What I should do? [new car]

hyundai
selling
accent

#1

Ok I got a new 2007 hyundai accent. The price on the car was 17,000 and they lower it to 16,000 plus 1,600 for reg. for the car in the DMV. Well after signing the paper and all I notice I have to pay off $31,000 for that car! A 72 month with a 9.4% rate and I have to pay also $500/mo to pay it off. How come from $17,000 to $31,000! What I should do with that? Go to the dealership and fight them to remove that or take the next step?


#2

How is your credit? If ok immediately see if you can get vehicle refinanced thru another loan agency for a shorter term and better interest rate.

The loan is your doing. You should always read the paper work before signing your life away. If you don’t understand bring someone along who does or refuse delivery. Take it as a life lesson and move on. This car dealer is a predator and took serious advantage of you on price and loan.


#3

Welcome to America. You are now a debt slave. If you can’t pay cash for a car, don’t buy it. Six years from now, when you finally own this car, it may be worth $5000-$6000.

Instead, put the $500 car payment in the bank. In TWO years you will have over $12,000. More than enough to by a nice 3 year old car coming off lease.

Your cost-per-mile will be about a third of what you signed up for…


#4

If you have a credit union where you work try to refinance the car through them. As others say that is why I always buy used cars-well next time.


#5

You will get nowhere with the dealership. They will usher you to the door.

Read the loan documents and find the section on prepayment. That’s what you plan to do. There may be a penalty for prepayment, but it can’t be helped. Then go to your bank or credit union and explain the situation. Ask for a new loan that will enable you to prepay the dealer and then pay off the bank’s loan at lower interest rates – maybe even the same monthly payment but a 60-month loan instead of 72 months. Good luck.


#6

Well, your first clue that they are thieves should have been the $1,600. fee for registration of the car. Unless you live in an unusually high-cost state, that registration fee is…perhaps…about $1,500. higher than it should be, even if you factored in new license plates, courier fees, etc. There is no way that I would sign off on a contract that included $1,600. for registration fees.

As to the other increases that you had not anticipated, I suggest that you speak with someone at the Consumer Protection office at either the county or state level (don’t waste your time with the Better Business Bureau!). However, you have to bear in mind that paying off something this expensive over a period of years does invariably wind up costing the borrower a huge amount in interest fees during that period of time, so it may well fall within the limits of the law.


#7

Have you never had a loan before? when did it dawn on you that you have to pay interest…72 months is a heck of a long time and at 9.4% … come on! Some states allow you to back out of a contact within a few days…I presume your time has expired. As the other posts suggested…refinance.


#8

Well its not just the interest which is high for right now, but the length. Six years is way too long to finance a car. And no way will it be worth $6K at the end. It will most likely be falling apart in four years.

If they compute the loan on the rule of 79ths, you will be paying nothing but interest for the first 3-4 years and still have the principle to pay at the end. Bad bad deal. I would not take delivery at this point so that you have all your options and try to get out of the deal. Always run an ammortization calculation first to see what each payment is applied to interest and principle throughout the loan.


#9

VDCdriver:
In the State of Washington there is 6.5% state tax + local tax up to 2.0% + RTA tax of .4%. That means if the car was purchased in King County Washington 16,000*8.9% = $1424.00 in sales tax alone plus $150+ in license fees.
~Michael


#10

I am indeed familiar with sales tax. In NJ, which has a 7% tax, it is listed on the invoice separately from the purchase price of the car, and separately from items like registration fees.

The OP stated that he/she paid $1,600. in registration fees, and I answered accordingly. While your explanation does make sense, that is not the way that the OP presented the information. But, then again, I think that the OP was confused about a number of things.


#11

Typically in Washington they are listed seperately as well. My assumption was that the OP lumped everything above the $16,000 for the car into registration fees. I am sure that the OP was seriously confused as the loan paperwork should have explained the interest rate, number of payments, and total cost of financing. If this information was blank at the time of signing he should not have signed. If it was clearly spelled out like the law requires he should have taken the time to read it before signing.
~Michael


#12

You waded into this mess of your own accord. You only have 2 options other than the one you’re in.

  1. Refinance through another bank at a lower interest rate or shorter term. The shorter term will save interest money but may move your payments from 500 to 800; it depends on the term length. A lower interest rate at the same term length means your monthly payment may drop a bit but you may pay 29k dollars instead of 31k.

  2. Sell the car immediately and consider the money you WILL lose a financial education. That would be my preference. The dealer will buy the car back from you but not for what you paid for it. You will also lose that 1600 in reg. and tax fees.

Having the dealer finance the registration fees and taxes is also a huge mistake. That 1600 dollars in the financing means you’re going to be paying for it over 6 years also. That means the 1600 will cost you 3 grand.
When dealers say they “include” title, tax, and tag it means exactly that; it’s included in the total sum that will be financed.

The dealer did absolutely nothing wrong here. The new car fever clouded your thinking and you decided to do the math AFTER the fact, not before.
What happens if you buy a house for 125k dollars and finance it over 30 years? You’ll have paid 350-400k for it when the smoke clears. Same thing.

At this point, other than the 2 options I mentioned, all you can do is grin and bear those 500 a month payments.


#13

The $1,600 may be taxes and registration fees due at the DMV office to get your licence plates. It may include a markup for the dealership to cover their time and effort to do this for you. (Where I live, you do this for yourself; all you get from the dealership is the paperwork to take to the DMV.)

I would guess that you need to borrow $17,600, which is the sum of the $16,000 for the car and $1,600 for your licence plates at the DMV. The difference between that and $31,000 should be interest on the loan. If that is the case, these numbers do NOT add up! With this loan amount, a 72 month term and a 9.4% interest rate, the monthly payment should be only $321 and the total interest should be only $5,488. Are you sure you have all of the numbers correct?

I suggest you shop around at several banks and credit unions. (You should have done this before signing anything at the dealership.) Take the paperwork from the dealership with you. Depending on your credit history and how big a monthly car payment you can afford, they may be able to give you a lower interest rate. At the very least, they should be able to explain what is going on.