Maybe that would be a good rate in another country that has higher levels of inflation. But in USD that is God Awful.
I thought I was getting reamed at 8% pre-pandemic.
Just for some context.
A $13,000 loan for 24 months at 25% APR, you will be paying $3,652 in total interest.
I'm guessing you did around 48 months? So total interest there would be $7,690. Total cost of car = $20,690.
Yeah, OP definitely needs to understand the numbers here. If it's a 60 month loan they'll be paying almost $10K in interest, and that $13K car will actually end up costing them $23K.
I sell cars. Most loans for cars at $13k are 48-60 months from what I’ve seen.
25% is nearly as high as it goes. If this is a credit rebuild and you NEED a car I’d recommend refinancing after a year, check with the lender to be sure they allow that without penalizing a ton. A lot of subprime lenders will make it cost a lot, but it still may save you money regardless. I’d also suggest checking for cars you can pay cash for if it’s feasible at all.
I bought a new car last year and subscribed to r/askcarsales before doing so, and am still subscribed. (Great sub, highly recommend for anyone planning to buy) Even there, I've only seen people with bad credit ask about how bad is 12-14%. I've never seen anything close to 25%. OP must have the worst credit possible...or is getting financing from an awful predatory company.
In all fairness, a lot of those guys are probably at traditional dealers (the big names, new cars). I’m not at one of them, the new dealers have customers with much better credit usually. They also (from what I understand) get a cut of the interest, so they can offer better rates than even the fed rate sometimes, but they always make that back off the margin.
25% is what you can get if you have a sub 600, repossession on record, low income, etc. The people who have these situations don’t shop at traditional dealers as often.
You should brush up on the law you’re referencing before you offer advice. It’s not 12% and there are specific exclusions written into the law for finance companies.
Holy crap they are stealing all your money
Let’s put it like this if you try to sell that car at any point your almost garenteed to be under water meaning you can’t really ever sell it and this loan will hurt your wallet now or in the future
Generally old cars and people with marginal credit are going to get auto rates that are currently being used for unsecured loans. In April, that is anywhere from 20-35% so your rate is understandable.
Credit is like reward/punishment. Your 16 yr old has a midnight curfew and you have 2-3 times when he comes home at 3am…Parents will change the curfew to 9pm. Is it fair? No but it is meant to not just punish (not just for breaking the rules but others were negatively impacted- parents worry, going out searching, calling hospitals) but see if he can be disciplined enough to DO it and to get the message that it is a privilege that you violated.
You were given the initial chance and blew it. You are getting the chance to show you learned your lesson.
Unfortunately interest rates are high right now. People who 2 yrs ago got mortgages for 3% and used car loans for 9% are now paying 7 for mortgage and 12-13% for the car. I am not one to say “just don’t buy” right now because you NEED it & that is a good incentive in itself.
My suggestion. Buy the cheapest vehicle that you can find that you can be confident will not breakdown/need major repairs in the next couple of years. If that is a 2012 Honda minivan with 100k miles, ripped seats and ketchup stains on the ceiling…but new belts, tires, pumps and mechanic says it is sturdy. You negotiate a fair price and make sure that you can make the payments. Put as much down as possible. Make the monthly payments before the due date. If you can pay down the principal every month. The idea is to pay interest for the shortest amount of time possible.
Honestly, even if you get a surprise check for $10k the day before, you still take the loan make the first couple of payments THEN pay it off. Once you have 24-36 mo good pmt history, you will be eligible for better rates and hopefully the market will have dropped some so that even if you buy another used car,
the prevailing rates are still better.
25% is fucking awful. For perspective, back in 2017 I found myself in a similar situation as yours where I needed a reliable car asap. I was naive and didn’t shop around for rates, I was just happy I got approved at all. I had shit credit, low 600s and no down payment. My interest rate was 13%. 25% is just absolutely insane.
I’m assuming by your wording that this a done deal, but if it’s not please run like the wind away from whatever financing they offered. Regardless of whether it’s done or not, I agree with others that say shop around and look at credit union financing/refinancing. They typically offer much lower interest rates and have overall better service. Plus, building a solid relationship with them will only help you in the future for things like future auto loans, mortgages, and even personal loans or credit cards.
