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I just can’t believe anyone would actually pay 26k for a [mod cut] Corolla. Personally I would keep making the payments get gap insurance and hope someone steals it and totals it.
She said she got a $26k loan. She could already have gap insurance. She likely actually paid $22-23k for the car and $2-3k for taxes and other fees/additions. Like it or not, the price is around the cost range for new cars today.
She probably has a high deductible and didn't have it fixed because of that
And/Or it could be that, she simply doesn't have the down time for it based on her racking 120k in 2.75 years. Maybe she accepted the dents due to the environment the car is possibly in. She has close to $9k saved up to pay down the car if she wants to, so I don't think the deductible is necessarily an issue.
I got a car loan of $26000 with no interest in 2017. I was only able to make the monthly payment of $393. It was on a small,brand new off the lot car from Toyota. But,someone did a hit and run in Nyc and my car has dents. I also ran up a lot of miles driving all over NJ due to my career. I am at 120,000 miles in under two years and nine months. i still owe $15700 on it.
The issue.Both cars are from the same dealership btw. Apparently the dealership is running a special. No money down on a new car. My loan is directly from Toyota.Both loans would be.
While getting my car serviced,someone from sales came over and asked if i wanted to trade it in. Due to the condition of the corolla,he said he could only offer $3500. I told him i am not buying if they do not give me at least $6000 for it.(it isnt like they do not have service records on it, I ONLY used them the whole time)
So he said he would shave off $4000 of the price of a Rav-4 to make up for the loss on the 2017 corolla.That is $20000
Here is where it gets fuzzy. I had $8600 i was going to use to pay on the corolla,which would have brought me down to $7100 owed on the corolla. The salesman said it would be better to put the money down on the new car and roll over the $15,700 into the new loan. I asked him what was the difference and he would not say directly. Because i would have rather given the money to the bank,and still walked out with the new car with no money down. My new payment would have been $659/mo for 6 years at 1.9% interest.
Any advice?
Don't.
If all you could do was make a $393 payment, it's going to be tough to do a $659 payment. You have a Corolla with some cosmetic damage and 120,000 miles. Apparently you had no thought about buying a new car until your brought your Corolla with some cosmetic damage in for regular service and the sales guy put it in your head that you should buy a new car. Apparently this then kicked of a thought process that because they sales guy though you should buy, that means you should buy a new car. If it's something you've given serious though to and not just whimsically decided it was a good idea because the salesman told you to. Yes, that's blunt and maybe that was just the last thing that pushed you over although it's still a stupid thing to push you over.
That out of the way you get to specifics of how to buy a new car. Figure out what's a good price. Rav4 World has a thread on what people are paying, Edmunds TMV, Costco if you have Costco. $20,000 for a base model RAV4 sounds like a good deal but I haven't done the homework. But you need to do the homework. My Prius had pretty much the same MSRP and I paid $20,400 for it, plus 0% for 60 months. That was a good deal on it but nothing great. I sold my 7 year-old Mazda3 which was in fair condition and around $2,000 in needed mechanical repairs at shop rates for $6,000. Ran and drove, but the fuel pump needed to be replaced and it needed some suspension work. Trade in offer was $2,000. I had a buyer lined up who was willing to wait a few days since it sold so quickly.
You have to do your homework on what your trade is worth and what's a good price on a Rav4. At the very least take it to Carmax. The only advantage in most states to the game is to get the buyer to pay more. If you're in California, Hawaii, Kentucky, Maryland, Michigan, Montana and Virginia, then there's a sales tax advantage. Oregon has no sales tax. The other states calculate sales tax off the net price. If it's $25,000 purchase and $5,000 trade, you pay taxes on $20,000. If it's a $20,000 purchase and $1 trade, you pay taxes on $19,999. It won't be extreme. It's just a game the dealer plays to give you an okay deal you could get anyway on the purchase so they can gouge you on the trade. Negotiate them separately.
This makes absolutely no sense to trade in ATM. Rav4 deals can be had almost year round - there is no rush there(now if you say Tacoma, or some other model that rarely gets incentives, that’s different). On top of that, it’s not even a 0% APR, they’re still charging 1.9% so it’s not even that great of a deal in the first place.
On top of all of that, you rack up nearly 60k miles a year. Buy that rav and you’ll be in the same place you are now in no time. Except with more debt.
That new rav4 might have a lifetime warranty but you need to remember the $15k that’s rolled over into the new loan can easily pay for a new engine/trans AND body repairs WITH money left over. Plus lifetime warranties are a gimmick anyways. All maintenance has to be done exactly on time and they can easily deny your claim if you’re missing a receipt or something. Not worth it.
And/Or it could be that, she simply doesn't have the down time for it based on her racking 120k in 2.75 years. Maybe she accepted the dents due to the environment the car is possibly in. She has close to $9k saved up to pay down the car if she wants to, so I don't think the deductible is necessarily an issue.
Get the dent fixed and rent a car for a few days, it takes no time.
Any way you slice it, it's WAY cheaper than buying a new car.
You need to drive 'em into the ground when you drive 40K miles a year.
You are getting killed, keep the Corolla, send the bank the $8600 and then an extra $250-260 a month that your new payment would be and get it paid off.
OP needs to find a car guy friend who knows HOW to buy a good used car.
The new car loan thing is getting long on the tooth.
Nah, hang onto the money and just make the payment until you can write a check for the title. Cash is king and the Corolla is just a [mod cut] car. This is why big down payments on loans are risky. If [mod cut] the bank comes looking for it you lose your entire investment. But if you can pay it off, boom, it's yours and nobody can come looking for it.
I understand your point but was concerned the OP might not be the best with money management so if they retain the $8600 then it might get spent elsewhere but if they lump sum it towards the car at least it pays down the note.
The salesman dangled that Rav 4 in front of your nose and now you want it. That's what they do: plant the suggestion, create the desire, get you fantasizing about something "better" than what you have. All he needs to do now is wait for you to justify it to yourself. He did exactly what he intended to. You fell right into the trap. Why can't you see it?
If you are so worried about repairs your Corolla might need, start putting money aside each month to cover them. Use the money saved from NOT getting into that bigger loan. Every car will need repairs at some point, warranty or not. Oh, almost forgot...once your current loan is paid off, start setting that payment amount aside each month to put toward your next car purchase.
I just can’t believe anyone would actually pay 26k for a [mod cut] Corolla. Personally I would keep making the payments get gap insurance and hope someone steals it and totals it.
Park it in a flood prone area during a thunderstorm, park it a block from a chop shop with the keys in it, something...
I understand your point but was concerned the OP might not be the best with money management so if they retain the $8600 then it might get spent elsewhere but if they lump sum it towards the car at least it pays down the note.
She's in the hole and just needs to dig herself out the hard way. Maybe if she pays on it for another year she can write a check for the balance and get it over with, but that takes longer term discipline and an aspiration to a certain way of life that not everybody sees value in. Being perpetually in debt and behind the 8-ball sounds fine and "normal" to most people.
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