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Just bought a car...a little paranoid


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We just got approved last week through Roadloans. It was absolutely the last resort. We were able to get other financing with CarMax, but the rate was actually worse than the Roadloans rate. A different dealership we tried to go through wasn't able to get us anything better than roadloans and CarMax. Yes, it sucks, but we did not enter this lightly. Hopefully soon our scores will be higher and we'll be able to refinance.

 

Now...to my concern. We picked out a car today. Husband went to CarMax with our Roadloans voucher and necessary documents, picked out the car, spent 4 hours there, traded our old car in (for the exact amount of our payoff) and came home with the new car. It's a 2011 Ford Flex with 23,000 miles and I love it.

 

My fear is that something could go wrong even though we've brought the car home. CarMax staff reassured us that it is extremely rare for them to have to ask for a car back. But I'm still worried.

 

We've worked with Roadloans before, back when it was HSBC. Santander bought our loan and we have had our last car with them until today. Never ended up underwater (woo-hoo!)

 

So, my question is, is it really that uncommon for a dealership to ask for a car back when the financing was already approved? Should I be as super concerned as i am (since I've read so many horror stories online about dealerships wanting cars back) or should I consider the car mine? Auto financing scares the crap out of me, but this is where we are right now and things look to get better very soon.

 

thanks for any reassurance (or reality!)

 

Mac

Edited by maclaren5
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The Roadloans approval would have listed its requirements. Such as income verification and so on. Carmax is pretty good at making sure they take in all the required paperwork - so you should be fine.

 

I used Roadloans/Carmax to buy a vehicle last April. High interest rate, but I was at a point where it was that or walk. And walking would have lost me 2 jobs. On the bright side I average about 10 mpg over what I was driving before. (And that car would no longer stay in gear, so it wasn't an option to keep driving it.) So much of what I'm paying in interest, I'm saving in gas. (Drive ~2,500 miles per month.)

 

One thing I will say: it may be near impossible for you to refinance to a better rate unless you aggressively pay down the car note. A lot of what you pay will go to interest, meaning the principal will go down very slowly. One problem with trying to refinance is others may not want to lend as much as you owe on the car. Paying extra on the loan can help with that. Santander will apply extra payments as if you don't need to make your next payment. (My next payment 'due' is at the end of April, but I still send my payment + more each month.)

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The only time I ever had issues with the finance deal not going through is when the deal was signed after banking hours, back when I had great credit and higher income. Basically they called me back and wanted to rate jack me 2%. Even when they backed down a little, I dropped the car off and bought elsewhere and saved some money.

 

It's good that you worked on the approval before going to the dealer. That means once you work out the price, there are fewer obstacles to overcome. As long as your app information was accurate and verifiable and the purchase meets the terms of the voucher, you should be okay. Carmax got their price (since it's non-negotiable) and Roadloans got what they wanted, it should all work out.

 

Agree with GA Girl - if you want to refi try to get that LTV down over the next few months and try to refi with a CU. From what I've seen some credit unions are fine with 100%, others are closer to 80%. Luckily you bought used, so much of the negative was absorbed by the original buyer. Carmax prices their trade/buy offers less than the trade-in values you will see online to build cushion for their own profit. That means that when a CU goes to look at LTV, you might actually be okay - since the ones I tried used clean retail values.

Edited by road2freedom
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The Roadloans approval would have listed its requirements. Such as income verification and so on. Carmax is pretty good at making sure they take in all the required paperwork - so you should be fine.

 

I used Roadloans/Carmax to buy a vehicle last April. High interest rate, but I was at a point where it was that or walk. And walking would have lost me 2 jobs. On the bright side I average about 10 mpg over what I was driving before. (And that car would no longer stay in gear, so it wasn't an option to keep driving it.) So much of what I'm paying in interest, I'm saving in gas. (Drive ~2,500 miles per month.)

 

One thing I will say: it may be near impossible for you to refinance to a better rate unless you aggressively pay down the car note. A lot of what you pay will go to interest, meaning the principal will go down very slowly. One problem with trying to refinance is others may not want to lend as much as you owe on the car. Paying extra on the loan can help with that. Santander will apply extra payments as if you don't need to make your next payment. (My next payment 'due' is at the end of April, but I still send my payment + more each month.)

 

Another reason it's so difficult to refinance subprime loans is many dealers just take your head off at time of purchse. You pay WAY too much for the vehicle and don't realize what happend until it comes time to refi. Bbuyers typically don't care how much the vehcile costs, just that they got thier loan approved.

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