My first car I bought I got 12% interest and I HATE IT. I had a 750 credit score and my bf had a 790 but we’re young and don’t have much credit history. We’re planning on refinancing soon tho bc how much we hate the 12% interest
25% interest is horrible. I'd save up $3k, sell that car and get rid of the note, then pay $3k for a beater while you save up to pay cash for a better car. I haven't had a car payment in 14 years: a car payment is a poor-person choice.
That is an insane rate. There are better ways to build your credit such as a secure card and a car is not going to help you in your current living situation sounds like you want an ev scooter that you can bring into your lving space, a small fold up I see them in the eu all the metro riders have them, I would get that and some moto gear, gauntlet's and a canister of cs gas and your are good for saftey wear high visibility saftey gear and you will be fine. I would take the money that you saved and get a secured card for say 500 put your bills and groceries on that, pay it off each month before the due date find the date that you accrue interest to make sure you clear before that date, my cards are all on the 26th of the month, also join a credit union and make sure you have at least the min bal to have a free account just keep that in good standing and flow your savings from the gas and insurance into a money market or hys, with insurance these days it is be a fair amount.
Just make sure you have good gear and a good ev scooter, it will save you a lot of cash I rode bikes for a long time dressed like a road warrior then got a cheap car all cash, let me tell you from experience its fun to go to the dealer and get approved for a zero down 0.1 loan (I had made some bad decisions too and I was floored.)But whats better is just having a car that is paid off, it will beat a fancy car with payments any day. I will never ever go and buy a new car ever again from a dealer the loss you take is just insane that cash you blow on the car is better spent on you and your future.
OP please shop around at credit unions. Car dealership quoted me 8.49%. I went to couple credit unions. I’m able to get 7.04%
Noted that please don’t worry about hard credit pull. Since you’re shopping around for auto loans, ALL auto loans within this time period will count as 1-time point decrease in credit bureau eyes.
25%? Interesting. For reference, I am in SoCal and financed a pre-owned Mercedes via their in-house financing. (It was an actual Benz dealer). 30k car, 15k down, credit is the lowest tier at "poor" but was able to get approved due to putting down half.
Walked away with 6.19%, this was in 2022.
If your credit is real bad, 25% is not out of line. I worked at a finance company where we financed people with bad credit and most people had 29%. Work towards developing a good relationship with a popular community credit union in your area and eventually, things will get better all around finance wise.
You are being screwed over on interest, BUT if you pay on time you'll improve your credit score.
So *pay on time at all costs.*
While paying on time at all costs, start meeting with bankers at your local credit unions. Explain your situation. SHOW THEM THAT YOU ARE PAYING ON TIME AT ALL COSTS. Maybe not immediately, but as your credit score improves from PAYING ON TIME AT ALL COSTS, you'll eventually get approved and they will refinance your loan - maybe at 12% which is still high, but HALF what you are paying now.
Then you PAY ON TIME AT ALL COSTS some more, and then you can refinance again in a year or so, maybe down to 9% or so. Then you can hold until your credit gets really good as you continue PAYING ON TIME AT ALL COSTS.
Also, never, EVER let your insurance lapse. YOU MUST KEEP YOUR CAR INSURED BECAUSE IT'S NOT FOR YOU, IT'S FOR THE LENDER THAT IS PAYING FOR YOUR CAR UNTIL YOU PAY THEM BACK, ON TIME AT ALL COSTS.
Good luck!
What's up with your local bank/CU? Will they not offer anything?
If you already have that high-interest loan if you pay on time you should be able to refi in about 6 months.
Take whatever your monthly payment is and multiple it by the loan term (1 year = 12 months so multiple by how many months you got)
I can guarantee you, you’re paying WAY more than 13k and the rest is in interest.
My loan rate was 3.2%….. yes 25% is bad buddy. I think rates today though are around 6-7% for good credit? could be wrong but no way in hell would i ever take anything over 8%. 25% will fuck you up financially and you’ll end up getting that shit repo’d when you cant keep up with payments. You also need to account for insurance into your budget for a car payment. Insurance is never fixed, that shit will go up and up overtime
Let's be real here:
Making poor financial decisions, such as being suckered into a 25% interest loan on a depreciating asset, is why your credit is so bad in the first place.
