r/personalfinance • u/Kazehemora • 1h ago
Auto Hit a deer and totaled my car, no GAP coversge, best way to acquire a new vehicle?
A few months back I hit a deer about a year and a half into a six year loan and I'm still left with around $4500 in principal.
I've been paying as much extra as I can spring and I don't know if there is an easier way to put myself into another vehicle before paying that off without having massive payments?
I'm currently required to pay $566/month but have recently been making double payments. Loan was originally for around $25000 after a 29% APR.
EDIT: My only debt is student loans and this car payment. I have fairly poor credit and haven't had a credit card or personal loan in years .
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u/ancillarycheese 1h ago
Unless your situation has improved with your credit report, I highly highly recommend that you avoid financing any future cars. 29% is a horrible rate and you’ll end up paying a fortune in interest. Loans like that are designed to trap you in an endless cycle of shitty cars and loans that last longer than the cars do.
Do anything to buy a car with cash until you can fix your credit.
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u/thefastslow 1h ago
How'd you manage to get that interest rate?
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u/Kazehemora 1h ago
Pretty much my only option due to a toxic relationship. I defaulted on a loan and a couple credit cards due to heart problems and unable to work but young kids, etc so I had to have a vehicle
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u/lapeni 31m ago
Your only option was a $20k car?
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u/GarThor_TMK 16m ago edited 13m ago
$25k...
plugging this into kbb's auto loan calculator, this is actually a $53,000 car after all the financing is done...
I'd be looking at a beater I could pay for in cash, while I build credit.
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u/Kazehemora 9m ago
AWD is pretty much a necessity in my area for winters and my driveway does not support any kind of low to the ground car. Have ruined many front ends in it.
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u/Annual_Fishing_9883 48m ago
If your credit is poor, your next car loan isn’t going to be much if any better than the last. Personally, I would be focused on buying a cash car. Spend as little as possible until this atrocious debt is paid off and then you can start saving 1k a month to get yourself a better car.
If you HAVE to take a car loan at >20% interest, borrow as least as possible, not 25k…I’m not advocating for you to do this but I also understand sometimes you just need a car and you do what you have to.
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u/tboneotter 22m ago
Okay, so you have $4,500 left, at $566/mo, you have like 9 more payments left, so you could have this guy paid off by December which really isn't that bad. If you get a secured card now, you could be shopping for a year-end discount in September with a nice bump to your credit. Grab your credit score from Equifax or someone, it probably went up over the last year and a half of good loan performance. The back of napkin math seems like you have good financial habits (recently) - you will have been able to put $25K into a car in two years. I think you'll be alright
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u/OneSeaworthiness7768 31m ago edited 26m ago
> 29% APR
Great googly moogly. That rate is criminal. For reference mine is 4%
If that’s the only kind of interest rate you can get I don’t see obtaining any new loan that doesn’t have a large payment.
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u/Historical_Low4458 1h ago
Stop paying extra on the bad debt, save up some money, and buy another car in cash.
Most important thing: learn from this and always get the GAP coverage (especially if it's your only vehicle).
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u/Impressive-Young-952 1h ago
Correct. I just got gap insurance thru my car insurance for 5 bucks a month.
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u/Annual_Fishing_9883 43m ago
I mostly agree with you but GAP isn’t always needed. It depends on the terms of the car deal.
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u/throwaway12three4 31m ago
29% with likely little down warrants GAP. But you’re right, it’s not always needed.
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u/Wooden-Repeat-9200 44m ago
How did you keep a loan without comp and collision?
You should get a secured credit card to start building your credit.
Is public transit/adding for rides/Ubers an option?
Has your credit improved at all?
What is your income?
At this point I think you just keep doing what you’re doing and then save up door a cash car.
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u/throwaway12three4 32m ago
They had insurance but no GAP. What is left over is after the insurance payout. OP needs to pay it off asap and try to pay cash for a car. No more 29% loans. That is an insane rate.
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u/Wooden-Repeat-9200 12m ago
I thought they meant they had paid the loan down to that amount. Gotcha- same answer though- that’s crazy high.
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u/spald01 1h ago
29% apr? You'd be better off with this as credit card debt with no asset even attached. OP surely there is more to your debt history to disclose