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Posts tagged with: car loan

The Car

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So I’m here for your advice today. We’ve had our van listed for sale for almost 4 months now, I believe, minus that month it was in the shop was being rear-ended. And while I’ve gotten a few inquiries, but nothing really solid. Then this week, I had a super low ball offer…like 33% less then what I’m asking…no thank you!

Being a commercial vehicle, it’s harder to place a value on it so I went to my bank and asked their help. They valued it at about $25K. I own right at $27K.

So here’s the question…do I continue to list it for sale and just keep on or do I explore downsizing to a used car and perhaps roll the portion I am “upside” down into a new auto loan? I’ve looked (just online) at used cars and I see two viable options:

5+ year older Honda Element
Plus: Price around $12K, great gas mileage, low maintenance
Down: Only seats 4, there are 5 of us. But we do have the ’96 Honda Accord that seats 5 and is paid off. History Buff will get his license in March. Would have to rent a vehicle for any longer distance driving, which we are certainly not doing alot of but it will happen on occassion.

4+ year older Honda Pilot
Plus: Good gas mileage (much better than current vehicle,) low maintenance based on reputation, 3 row seating so seats all of us and some extras when needed (which we actually have ALOT)
Bad: Price around $18K, and I HATE 3 row seating, it’s very inconvenient for getting in and out.

I’m certainly not rushing into any decision. And as mentioned on several occassions recently, I don’t really trust my judgment. So I’m asking for your opinions.

Just a refreshed on current vehicle situation.
Car #1: New, Financed, large commercial van that I purchased to accomodate our growing family. Currently financed $27K, insurance runs about $100 per month, taxes are about $400 per year, monthly payment is $696. Regular oil changes and tire rotations, no other maintenance expected for forseeable future.
Car #2: Older Honda Accord, in good shape, owned outright. Insurance about $20 per month and taxes will be around $50 year. Just got inspection and oil change, will need new tires and to recondition headlights in coming months but no other maintenance known. This will become the twins car as they get their licenses (starting in March.) Oh, and it is a stick shift which I have VERY limited experience with.

Ok, I think that gives you all relevant information. What do you advise?


How the Payment Box Allowed Me to Buy a Car

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By Darren Stevens

I thought my story might help some people who find themselves in a similar situation. I was recently able to get a car because of the payment box when I likely wouldn’t have been able to any other way. Getting that car was vitally important because it allowed me to keep my job, which in turn allows me to pay for my apartment and stay off the streets. It’s a rather long and complicated story, but I will give you the concise version to give you a bit of background.

I’ve been in and out of the hospital for some years now due to chronic illness. The illness has also led to me having huge medical bills and even filing for bankruptcy. Due to all of this, my credit isn’t what could be called close to being good. It’s terrible, and that makes it difficult for me to qualify for any credit or loan. That hasn’t been a problem because I went to an all-cash system that had been working well. That was until my employer decided to move locations which meant that I would no longer be able to take public transportation to work.

The only option I had was to get a car or lose my job. I was terrified because I thought there was no way I could qualify with my credit history. Then I remembered an article Tricia wrote about payment boxes when they first came out years ago. Since my choice was to have a job and a roof over my head or not, I immediately went searching to see if I could find something that could help me get a reliable used car that would get me to and from work each day.

For those not familiar, a payment box is a device that lenders place in the car that give them control of whether or not the car starts. , it allows lenders to disable your car so that it won’t run if you don’t make a payment that’s due. While this sounds like a terrible thing for the car owner, for me it was a lifesaver. That’s because the payment box gives the lender some control over getting payments, so they’re willing to give people like me who have terrible credit a loan when otherwise it wouldn’t be worth the risk.

By having control of the car, it mitigates their risk and allows them to easily disable the car. It won’t start if a payment is missed, and to recover the car (the device also has a GPS tracking system) if a missed payment isn’t immediately made. On my side, as long as I make the monthly payments on time, there is no issue, and I have a car that gets me to and from work. With these safeguards, they’re willing to make a loan to someone they might not normally approve. To qualify, I had to show my paycheck stubs to prove that I could make payments.

There are a lot of people who think that payment boxes are a bad idea. I read a survey conducted by Stoneacre that said the public is still evenly divided on whether or not this is a good idea. It said that 35 percent of people thought the payment box is a good idea, 34 percent thought it’s an invasion of privacy, and 31 percent had no specific view on it. My guess is that those who though it was a bad idea or an invasion of privacy have never been in a position where they couldn’t get a car they needed without this option.

I must admit that I would prefer not to have the box in my car. They claim they only use the GPS capabilities if they need to repossess the car, but that doesn’t mean the NSA doesn’t have access to it. I’d rather there not be a possibility of someone knowing where I am at any time. If, however, the choice is that or living on the streets because I can’t get to my job, I’ll gladly accept the conditions.

So you may be wondering why I’m writing this for BAD. I wanted people to know that not all people who have terrible credit are people who just racked up credit card debt and decided not to pay, or people who don’t understand how credit works. Not everyone who gets a bad credit car loan is someone who is lazy and didn’t have what it takes to organize their finances. Until I came down with my illness, I had great credit, and I’d never failed to pay a bill on time. When you get sick, and your choice is getting the medication you need to stay alive or paying a bill that has come due, priorities change pretty fast.

There are some of us who were thrust into the poor credit world because of the genes our parents gave us without ever intending to get anywhere near it. I hear from a lot of people who say that those with bad credit shouldn’t be able to get any credit because they have already shown they aren’t reliable, and they should live with the consequences of their prior choices. The truth is that there isn’t a one-size fits all designation as to why people have credit problems. And if the system didn’t find ways to try to help those who do have bad credit, I would probably be living under a bridge somewhere instead of having a job, paying taxes and being able to contribute to my community.