Mortgage and Insurance

I’m sorry to share my life’s history below, but I want to give a full picture of my situation. 

 

Here it is: I want, but don’t need, a new car. Have almost 100k miles on my 2007 Mazda 3. It’s been a good car, but it’s a little small for my needs. My husband is considerably taller than I am, and doesn’t like the lack of headroom, for one. And we occasionally want to drive with friends, but the backseat is nonexistent. This is not an emergency and there’s no need to make poor decisions and no rush. But I would like a new car if we can swing it.  

 

When I bought my Mazda 3, it was the first vehicle I bought without a cosigner, and the first car in my name. I screwed up with some credit cards in college and was honestly just happy to qualify for that loan. It was a 72 month, 10.95% blank check from Capital One. When they pulled my credit at the dealership to try and beat Capital One’s rate, my score was something like 580. Maybe 540? Those payments are $ 419/month and don’t end until March 2013.

 

I owe $ 6,500 on the Mazda 3, but KBB says I can expect $ 6,300 on a trade-in, rating the car as "good" and I believe it’s probably somewhere between good & very good, so I’m not worried about negative equity. 

 

As we sit today, I’ve done a great job of paying my bills on time. I haven’t had any late payments in 5 years, including never being a minute late on my current auto loan. I have several credit cards, with different banks including Capital One and Orchard Bank, but also Discover and Citibank. All are paid off except for one $ 4,500 balance (really my husband’s card, but reporting on my credit report as I’m an authorized user). 

 

My FICO scores through this site are TU: 681 and EQ: 674. Since I have never had even a late payment on my auto loan, I have to imagine my Auto-Enhanced score would be higher. But by how much? Who knows?

 

My husband’s scores are low. Alone, I make $ 79k/year, together we make $ 126k right now, but my husband has a job offer all but in hand that would raise our combined gross incomes to $ 144k. Our student loan debts are about $ 1,000 a month, & the minimum payment on the remaining credit card is $ 110. We have no trouble making our current payments, and though I got a raise recently, and my husband’s looking at a significant pay bump, we don’t really want to go eat all that up in new debt. We’ve been working hard to pay down our cards (they were over $ 12k only 6 months ago) and we’ve been making good progress. We’d probably consider up to $ 50 or so more in a payment, but ideally the new car payment would be the same or less. 

 

I’ve loved my Mazda, and we’d probably look at the Mazda 6 or even one of the crossover vehicles (CX-7, CX-9) before we look elsewhere, but I’d consider a Honda or Toyota next. Beyond that, not sure, but I don’t expect to buy an american car again, sadly. Had bad experiences with my GM and my Dodge in the past. I drive 400 miles a week for my commute so could benefit from gas savings of a hybrid, but I really like the zoom-zoom I get from my Mazda.

 

That’s a lot of info about my car preferences, but the reason I mention it is: looking at those brands, can I expect to qualify for any of the special financing rates from places like Mazda or Honda? Mazda’s offering 0.0% for 60 months plus $ 500 loyalty cash, for example. What kind of credit rating do you need to get that rate? I’ve tried to search, even these boards, but I’m seeing mostly outdated info, so I’m wondering if anyone has any current experience. 

 

Is it reasonable to apply for credit at Mazda online now, or is it better to have the finance department at the dealership do it for you? Do they have more leeway/motivation? Will the results be any different?

 

Finally, when my friend went to buy her car, she was convinced to lease it for now, and then buy it out later, to get the lowest monthly payment. I put a lot of miles on my car, and am certain I’d be over my mileage when it came time to return the car. But the advice she received is that doesn’t matter if you plan to purchase the car at that point. Is there something inherently more risky or more expensive about this type of move? Is it even possible with the numbers I’ve put out above? Because the payments on Mazda’s lease offers are $ 200 less than my current car payment, and that’s tempting. Could I lease for 36 months with the plan to definitely finance the remaining value when the lease is due? Do people do that? Aret here drawbacks? 

 

Thank you so much for your help! I’ve been doing research over the past few months, but there are SO MANY VARIABLES. Any advice that you smart folks could give me would be great.  

RBI’s idea of allowing private companies to set up local banks will prove to be a blunder and lead the country back to pre nationalization era.. Already thousands of Non Banking Finance Companies (NBFC) are scattered all over the country like post offices and they are almost beyond the control of RBI and Government of India. Every year we come to know ten or fifteen NBFC promoters have closed their office and flied away from town after cheating crores of money from innocent small villagers , traders and farmers by promising them to double their money in two or three years. Similarly cooperative banks and many regional rural banks in the country are mostly running mismanaged and their assets shown in Balance sheets are mostly irrecoverable.

If small private banks are set up in all small villages, towns and cities, more and more people will be cheated, lending will be done after keeping gold as done before nationalization of banks or credit will be disbursed only after mortgaging landed properties of farmers. Same Zamindari system and exploitation of poor by money lenders in disguise of local banks will come in operation and become the way of life as was prevalent before Nationalization of banks and before freedom of India. It is not exaggeration to say that even now small traders and farmers have to depend on local money lenders and it is also an open secret that these money lenders are charging huge interest and exploiting their poverty.

When RBI is unable to control less than thirty Public sector banks and thousands of NBFC, regional rural banks and cooperative banks already in operation and doing the same job, how can RBI imagine of controlling of additional numerous private banks. If the monitoring is not possible, allowing private companies to set up local banks will prove fatal and make the life of local poor residents more miserbale.Through this new concept of local banks RBI will do nothing but add fuel to fire. Government banks are already in mess and there is no doubt in it. Even farmers and small traders cannot dream of any relief from such local banks for whom Local banks contemplated by RBI will be set up by private companies.

It is to be kept in mind that government can waive loans disbursed by government banks, but cannot force private companies to waive agricultural loan or small loans. Obviously private companies will hold full securities and charge maximum interest from needy person and extort more and more profit as private airlines are looting air passengers keeping in mind the necessity and urgency of passenger. As such, the said idea of local banks contemplated by RBI in not going to help poverty ridden person in any way. Government is indirectly attempting to discard agenda of social inclusion and leave poor person on the mercy of local goondas and local money lenders in disguise of local banks.

Every one knows that private banks cannot allow their assets to become NPA (Non Performing Assets) and cannot depend on the current legal framework and ineffective judicial remedy for willful defaulters. They may also seek the help of recovery agents to apply force on defaulters which government cannot manage to support in our country and which was vehemently opposed by RBI itself in the recent past when private banks like ICICI or HDFC used local goondas to recover their money.

Moreover setting up of lacs of local banks as visualized by RBI and promoted by private companies is against the very concept and plan of Government of India directed towards consolidation of existing banks. It is ironical that on the one hand existing banks are advised by Finance Minister to go for merger and acquisition to reduce the number of banks and on the other RBI is advising private companies to set up local banks. There is no doubt that Government of India must ponder over the idea of RBI , invite opinion from experts and seek opinion of various political parties before putting the said dangerous idea in action.

Danendra Jain

Ganaraj Choumuhani

Agartala

My husband is the breadwinner in the family (I am at home with our 4 young boys) and he had a bankruptcy back in 2003. Anyways, his credit is not the best however, in 2006 we obtained a mortgage after some struggles due to his credit.
My question now is, how hard will it be now to get an auto loan after getting a mortgage? We are in need of a new car, and I don’t know if I should even bother going to the local banks, or if I should go directly to a subprime lender. Any advice will be appreciated! Thank you….