Your rates of bank

Are you thinking about buying a new car, but dreading the dealer haggles that come with the purchase? There are a number of car-buying services that say they’ll do the negotiating dirty work for you, and save you thousands of dollars in the process.- advertisement -

These services are often just a mouse click or phone call away. Fees range from free (if you’re a member of one of their affiliates) to anywhere from $200 to $400, with about half of the amount due upfront.

Buyers typically begin by calling the car-buying service or filling out information online.

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Washington Mutual, Wachovia and National City are among the financial institutions that have announced huge losses and are looking for billions of dollars from private equity firms or others in the industry just to keep their doors open. In all likelihood, the bigger banks and savings and loan associations will survive the mortgage debacle and ensuing credit crunch, albeit somewhat battered and bruised.- advertisement -

But smaller banks may not fare as well, although it doesn’t appear that we’ll see a cascade of bank failures. Nevertheless, the increased risk has prompted the Federal Deposit Insurance Corp., or FDIC, to beef up its staffing in anticipation of banks going belly-up.

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Millions of people know actor John O’Hurley as the man with the stentorian voice who entertained us as Elaine Benes’ boss on “Seinfeld.” His witty and wry portrayal of J. Peterman led to many successful print and TV ads for major companies.- advertisement -

Or maybe you remember him for mesmerizing us with his fancy footwork as the runner-up celebrity dancer in the first season of “Dancing With The Stars,” where he ended up in a dance-off with soap star Kelly Monaco. In winning the September 2005 rematch against Monaco, he earned $126,000 for the charity Golfers Against Cancer.

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They should call Chase at the phone number that is on their mortgage statement.- advertisement -

When should borrowers call you — before they’re late with their first payment, or sometime later on (e.g., 60 to 90 days after missing the first payment)?
Borrowers concerned they may miss a payment should call their lender. It is never too early to start the discussion.

Should a borrower ask to speak with someone specific?
If a borrower calls Chase to discuss possible payment difficulties, the initial discussions will be handled through the customer care department.

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It long ago ceased to be news that the new-car industry is in disarray. It looks like overall car and truck sales will fall to levels not seen since the early 1990s, and manufacturers are offering all manner of incentives.

But one thing that may surprise shoppers when they go to a dealer is that it’s possible to find 2007, 2008 and even 2009 versions of the same model on the lot, all carrying various incentives to lure buyers. Read the rest of this entry »

Dear Dr. Don,
Please help! I have been divorced for more than eight years, and I was stupid enough to allow my ex-husband to put his car and motorcycle in my name. The car doesn’t have a lien on it, but the motorcycle does because he’s still making payments on it. Both are under my insurance.
He refuses to put them in his name because he has bad credit. What am I supposed to do? Sometimes he doesn’t give me the money and I end up making the payments so I don’t get bad credit!
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Gamber says traditional boardinghouses provided daily meals mostly to single male boarders as Americans moved from the farm to the cities during the 1800s.

The boardinghouse’s seedy reputation, though sometimes deserved, was as much a reflection of the various turn-of-the-century campaigns for decency as the living conditions themselves, she says.

Sales of new cars are a good bellwether for how the economy is affecting the average consumer — and the indication is that a significant number of people are too concerned about their financial situation to buy a new vehicle this year.

In addition, sales of collector and exotic cars may be an equally good sign of how the well-heeled among us are doing.

Last month’s sixth annual Barrett-Jackson Collector Car Event in West Palm Beach, Fla., showed there’s still plenty of money being tossed about by people who want to buy cars they coveted as kids.

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Dear Terry,
I am looking to purchase an Acura RSX Type-S, and it is an out-of-state purchase. I’m currently located in Connecticut, but the deal will take place in New Jersey.

I am completely clueless about interstate private-party auto loans. Do they differ from other auto loans? Or will I need to apply for a personal loan?
—

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Dear Terry,
I have a question about voluntary repossession. I got ripped off over a 2002 Chevrolet Tahoe. Now that I want to trade this car for something smaller, the car dealers won’t give me anything because of the high payments.
I have good credit. So, I was thinking about voluntarily repossessing this car and buying another one. Please give me advice. Am I stuck with this Tahoe for a couple more years?
— Nicole

Dear Nicole,
You may have good credit now, but you won’t if you simply dump this vehicle back on the lender. A voluntary repossession is as bad on your credit as having the repo guy snatch the vehicle in the middle of the night. Read the rest of this entry »

If you’re looking for a good used car that gets great gas mileage, you’ve probably shopped for what conventional wisdom says is the “best” on the market: Honda and Toyota.

