Financing a vehicle.

[Canadian Rider]

I realize this may be a dumb question.. but I need to ask because I think about it every day. And most people don't get where I'm coming from because they are not "car people" they drive a vehicle to get around and not because they like it. So here is a question with a little back story.

In sept 2011 I traded in my one and only love, I mean my truck. It was all a very rash decision because I was going to be commuting between Kelowna and Vancouver. I was thinking fuel mileage so I ended up picking a 4cyl GMC Terrain AWD. It got pretty good mileage for it's size and the AWD worked great in the winter on the Coq. The only problem is that almost as soon as I had the new thing in my possession I regretted my decision.


to make this simple the cliff notes are:
-made an impulse buy on a big purchase I regret.
-I am now not commuting anymore which makes having the terrain even more annoying.
-the payments were quite a bit lower on the truck since I carried negative equity over to the terrain. thus it almost negates the save in fuel mileage.
-i would only have 2 years left on the truck loan but now I have 4.5 left on the terrain.
-i am an idiot.
-do not want the terrain


So here is the question.. does anyone know if a legal way to get out of the terrain and into something I want?

I owe 29k still where as most dealerships will only give 21-22k. It'll sell for about 25k. I have tried trading it in on something cheaper where even with the negative equity tacked on top of the purchase and the payments would be cheaper then what I'm paying now .. but the banks don't like how much negative equity I have on it, and they won't give me a proper rate on it. (yes I'm that desperate to get into something I like again).
I've heard such things as willingly surrendering it. But I imagine I would take a huge credit hit that way..

At this point I feel that I just have to wait a year and more paid down. But I don't want to..

Any other idea's?

[white rocket]

Take the rate bump, bury the negative equity(again) and make sure you stay in that vehicle. Or try to sell it yourself to minimize the loss. If you surrender the vehicle you risk having a voluntary repossession on your credit bureau. The "Seize or Sue" laws in BC can be found online if you want to read further about that angle but if you have great credit there's no reason to mess that up.

[lowside67]

Sell it yourself and cough up the $4k difference. If you keep adding negative equity you will truly bury yourself and never get out of the next one except for after the 6 or 7 years you are going to have to amortize it over...

Mark

[beproud]

just make sure the next veh you buy, will be the one you are going to keep eh. no regret.

[bcrdukes]

Listen to lowside67. Solid advice.

What's done is done. Cross your fingers and learn from your mistakes (or at least we hope you do!)

[Shorn]

another option - tough it out!

i see you ride as well.. why don`t you see the GMC as purely transportation, and the bike for fun?

let's be honest, no car you get will be as fast as your bike anyway

always ride safe and in a legal manner of course

[PJ]

Agree with lowside.
Cut your losses if you wanna get rid of it that bad.

[UFO]

If you put up another year's worth of payments, you also have to account for another year's worth of depreciation. In the end, you may not come out ahead even after a year.

I was in a similar situation when I financed my first new car. Got bored of it quick. Decided to tough it out because the numbers were ridiculous (to me). Still have the car, it still gets me from place to place, and its been fully paid off for years.

[Canadian Rider]

Yeah thanks for the reply's everyone.
I would love to be able to cut my losses and come up with the 4k but that won't be happening anytime soon.
I can't see the vehicle's value depreciating as much money as will go into it in the next year.. hopefully. As Shorn says it looks like I'm going to have to tough it out. I do have the bike which will get me through the spring/summer/fall.. maybe next winter I'll see where I'm at.

[UFO]

Well what I mean is you put another year's worth of payments down, let's say $500/mth x 12 months = $6000. The vehicle loses another $3000 due to depreciation. So you're down $9000 next year compared to letting the car go right now, although you will have gained a year of use. In the end actual difference depends on what you are hoping to replace the vehicle with and what those payments are going to be like

[bcrdukes]

Originally Posted by Canadian Rider

Yeah thanks for the reply's everyone.
I would love to be able to cut my losses and come up with the 4k but that won't be happening anytime soon.
I can't see the vehicle's value depreciating as much money as will go into it in the next year.. hopefully. As Shorn says it looks like I'm going to have to tough it out. I do have the bike which will get me through the spring/summer/fall.. maybe next winter I'll see where I'm at.

