Can you renegotiate the terms of your car financing? About 9 months ago my dad bought a new car (he didn't need) and has now come to the realization that the $378/month car payments are bad for his limited finances (forced into retirement and living off of social security; been collecting unemployment but that's only going to last for a few more months; has a very modest retirement account). I have no idea what his options are at this point . . . any guidance would be greatly appreciated!
Thank, everyone, for the responses. Refinancing to combine his mortgage and car payments would typically be a good idea, but due to other circumstances that won't work. But I will suggest to him to try working directly with the bank that the financing is currently through. Otherwise I think the only other logical choice is for him to sell it (probably for a loss -- not good considering his current financial situation) and buy himself a decent used car.
If he doesn't need it, maybe he could sell it. He may loose a little, but that might be less of a loss in the long run compared to the interest and fees.
Usually after a year of payments you can take the note to a local bank/credit union and refinance. Perhaps he should consider letting the car go though and getting something that won't cause so much financial strain.
Not normally something that is done, but yes it can be done. If the loan was for 60 months or more, I doubt the credit company will work with you. Chances are the credit company will add additional payments to the end of the loan, decreasing his current payments. In the long run he would probably wind up paying much more for the car.
Does he own a home? It would make much more sense to take out a home equity loan or line of credit and pay off the car. However, if he is on unemployment, he may not qualify.
Depending on certain factors (amount owed, blue book value, etc), the best option may be to sell the car and purchase one that is within his financial means.
Yes, it can be done. He can talk to the finance company and they may renegotiate. If not he can talk to the bank he uses (if that is not who the car loan is through) and they might finance the loan.
My husband and I have done it both ways. Years ago he renegotiated with the finance company to get a lower interest rate and the loan extended by a year. The payments went down considerably.
The other time we did it we called our bank and told them we wanted to refinance the car through them, and wanted lower payments. They gave us much better terms than the original lender did, and it was very easy to do.
Also, he might try to trade the car in and get a good used car that fits into his budget better.
