Finance question for those in the know.

Kryton · 21-09-2007, 03:37 PM

i have a 03 BA Fairmont which is financed, had it almost a year now.
anyway, im getting bored with it, wouldnt mind something else but this is where the problem is.
having had the car for less than a year, i still owe a fair bit on it. no chance in hell i could pay it out either at this point of time.
i could probably sell the car for what i owe on it i guess. this would be a hard task though since it doesnt have a clear title.
repayments are not an issue here at all, im just bored and want something else.
one of the cars id consider is only around 8k so im not looking to spend up big or anything.
can anyone in the know give me some info on what i would need to do or what would be my best bet?
i dont really know where to start of even if its worth doing.

Yellow_Festiva · 21-09-2007, 03:44 PM

Got a house loan that's got redraw? Pull it out, pay off car and sell with clear title.

Or perhaps get a personal loan, pay out car then do same.

Kryton · 21-09-2007, 03:47 PM

Quote:

Originally Posted by Yellow_Festiva

Got a house loan that's got redraw? Pull it out, pay off car and sell with clear title.

Or perhaps get a personal loan, pay out car then do same.

dont have a home loan and i dont want another loan to pay off this loan so i can get another loan to get another car.
doesnt make sense really doing it that way.
although a personal loan would reduce the interest dramatically

robjh80 · 21-09-2007, 03:51 PM

You've had it "almost a year"

Hold onto it until you have had it for "over a year" otherwise you "may get hit with penalties" for clearing up the loan within the first year..........a lot of banks and financial institutions put a clause in the loan contract to this effect.

Obviously they dont want you to pay the loan off before time and certainly not in the first year, otherwise they dont earn enough interest on the loan hence the penalty rates for early payment.

Check the details with your particular lender.

4Vman · 21-09-2007, 03:55 PM

Id say learn how to enjoy the vehicle for a while yet or you're going to burn allot of money getting out of it......

Kryton · 21-09-2007, 03:57 PM

ive already got a payout figure which includes the $900 early payout fee.

TZENU · 21-09-2007, 03:57 PM

I was in the same boat as you not long ago... I had an encumberance (financer has an interest in vehicle)over my XR6T. This doesn't really effect the price you get on your car...

It just means that the purchaser writes a cheque to your finance company for the sale amount and you have to make up the difference if any... Although, there is a bit of paperwork involved but if you price the car correctly you should not have a problem with prospective buyers..

And as above check to see whether there are any fees involved for ending the loan period early

Kryton · 21-09-2007, 04:00 PM

Quote:

Originally Posted by TZENU

I was in the same boat as you not long ago... I had an encumberance (financer has an interest in vehicle)over my XR6T. This doesn't really effect the price you get on your car...

It just means that the purchaser writes a cheque to your finance company for the sale amount and you have to make up the difference if any... Although, there is a bit of paperwork involved but if you price the car correctly you should not have a problem with prospective buyers..

And as above check to see whether there are any fees involved for ending the loan period early

early pay out fee is $900. sussed out the selling part which you have just explained.
if i sold it for 15k (what i need to pay it out) i still wouldnt have a deposit for the next car either.

Yellow_Festiva · 21-09-2007, 04:15 PM

How long to go before you don't need to pay the $900 fee?

Is it really worth the trouble? Save hard, pay it off, or save and keep the money separate and buy a car outright.

Buying on loan and rolling over like this is not the best way to have a car.

Kryton · 21-09-2007, 04:16 PM

lets just say i sell it and pay the 15k i owe.
i get a 8k loan for the next car.
i still owe a shitload less than i do now

TZENU · 21-09-2007, 04:20 PM

Quote:

Originally Posted by davway

lets just say i sell it and pay the 15k i owe.
i get a 8k loan for the next car.
i still owe a shitload less than i do now

What are the details of the Fairmont?.. You may be able to get over 15???? leaving you with a little deposit for the next car

Kryton · 21-09-2007, 04:22 PM

Quote:

Originally Posted by TZENU

What are the details of the Fairmont?.. You may be able to get over 15???? leaving you with a little deposit for the next car

148000km. 15k would be about it i would imagine.
unless it gets written off, then i walk out of it with a bundle of cash and the car paid off

||| · 21-09-2007, 04:34 PM

see if someone will race you for pink slips. if you win keep their car (make sure it is one you like) and give yours to the finance company

4Vman · 21-09-2007, 04:36 PM

Quote:

Originally Posted by davway

148000km. 15k would be about it i would imagine.
unless it gets written off, then i walk out of it with a bundle of cash and the car paid off

I hope your insurance company doesn't read these forums...!

Kryton · 21-09-2007, 04:37 PM

why? im not planning anything

Scott · 21-09-2007, 04:46 PM

So your question is "will someone buy my car if it is encumbered?".

Answer is yes, happens all the time. As was prev mentioned, they will need to cut a cheque to you financier to cover the debt.

Given that you said that by selling the car you will cover the debt and the early payout penalty, I see no reason why you would hesitate if you're not happy in it any more.

Sledgehammer · 21-09-2007, 04:48 PM

Unless the current lender is paid out then they wont release the title so the only option is to sell and clear title or trade and do the same thing. Theirs really no way given what you have said to do anything else, you have to increase your equity. You could always increase your repayments and then look at again in another year,

Scott · 21-09-2007, 04:55 PM

Quote:

Originally Posted by Sledgehammer

you have to increase your equity. You could always increase your repayments and then look at again in another year,

I don't follow. He owe's $15k, want's to sell for $15k - why does he need to increase equity (or rather, reduce the balance)?