Did you factor in maintenance and unexpected repairs? Because once you repair something, it becomes a sunk cost, unless you choose to ignore any problems that may arise.

[4nik8]

I feel your pain, I'm in the same boat with a ford Ranger God i miss my Celica GT-Four. who goes from a four wheel drive car to a two wheel drive truck... Idiots.... me...... Anyways feel comfort in there're many others are in the same boat.

[Canadian Rider]

Yeah I am fully aware that all money that'll go into it in the next year or so will be a sunk cost.. Unfortunately that doesn't change the fact that there is no way I can come up with the money to sell privately and cover the extra 4-5k for the loan. As well as I the only financing I've been approved for in the last few months on a trade in was at 13.99% plus 2k down because of the negative equity. I've tried twice now, once in December and once at the end of February. I'll start hurting my credit if I keep applying. So I think I'll give it a break for a while and see if I can put some money aside over the summer and go from there...

[speedking]

dont keep it,sell it right away and pay the difference. you will save money faster.

[604CEFIRO]

How many dealerships have you gone to and allowed them to pull your bureau?

Sounds like you've gone and applied, they pulled your bureau, but you didn't follow through?

In terms of your credit score going down, yes it will after each pull. Your bureau will show the credit inquiries each time a business pulls your credit.

If you pull multiple times consecutively within a certain time frame, it will be seen as 'active credit seeker' = score you lower. Credit is scored based on your beacon from equifax/trains union + the financial institutions internal scoring system. Seeking credit and not following through is bad for your beacon score.

Rolling the units negative equity into another deal won't help you as creditors take into account the loan to value of the new unit. Loan to value (LTV) is the amount being borrowed versus the MSRP value of the unit. Strong clients may be considered for a higher loan to value. Weak clients will be limited to anywhere between 100%-120% of MSRP (ie// if the MSRP of a car is $10,000 and a creditor only allows you a loan to value of 110%, then they will only allow an advance amount of $11,000 {what u can borrow}). All financial institutions have a max LTV limit, and also a max negative equity limit.

Voluntary repo / voluntary surrender: don't do it. You will not be considered for another auto loan unless its from a sub prime lender like carfinco or with a cosignor etc.


Maybe see if someone will assume your loan, but be prepared to shell out some money

Originally Posted by Canadian Rider

I've tried twice now, once in December and once at the end of February. I'll start hurting my credit if I keep applying. So I think I'll give it a break for a while and see if I can put some money aside over the summer and go from there...

[twitchyzero]

thread is 6 years old you fucking jerk

[Teriyaki]

Since it got revived from the dead. Anyone else wondering if OP still has the terrain?

[bcrdukes]

Good memories. Thanks for bumping the thread.

Hoping OP will chime in to tell us what he ended up doing.

[freakshow]

Originally Posted by michaelwell

I read an excellent guide on how to finance a vehicle with bad or no credit score, You can read here!

[Gerbs]

Originally Posted by bcrdukes

Good memories. Thanks for bumping the thread.

Hoping OP will chime in to tell us what he ended up doing.

OP should be done his loan too after 6 years.

[lowside67]

Originally Posted by freakshow

Don't quote it... delete the link.

Mods will delete the original post but by quoting it, you are keeping the spam link forever.

Edit your post.

-Mark

[bcrdukes]

Damn, OP's last activity on RS was 12-17-2018 08:11 AM

[320icar]

I didn’t look at the OP year, so I was just thinking he bought it 8 years ago and still owes 4.5 years worth of payments??? How in the fuck!!!

[yray]

nvm

[dared3vil0]

I spent honestly 10 minutes trying to understand how he owned 29k on a 2011 terrain with 4.5 years left... Thread is 8 years old.