Your rates of bank

Dear Dr. Don,
I’m 19 years old and have a big problem on my hands. I work as a civilian for the government and need a way to save money on gas.
My current ride is a 2004 Chevy Silverado LS extended cab. I’m paying $400 a month on a loan that is in my uncle’s name, with a loan balance of $12,500.

The truck gets about 15 miles per gallon in the city and 25 mpg on the highway. I live about 30 miles from work and there aren’t any mass transit or carpool options available to me.

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Dear Terry,
In 1998, I had an accident. Mercury insurance paid off the dealer. However, the dealer is after me to pay the interest on the car, as if I had had it five years. Bill collectors have been aggressive trying to collect. What can I do?
— Barbara

Dear Barbara,
If your e-mail is accurate, you’re saying that 10 years after the car was totaled and the insurance company settled with the lien holder, you’re being pursued for a balance due? (more…)

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. (more…)

A few weeks ago, I responded to a reader’s question about the possibility of putting the purchase of a new car on a credit card.

Based on my personal experience — and that of several friends who tried to do this — I replied that most dealerships won’t allow the full purchase price of a car to be put on a credit card.

Some will allow part of the purchase price — sometimes as much as $5,000 — to be put on a card. But they balk at putting the full price of a car on a credit card because the dealership must pay the credit card company a fee that ranges from 2 percent to 3 percent of the purchase price.

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Dear Terry,
My wife recently bought a car and listed her name as the only owner. She refuses to add my name to the title. We live in Arizona. What can I do, if anything?
— Todd

Dear Todd,
If your wife bought the car on her own, she doesn’t have to put you on the title — or even let you drive it.

Depending on the divorce laws in Arizona, however, her car may be considered community property and you might be entitled to a share of it if you ever split.

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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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Dear Terry,
In an earlier piece, you advised rebuilding your credit by getting a high-interest credit card. I have an auto loan that I was able to keep despite my bankruptcy. Does this qualify as credit rebuilding?
Also, I checked my credit score recently and it is 580. Could this score possibly get me an auto lease or is it too low?
— Sherri

Dear Sherri,
Making payments on a current auto loan will help your credit in the long run, but you can’t expect your credit score to rebound quickly. And I’m sorry to say that a 580 score probably won’t get you a lease or even a conventional loan that doesn’t carry a painfully high interest rate. (more…)

Dear Terry,
Is there anything to beware of when it comes to gap insurance coverage?
— Steven

Dear Steven,
Gap insurance usually comes into play on a leased vehicle. It’s supplemental insurance to cover the difference between what a vehicle is worth and what is owed in the event the leased vehicle is totaled in a crash or is stolen and not recovered. The cost is usually a part of the lease. (more…)

Dear Dr. Don,
Let’s say I have a car loan at 4.9 percent interest and still owe $10,000 on the car. I also have a 15-year mortgage with a $65,000 principal balance at 5.125 percent.
What would be the better option to put the money toward? If I had $5,000 to put down toward one loan, which loan should I choose to save me more in the long term?
— Mark Misgauging

Dear Mark,
It’s an interesting question. Assuming you can use the mortgage-interest deduction on your income taxes, the home loan has a lower after-tax cost than the car loan. Conventional wisdom would have you pay down the higher-cost car loan. (more…)

Dear Terry,
I have a new car that I just brought about three months ago. I am still paying on it but I really don’t like the car. Can I trade it in this early?
— Cynclaire

Dear Cynclaire,
You can always sell or trade in a car, but in your case — assuming you financed the purchase — you almost certainly owe more than the car is worth. That means you’ll likely have to pay thousands of dollars to cover the difference between what the car is worth and what you owe.

A dealer may offer to roll over that difference into the loan on the new car, but that path will eventually lead to disaster because you’ll be even deeper in the hole. My advice: Learn to live with the car until you can afford to trade it in without having to come up with cash to cover the loan balance.

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Suppose you’re nearing the end of the lease on your luxury sedan, and you’re pondering your options.

You can simply turn the vehicle back in and walk away or get into a new lease.

Or, you could buy the vehicle and possibly turn a profit.

Until recently, people leasing some luxury cars often found that their vehicles were worth more than the lease contract’s residual — the amount the car can be bought for at the end of the lease. This was particularly true if they had fewer miles on the odometer than allowed by the end of the lease.

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