Your rates of bank

Dear Terry,
I surrendered my truck to a bank. I called the bank told them why and they told me where to take it. I followed their instructions, then called the 800 number and told them I had dropped it off.
I am a single mother of two with no help. I had no choice. Will I go to jail?
— Jen

Dear Jen,
No need to fear any criminal charges. People get into loan trouble all the time, unfortunately, and the worst that usually happens is their credit rating is dragged down. (more…)

Dear Terry,
I was thinking about buying a new car next year. I have a job and some money saved up, but I have no credit. As a result of having no credit, will I get a low interest rate or high interest rate?
— First car buyer

Dear First,
It’s an unfortunate Catch-22 of the credit business that the two types of people who suffer low credit scores are those who have abused their credit and those who have never had credit. (more…)

The best way to approach buying a new vehicle in any market is to be armed with the most knowledge about the car you want, your credit situation and the types of “offers” the dealership is likely to run past you.

As an automotive columnist for more than 25 years, it’s not immodest to say that I’m probably better versed in the buying and selling of cars than the average consumer.

Yet when I went to buy a new car last month, I was nonetheless amazed at how dealers continue to try to bamboozle and confuse a buyer in an effort to pad the deal with extra charges.

(more…)

It has been nearly two months since the Wall Street meltdown and the credit crunch shook up an already unstable automobile industry.

The bad news for consumers is that despite federal bailouts to banks and automakers, the buying landscape has changed and may never return to what shoppers have come to expect in the last five years.

But if you need to buy a new vehicle in this environment, here’s what you can expect:

1. End of 100 percent financing. Those 100 percent finance deals are virtually gone. This is particularly true of those “we’ll pay off your trade no matter what you owe” negative financing deals. They were to the auto industry what subprime mortgages were to the housing industry. Lenders still in the automotive market are demanding down payments of 10 percent to 15 percent from most buyers, including those with better-than-average credit.

(more…)

Dear Terry,
I have a car loan that is financed at 20 percent. The payments are killing me! Because the interest rate is so high, I still owe $17,000 on an $18,000 loan after almost two years of payments. What is the best way to get out of this?
— Grace

Dear Grace,
If you have adequate credit and a spotless payment record on this loan, your best bet is to refinance and keep paying on the loan until you can get the balance down to where the car is worth more than what is owed. (more…)

Dear Terry,
Can we afford to buy a new car? If so, how much can we afford? We make $80,000 a year. Our take home income after taxes, benefits and 401(k) is $4,300 a month. Our mortgage, including taxes, is $1,060. We also have a student loan of $131 and a tractor loan of $306.
We don’t have any credit card debt, and our cost of living expenses are low, with utilities and all other bills totaling $750. — Hayley

Dear Hayley,
Determining exactly how much of a car loan someone can afford is tricky. It not only involves how much of your free cash you have to spend, but also depends on how comfortable a person is with debt. A car loan that keeps you awake at night — even though you can make the payments — isn’t a good deal. (more…)