Holy *BLEEP*, I am going back to Drive Financial!!

[AboveAverage]

Back in 1/2008 I got an auto loan for $20k with 24% interest because I really needed a car. At the time my credit was horrible and could only get Drive Financial (now Santander Consumer). About 5 months later I was able to refinance with HSBC Auto to a better 18%. Was happy that I was at a better rate and with a better bank.

 

I am sure many of you read yesterday's articles with HSBC selling their Auto Loan business to Santander

[ http://www.sdbj.com/article.asp?aID=142371 ]. That was seriously the most depressing news ever. Drive's customer service is friggin horrible!

 

Here is my dilemma. I have about 6k-7k in negative equity. Any extra payments I was making wasn't going to principal, it was going to next month's payment, even after I noted it on my check that I wanted principal to be paid. BOA was willing to refinance me, but they want me to get rid of the negative equity. I'm trying to just get rid of the loan period (fully paid off, of course )

 

I would love to find a lender/CU that will refinance my entire loan. It will be 3 years this coming May, and I would do a 3 year at this point. I would even refinance for a higher rate just so that I didn't deal with Drive (they will always be Drive to me, and man don't get me started on the CSRs.....I'll be flat out banned LOL!) I don't have the 6-7 grand to refinance right now. I would have near that amount this time end of next year.

 

What do you think? Am I stuck with Drive? I am high 600s in EQ, EX I'm Prime and TU is clean with 720. I would get a human rate. I really need some help and perhaps comfort with this. I understand that I knew what I was doing when I got the crappy auto loan, but man I needed a vehicle to just get around. The 5 years of just busing and training it had run it's course (not to mention the cabs). I just don't want to give Drive a single dollar because they are seriously that God Awful.

[MarvBear]

Automotive lenders are increasing resistant to carrying negative equity from a prior auto loan into a new loan.

[AboveAverage]

Automotive lenders are increasing resistant to carrying negative equity from a prior auto loan into a new loan.

 

 

So basically, I have to pay this negative equity down OR pay off the loan...I was just hoping there might be another way. And no, I'm not rolling this loan into a new car by trading it in....I read too much about that game.

 

Is there really no other option? I @#$#ing hate Drive!

[MarvBear]

BOA was willing to refinance me, but they want me to get rid of the negative equity.

 

You pretty much summed up most prime banks' position on the matter.

[builder2500]

Have you tried Capital One or Chase?

[MarvBear]

Have you tried Capital One or Chase?

 

 

Neither of those two are good for overadvances in general.

[mk_378]

You need to really ride them until you get your extra money properly applied to the loan principal.

 

With that much negative equity your only option is to drive slow and pay fast for a while.

[AboveAverage]

I was just hoping for another option I was not already familiar with. I'm left with 4 options.

 

1) Continue on with my loan.

 

2) Pay down the negative equity and then refinance with BOA or CU (BOA is preferable for me because I have a checking account/mortgage/CC with them).

 

3) Pay the loan in full

 

4) Go the P2P (e.g. Prosper) route and ask for the full amount of payoff.

 

Let this be a lesson for all of you looking for an auto loan. Fix your credit first, at any cost. The only positive thing this loan as done was help increase my FICO score to be in the 700 club. However, the unintended consequences will hurt just as well. My car will probably be worth at maximum $6k if I decide to trade it in after the loan. Though I'll probably keep it for 5 more years, so lets make that $2k.

 

For those desperate for wheels like I was in 2008, really consider your options. Do some reading on edmunds.com, save up for a considerable down payment (20%) and go for a loan no more than 48 months. I only wish I had done so in 2008, but I really had no choice. Now I have to live with my decision. But like I said, the only good thing about this loan was that I have a high FICO (no doubt my auto-enhanced is very high).

 

Between me saving for 5 years after my loan is over plus scores that will by that time be in 800s, a 2018 Mercedes E-Class fully loaded doesn't seem like a pipe dream.

 

On second thought, maybe I'll get a practical car while I'm working in 2018 and get the S-Class in retirement....by that time, the car should be driving itself. I forgot for a second where I currently work. LMAO.

Edited November 14, 2009 by AboveAverage

[hoapres]

Not a reflection of your credit but simply a matter of tougher lending criteria. As others said "Drive slow and pay fast". Check your loan agreement as you might have to send principal reduction payments to a different address. Principal reduction payments should always be a separate check and NOT included on the monthly payment check. Once you get the negative equity removed then try doing a refinance. If you can (may or may not be doable) pay an extra $500 a month then you should be out of negative equity in about a year.

[gmetz]

Hey OP,

 

I was in a similar scenario as you in Jan 08 as well. I HAD to have a car and financed through Road Loans (which turned into a Drive Financial, then a Santander loan) at 12.49% on a 5-year old $8000 car. My payments are really low ($151) but I'll be paying it off until 2014 (what was I thinking). I went into my CU last week and tried to refi but was unable to because I am upside down about $2000 on the car. I'm going the drive slow, pay fast route. I make an extra payment every 3 months. It should knock my loan down to about 4.5 years. I just need the car to get me through the next 18 months or so and I'll be trading it in on something new.

 

I don't think anyone mentioned it yet, but what about a personal (unsecured) loan to cover the difference? Just a thought. I think some of the big CUs that everyone on here talks about (Penfed, NFCU, etc...) offer these.

 

I really can't say anything about their customer service, I haven't dealt with them at all since the loan originated. I send the payment 2 weeks early electronically, and make sure they get it.

 

Good luck!!!