A Car Loan gone Bad
Jae’s story….. ****How to go broke buying a Used Car. A friend of mine bought a used car. She paid about retail book value. She had been repairing her credit from some hard times so her credit was not very good. She had been turned down for a couple of loans. She found a dealer that could get her financed at 18%. She spent $20,000 on the used car, it was only a year old and in great shape. The dealer told her if she did not miss any payments for the next year she could probably get it refinanced at a lower interest rate in a year as her credit score increases. He also sold her a warranty for $4,000 that was added onto the car loan. It is now 18 months later. The car has dropped in value by another $3500. She has paid down the loan $2400. She cannot get it refinanced because she is about $5000 upside down in the car. So she is stuck in a car that is depreciation faster than she is paying it off. She got the lo...