When buying used, it’s hard to go wrong with a Honda or Toyota. However, the downside is that those cars tend to be at the high end of the price ranges for their classes.

So what’s a bargain hunter to do?

Looking deeper into the market, you’ll find cars that are overlooked gems. These bargains have good reliability records, offer space and value for the money, and get at least 20 miles per gallon and as much as 36 mpg, according to federal government ratings.

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Dear Terry,
Is there such a loan for cars where the payment increases over the loan period? Right now, the job I have won’t allow me to pay a normal car loan payment. However, I’m studying to be a certified nursing assistant, so eventually I’ll make more money and will be able to afford a higher payment.
The reason I’m asking is I have 373,000 miles on my present car with bad tires, bad rear axle, bad rear-axle bearing, transmission slippage and so on. It would cost more than my 1994 Jeep Cherokee is worth to repair it.
— Read the rest of this entry »

Dear Terry,
I used a balloon payment loan to buy a car and I am coming up on the due date. If I take out a loan to finance the balloon payment, which category of annual percentage rate applies — the rate for buying a used car or the rate for a lease buyout?
— Brad

Dear Brad,
Each lender treats this situation differently. You can likely find one that will treat it as either a refinance or a lease buyout, each of which should have a lower rate than a straight used-car loan.

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Dear Terry,
My FICO score is 500 and I was supposed to take over my girlfriend’s car, a 2005 BMW 645 that she agreed to buy for me on the assumption that I would get financing in three months. We owe $57,000. I can’t get financing, but I make $130,000 a year. What can I do?
– Robert

Dear Robert,
I won’t ask how someone who makes $130,000 a year has such a low FICO score. But to address your main question, there are subprime lenders who may be willing to make you a loan. Expect the interest rate to be as high as 21 percent, which could mean payments well above $1,000 a month. Read the rest of this entry »

Reader feedback continued

Monday, Jan. 28
Posted 4 p.m. Eastern

Reader feedback continued: Picking up from the earlier post, here are some additional reader e-mails about last week’s Fed rate cut and the state of the economy.

–”If you ask me if we need a rate cut, however, I say no and we should not have cut rates since September. Inflation will grow at a staggering rate after the onslaught of the interest rate cuts which will put us in a possible depression in ‘09. Add to that the price of oil/gold/silver/platinum/corn/wheat/hogs (at all-time highs) we are set to be jacked as an economy. Let me throw in another wrench of losing economic prosperity where we outsource manufacturing jobs. We are too reliant on foreign sources for our goods. We send out raw materials and import their finished goods. It is going to be the 1930s soon enough — are we too naive to realize this? What happens when unemployment reaches 6 to 8 percent in the coming years - and the jobs we have pay minimum wage - we’d have to work an hour or 2 daily just to pay for getting to work. Throw in the added price pressures on core necessities (food/energy) and we’re living in debt without the splurging on luxury items (TV, electronics, clothes).”

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Dear Terry,
I’m currently paying 16.9 percent on a loan for a used ‘07 car, but I’m sinking fast in payments. I bought the car in October 2007 and am financing for roughly seven years.

I’m not too keen on keeping the car, so if I can sell it, that would be my best option. But at this point, I’m almost prepared to voluntarily repossess it. I’m still young and don’t have many accounts open, but I don’t know what to do or who to turn to.
– Tara

Dear Tara,
You don’t say what your credit is like or whether you’re current on the car loan. If you’re current, you should try to refinance your loan. For a 2007 model car, you should be able to get a loan for about half what you’re being charged now. Read the rest of this entry »

Dear Terry,
I have a 2007 Dodge Charger R/T. We are way upside down on the car and have a high payment. I want to know what options, if any, are available to get a cheaper payment.
The Blue Book value if it is in great condition is $23,000 and — get ready for this one — we owe $41,000 because we were also upside down on the previous two vehicles we purchased. All that has been added to this one and I would like to refinance it and try to get a cheaper payment. Is that even possible?
Read the rest of this entry »

Inflation to complicate the Fed’s task

Untitled DocumentInflation to complicate the Fed’s task

Maybe the sixth time will be the charm. Then again, it might ultimately create more issues than it resolves. The Fed will most certainly cut interest rates for a sixth time at Tuesday’s meeting in an effort to erase payment increases on adjustable rate mortgages, cushion the economic blow of a recession and vanquish the credit crunch.

