Your rates of bank

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. (more…)

What a strange summer.

Gasoline prices skyrocket above $4 a gallon and car buyers scramble to switch to smaller, more fuel-efficient cars — or stop buying new vehicles altogether.

Meanwhile, Detroit manufacturers pull back or stop offering leases because of huge losses on SUVs and pickups.

Then, gasoline prices slowly start to fall back below $4 a gallon.

So what does the future hold for consumers?

Some clues started to surface this week.

Chrysler — the manufacturer that gave its dealers a week’s notice before pulling all leases starting Aug. 1 — has started doing what it can to make its vehicles more affordable by cutting sticker prices, by as much as 40 percent on its Dodge Ram 1500 pickup.

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Dear Terry,
I co-signed a car note for my son and he is five months behind on the car. Do you have any suggestions for him to bring the car note current? Neither he nor I have all the money to bring it current. He could do weekly payments, possibly.
— Mary

Dear Mary,
If your son is five months behind, I’m surprised he still has the car. (more…)

Dear Terry,
We are thinking of buying a new car. Would it build my credit if I apply for a car loan separately instead of doing a joint loan?
My husband has a 20- to 30-point higher credit score, so he is getting a better interest rate. But I would still like to apply for a loan in my name as I am thinking that would help build my credit history.

Am I right in assuming that? Or am I wasting a few dollars every month just thinking I am doing the right thing by not taking the car in my husband’s name?

(more…)

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).”

(more…)

Inflation bloats the prices we pay for goods and services. But if inflation, or the threat of it, keeps the Federal Reserve from lowering short-term interest rates, then it will bring a smile to the faces of people who rely on fixed-income returns, because right now they’re getting pummeled on two fronts.- advertisement -

Consumers are paying higher prices on everyday necessities such as food and fuel. But the interest they’re getting on cash and CDs is nothing short of lousy. If the Fed stops cutting rates, interest on deposits may stop dropping.

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Dear Dr. Don,
We have an auto loan with CitiFinancial at 16.99 percent. The loan is in both my husband’s and my name. I called CitiFinancial to see if there is something that can be done about this.
I was told that I have a simple interest loan and it has to stay like this until the end of the loan, unless I pay it off early.

We pay nearly $1,600 in interest every year and I just think this is ridiculous. Is there anywhere else I can get this auto loan refinanced at a better rate?

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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. (more…)

For all the bad news that seems to come out daily about the automobile industry, it’s a boom time for some manufacturers and their dealers.

Honda dealers are reveling in the stampede of buyers looking for fuel-efficient cars. Sales of the subcompact Fit sedan are up 53 percent over a year ago, and the Civic was the best-selling car in the United States in May.

Toyota is doing equally well with its Corolla and, of course, its Prius.

Some dealers are reporting that they have almost no backlog of fuel-efficient cars and that it’s not unusual for cars to be snapped up on the same day they’re unloaded from the transporter.

(more…)

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?
(more…)