The dangers of a high auto interest rate

In my profession, I get to see a lot of finance deals. One thing to be careful of high auto interest rates. It’s not revolutionary advice, but it still needed.

I totally understand that in the moment you get what you can get, because who can survive out there without a means of reliable transportation?

However, putting yourself in a bind becomes a real bind when you’re upside down on that loan.

I’ve had to deliver that news a few time and it suck’s for both parties. The one hearing it and the one saying it. Imagine letting someone know that their damaged car is only worth 3k and they have 15k left on a 2014 vehicle.

What are you suppose to do then? If you find yourself in that situation, get aggressive. Real damn aggressive and pay additional on your loan after the monthly payment. That APR gonna eat you up for life if you don’t.

Every time you have some spare change throw that towards the car with the goal of paying it off ahead of time. Remember to join a credit union and refinance after a few months when your credit looks less crazy.

There are two types of clients I encounter after their vehicles are a total loss, the first are focused on the market value of the car and the settlement. Are they getting the best offer? How soon can they purchase the next vehicle?

Their worry is centered on purchasing another vehicle without paying anything additional.

The second group accepts the settlement in defeat . Their minds in complete panic about the remaining balance of the loan. How will they get another car having to still make car payment without a vehicle! It’s a nightmare.

Avoid the nightmare! If you’re already in that type of situation of a high interest loan, keep paying ahead and find a way to get out. It’s better to find a little something something, and pay cash if you’re able to save up or hustle.

If you’re already upside down, call your lienholder (who you make your car payment to), and attempt to get a payment plan.

You can always find another leinholder who would eat the loan and add it to the one they are offering you. Although that would make things temporarily better but infinitely worse. You will be in twice as deep.

No, let’s avoid that. Get a clunker, and make a deal with your finance company.

That’s my thoughts for today, having to deliver the news and try to comfort those who have no idea what to do next.