A sixth interest rate cut, much as with the previous five, will be received with open arms by those with resetting ARMs. Homeowners with adjustable rate mortgages facing a reset in the coming months have the Fed to thank for an adjustment that will be much ado about nothing, or can in some cases even cause the payments to decline. Talk about a mulligan. Millions of homeowners will get a yearlong reprieve from a painful payment adjustment thanks to the repeated Fed moves, something that will be far more significant to far more people than any foreclosure relief plan or coalition of government and lenders.

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Dear Terry,
We bought our 2007 Honda Odyssey last September and we are paying a car loan with an 8 percent annual percentage rate. So, right now we want to refinance the loan. When is the right time to apply for it?
— Arthur

Dear Arthur,
Since you bought the Honda, car loan rates have gone up. It’s doubtful that you can do better than your 8 percent rate on a refinance. However, you can use Bankrate’s compare auto loan rates feature to try to find a better rate. Read the rest of this entry »

It seems that mortgage servicers aren’t satisfying anyone these days.- advertisement -

Homeowners get fed up when they try to work something out with their servicers, to no avail. Real estate agents complain that mortgage companies drag their heels on short sales. Regulators are restless about the lack of “meaningful improvement in foreclosure prevention outcomes.”

If there’s a lesson for foreclosure-avoiding consumers, it is this: Be patient, don’t take mortgage servicers’ actions personally and be ready to send paperwork multiple times.

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Nina Smith was among those who obtained, but never tapped, her HELOC. Instead, Smith — who owns properties in Nevada and California — thought having an open line of credit for a home she uses as a rental investment in Phoenix would be a smart way to access cash in case of some big emergency.

“Obviously, I have plenty of savings and investments, but I like to have someplace where I have cash that’s liquid. It’s my backup to my backup,” says Smith.

Not anymore. In February, Smith was among 122,000 borrowers who got letters from Countrywide Lending informing her that she couldn’t use her credit line after all.

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Dear Terry,
I went to a car dealership and I saw a beautiful 1999 Dodge Dakota with 75,000 miles for $2,995. This car dealership usually offers “buy here, pay here,” but the dealer said that since this truck has such low miles, I have to buy it straight out.
So he offered me a deal to buy it over time and keep it there until it’s paid for. I gave him $1,000 down and came back a few days later and started the truck up and heard a ticking noise from the front end. It ended up being the motor, so I asked for my money back. He refused. What can I do?
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Dear Terry,
My boyfriend is interested in buying a nice used car. His credit is not good but he has saved up a few thousand dollars. Could you provide me with a list of online lenders or financial lenders who help people with bad credit?
— Cynthia

Dear Cynthia,
There are a wide range of lenders who cater to people with less-than-perfect credit. I can’t endorse any one of them, but here’s a few that you can start with — BarNone.com, CreditOneBank.com and eLoan.com. Read the rest of this entry »

Job market: bad to worse

Untitled DocumentJob market goes from bad to worse

The March employment report released this morning was anything but pretty. The unemployment rate increased from 4.8 percent to 5.1 percent, which isn’t unexpected at all. But more troubling is the fact that we’ve now seen three straight months of job losses. Last month, when we were at two in a row, was enough to convince me we are currently in a recession. The news was even worse this time around.

In March, payrolls shrank by 80,000 jobs. The two preceding reports for February and January were revised lower, from 63,000 job losses in February and 22,000 job losses in January to a loss of 76,000 jobs in EACH month. So the job losses for the first two months of the year double and the initial March reading showed even more job losses.

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Fed blog: Fed cuts rates

Untitled DocumentFed cuts rates by 3/4 point

Just eight days before a regularly scheduled meeting, the Federal Open Market Committee took aggressive action, slashing short-term interest rates by three-quarters of a percentage point. The federal funds rate is now 3.5 percent, and the prime rate will subsequently decline to 6.5 percent.

In doing so today, as opposed to last week when it was a drumbeat of one poor economic release after another, the Fed will open itself to criticism of pandering to stock investors and being too far behind the curve to help the economy avert recession. Global stock indices have declined by more than 10 percent in some cases, just this week.

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