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Old 08-25-2009, 11:06 PM
MollyGroove MollyGroove is offline
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Join Date: Aug 2009
Posts: 8
Default negative equity and high interest rates

my fiancee and I are trying to get out of our car because it has a high interest rate (we've had it for just over a year now). We've tried re-financing, and although we have good credit, we were told we didn't have enough established credit. I'm not really sure how much more established we are supposed to be because we haven't missed payments on anything, we have credit cards that are used and quickly paid off. All our bills have been kept up to date (ok, we've been late a couple of times on the odd bill - but this is the extremely rare case). We were looking at trying to trade it in for something with a much lower interest rate. We found a car we liked, worked some numbers with the finance guy from the dealership, and we do qualify for a much lower interest rate. The cost of this new car with the low interest, plus the negative equity from the car we have now, over the same payment period would equal what we are paying now already (only this new car is a lot nicer and has more value than our current car. And we really hate our current car. Not just for the high interest rate.). We were told that the bank would have approved us except for the negative equity. I'm not sure I really understand why as what our current car is going to cost us in the long run due to high interest and what this new car plus the negative equity would cost us is still the exact same amount! We aren't sure what to do at this point. Any suggestions? A co-signer is not an option for us and we really do not want to keep driving this car.
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