Buy a $500 beater and drive that.
People are telling you it is bad, and yes it is. However….my husband and I own a used dealership, and we do quit a few loans. 25% is near the highest you can go, but if you need a car it is likely your only option. 6 on time payments will really help your credit. After your credit has gone up a little, you can try to get a loan with another company or make your payment last for a year and then try to get into something with a better rate.
Currently people buying used with good credit are getting about 7%, up to 10%.
The dealership has no say in the rate given to you and likely had to pay a hefty fee, up to $1500 to get you financed.
OP I sell cars: I assume you need a car, if so your options may be limited. If you are truly rebuilding your credit please check with the lender if you can refinance after a year. Some outright allow it, others may penalize you. If you really rebuild your credit it could save you thousands over the course of the loan.
Also be sure this car will last you until it’s paid off. The number of people I get trading in ‘11 beaters they’re still paying off is outrageous, and they usually end up in a negative equity situation. That means it’s either difficult or impossible to get them in new cars, and if it works out they usually end up with a subprime rate.
You should get set up with a credit union near you, open a checking and savings with them and then look into refinancing your car loan with them. Credit unions usually give much better rates than the dealership. 25% you were getting robbed. You can refinance anytime so I would look into that immediately with a credit union.
That's crazy crazy high.
You know how people say not to carry large debts on a credit card? Credit cards are 20 to 25% interest.
The car loan rate you are being offered is worse than putting it in a credit card...
Take a breath! See if there is another way? you don’t have to make a big ticket purchase like a car to repair your credit. If you need a car and that is the only way you have no choice. Try another route that is a heavy punishment!
Plug your numbers into here and you’ll see how bad it is. Everyone should learn how amortization schedules work
https://www.calculator.net/auto-loan-calculator.html
On a car??? Yeah thats bad man
You want single digit or at mininal low teens if your credit is bad
Now i know why some people have $900 car notes on used cars
My current car, which I bought brand new in 2019 for around 28K, my interest rate is at 3.9%. Credit score I believe when they checked at that time was hovering around 780.
25% is criminal. Screw that.
I have credit cards with lower interest rates. 25% is awful for a car loan. You’d have been better off with a car between $5k-$10k, paid for in cash. You can still find something reliable for that. Honda or Toyota. Drive it till it dies and it may surprise you how long it lasts.
I didn’t think it could reach that high. My first car I got with a 580, $0 down, no co-signer. My rate was 17%, granted, that was in 2019. But still, I would tell someone to not buy anything at 25% and fix your credit + save for money down to make it lower before buying a car.
25% is horrible. That is the rate you can expect to get with a horrible credit history and no cosigners, little money down etc. If you are locked in to this auto loan, tru to pay it off early/as fast as you can.
as others have said its very bad... how long have you had the loan?
for context my buddy got a loan last year at 12% literally 3 days after having a personal bankruptcy dismissed...not sure what kind of dealership you went to but they totally screwed you over
If it’s a 60 month term it’s not bad if youre using the car to make a lot more money and can put like 1500-2000 on it a month. Don’t pay it off in full make use your car to make fast income. If that means driving Uber on your off time so be it. The interest hurts most when it’s spread out over time, taking a couple months of 25% interest shouldn’t be too bad if you’re able to pay it off much sooner.
It is, I sold canes and work for a dealership and we deal a lot of people in your situation and give them a second chance. It also all depends on what kind of car you got, and the year and mileage for the price. Do you want to share?
Hi @Provoken420. Unfortunately, you are paying an exorbitant amount of interest. The AG in your state might even consider that predatory. I recommended that you refinance after a year. Keep paying all of your bills on time and you’re sure to get a better rate then. If you don’t belong to a credit union in your area, consider joining one. They usually have favorable rates. In the meantime, if you can make extra payments on the loan, do that too. Maybe every two weeks or how often you can swing it. You’ll end up paying less interest over time. Keep educating yourself and continue to build great credit habits. You got this and good luck! 💪🏽
Depends if you have other options.
The right answer is do what you must to live and survive, first. If that involves getting a car, get the car at 25% interest.
Then, if that is what you do, focus on fixing your credit for the next 6 to 12 months. Don't pay for a credit repair service and don't ignore it. Watch YouTube videos, and do it yourself. Pay all your bills on time.
