March 04, 2007

Hello Tony

I just filed bankruptcy last year and it was discharged in October. Around that time I bought a 2003 Ford Windstar for $13,000 at, I think 23% interest! Yeah, it's high, but I needed a car badly.

I just received a "blank check" - one of those things that lure people in, so I went into the dealership. My credit is very poor and I owe more on my vehicle than it is worth. Over the phone I told them I preferred a Toyota 4x4.

I get there and he shows me a Nissan with over 100k miles and I said "no," so he showed me some new trucks, I told them I have a family of 6 and if I was going to trade my van in on something I want it to fit ALL of us. So he shows me some new 2006 minivans and after being there 4.5 hours the finance guy comes back and says I got approved.

All I want to know is what my new interest rate is. Well, he says they can't get me into the new 2006 van but he can get me into a 2006 Ford Taurus. I don't want it and I told him that, and I told him why. I have negative equity on my current vehicle (getting rid of it for newer one and lower interest rate) I asked if they had any other cars they could trade that in on and he said "no."

I told him that it didn't matter to me, I'll go home with what I have. After showing me a mini van that is 1 year newer with more miles I said no, why would I want something with more miles. We went back into the loan guys office and said give him until Monday to see if they could find something. I told him he could take until Friday if he wanted, because I don't want to buy something I am not really wanting.

Why can't I choose what car? Why does it have to be certain cars? Is there anything I can do to get what I want even with a score of about 580, 1 income and a trade-in that I owe more than it is worth?

He said he couldn't tell me an interest rate until I found a vehicle, is that so? He also said don't go anywhere else and have my credit ran, because the deal he has right now wouldn't be good if it was ran, because it lowers the score and then it wouldn't go through.

I understand some of the crap they are telling me is junk but it is sorting it all out so I can be in control or am I sort of in control because I didn't buy right then and told them they could take until Friday?

The thing they don't know is I don't really care if I get into a vehicle or not, I am perfectly content with what I have and am not really in a hurry to buy because I know exactly what I want.

Help with any advice please. Sorry for the long email. Oh, they said I had to have $5,500 down for the new vehicles.

Jeff G.

Answer:

Hi Jeff,

Look Jeff, tell these guys to get lost. If you think for one minute they care about doing right by you then you need someone to throw cold water in your face so you can snap back to reality. These guys only care about putting a deal together for their own profit. They could care less about what you want or need.

OK, so you had some credit problems and you have a high interest rate. If you buy another vehicle right now you're still going to have a high interest rate, plus the new loan will not only be for the amount of the new vehicle, but you'll be refinancing part of what you owe on the Windstar, because as you know, you are upside down on what you owe. Probably by $6,000 or more! Plus they want money down to boot.

It makes absolutely no sense at all for you to trade.

Keep the Windstar. Pay it off, and down the road you can get yourself into a more reasonable deal. If you're not patient with your credit situation you'll never regain a good credit rating.

If you get any more of those promotional deals in the mail throw them in the trash where they belong. They are worthless, and only a marketing ploy to get you in the door so they can rake you over the coals.

All my very best...

Tony Iorio