the dealer added to your loan. All of these things will raise your car's payoff.

A warranty and these insurance coverage's are cancelable, and will reduce your total payoff. Read the loan contract to see exactly what they added on.

There may also be an early payoff penalty by the lending institution added in. Read the fine print on the loan contract to find out. If you don't have your copy of the loan contract, or you don't understand it contact the lending company and ask them to go over it all for you.

All my very best to you...

Tony Iorio
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