January 05, 2007

Hi Tony

I have a 2004 Chevy Cavalier that I purchased through a very high financing company. The vehicle itself was in good condition and I have managed to keep it that way. I have only had the vehicle for approximately 16 months now.

Right now I am paying for nearly triple what the vehicle is actually worth. By the time I'm done paying for it, I would have paid over $30,000 for it. My monthly payments are $419./month, that isn't including insurance and maintenance. For that price and payment I could have purchased a new vehicle.

Also, on my credit report it looks like I have purchased two vehicles, both prices equal to $30,000, that's $15,000 a piece. Well, I only have the one vehicle. That also seems very strange to me.

My main concern is that well, obviously I'm being ripped off! To say the least. That's quite obvious. But, is there a way possible for me to get out of this high finance company without taking a big loss financially?

The company itself keeps wanting to add smaller costs to the price and I am very adamant about not paying those extra fees and have actually had highly verbal disagreements with them over it. I hope to be out of this company by June of this year at the latest. Is that possible? How would I go about it? How much do you figure I would have to save for this . . . honestly? I'm desperate to get out of this company and I need help and someone who may answer me honestly.

I was just so eager to have a vehicle that I didn't realize what I was getting myself into when I signed on the dotted line.

If you can answer my questions, I would be very appreciative. At this time I would like to say thank you and I look forward to a response from you.

Anita M.

Answer:

Hi Anita,

Sounds like you got yourself in a real mess there. The only way out of the loan is to refinance it somewhere else at a lower rate. You need to contact the finance company where the car is financed and ask for a payoff. This is the amount you have to come up with to pay off the loan.

Once you have that amount you can shop around to other banks and finance companies and see if one of them will refinance the vehicle for you. There's a good chance that the amount you owe is going to be more than what some other finance company will want to finance. In that case you will have to come up with whatever amount of money you need to make up the difference.

Also, look at your original loan contract and see if you have add-ons like Credit Life Insurance, Credit Accident & Health or Disability Insurance, an Extended Warranty or GAP Insurance. These are all products that will drive up the amount you owe, but all these things are cancelable and by doing so you can reduce your payoff amount significantly.

You may or may not be able to accomplish this, but paying off the loan is the only way you are going to get away from this loan company. If you can't refinance or pay off the loan the only other alternative is to bite the bullet and to keep making the payments.

Good luck . . .

Tony Iorio