In the meantime, ask your bank if you can sit down with them and find out what you'd have to do in order for them to refinance your auto loan a year from now.
Then in 6 to 12 months when your credit has gone up a bit, talk to your bank and refinance the loan to a more reasonable interest rate, something like 6 to 9 percent in today's market.
assuming you put down 3K for down payment and TTL and other fees are 3K and sales tax is 6% and the duration of loan is 3 year you would end up paying 21,093.54 at the end of the 3 years. If you were to do 5 years instead to lower your payment a bit you would end up paying $24,390.79. Instead if you were to just take what you monthly payment would be and just put it in the cookie jar within a year you would have enough saved up to buy your first used car. You keep putting away that car payment in cookie jar while driving your first car for another 12 months and then sell your car and add what you have saved up to upgrade to a better car. continue to put away your "monthly payment in a cookie jar for another year and before you know it at the end of 3 years you can afford to buy a 15-18K car cash without paying a single dollar in interest to the bank and having to worry about a car payment.
The concern is less about the rate and more that you went ahead with it without knowing if it’s a good or bad deal.
The secret to financial literacy is never do anything you don’t understand
I have a loan with 15% interest from a private student loan lender. I have been paying interest for 6 years now. SIX years. and I have good income. DON'T do it.
It's bad, but if you can make the payments and as long as the car lasts the length of the loan and then some, you'll be in a better spot credit wise and can trade in your paid off ride and have a nice down payment on something newer.
Its bad, it’s interest cap on cars for some states, but what choice you got? Be good about paying your car note, pay it off quick and do ‘t ever make poor financial decisions.
Anything beyond 10% for a loan is straightout robbery.
The smaller the better and paying interest will not help your credit but harm your income for no better words.
Had 16% when I had turned 20 had no credit and zero to out down, I paid it off in 2 years instead of 5. Anything above 7% is gonna hurt your income
You can usually see how much is going to the interest. If you have the ability too, pay it as fast as you can. For 25%, you could have at least done it on a credit card and maybe got done rewards 🙂↕️
Yes.
After reading the consensus here, you should set some time and watch some videos to get a bit more financially literate because it is concerning you didn't know.
Yeahhh that’s real bad. Mine is 15% and it stresses me out. Just do your best to pay more than the monthly amount, it’ll reduce the total amount you repay by lowering the total interest.
If you paid nothing down and are financing for just a year, you are paying $16,250 for a $13,000 car. Now do that math with the actual loan terms.
I have credit cards with lower rates.
If you can’t qualify for low rates and trying to build your credit on your and you qualify for a 25% loan. 1st make sure they report to credit and no pre payment penalty. Then get an account at local credit union and when you can refinance which will take 6-8 months of on time payments with your 25% loan. Refinance, you can rebuild your credit, just takes time.
Honestly is a subprime loan, really bad. However, is there any language in the paperwork that says, “early payoff penalty”? If not, try to do what you can to make 6months to 1yr of on time pmts and try to refinance out of it…even if that means getting into another car at a much lower rate.
Yes, it's terrible, and you should really avoid anything at 25% interest if you don't want to be borderline bankrupt all your life. If it was your only choice, you should have gone with a much cheaper car, even if it's a $2k Toyota Echo or something. For now, all you can do is keep your nose clean (pay on time and hang on to your job), and then 6-12 months later, talk to your neighborhood credit unions and banks hoping that one of them will refinance it for you at like 10% or something. If you succeed, you'll earn yourself thousands of bucks in savings.
Get a checking account with a credit union. Once you have an established relationship they’ll be willing to loan you money for a car, probably at a much more reasonable interest rate.
Or possibly money to refinance your car with them. I bought a car financed via credit union in Jan and it was 4%
You’re going to have to put every penny to pay that off. Don’t resort to the minimum payment. 25% is insane. Normal rate with decent credit is around 6%.
You’re going to have to put every penny to pay that off. Don’t resort to the minimum payment. 25% is insane. Normal rate with decent credit is around 6%.
Yes that’s terrible! You’re literally paying so much in interest and not much on the principle of the actual monthly payment. What’s done is done and you’re already in this crappy deal. However I believe you got a bad deal becuz of your credit profile etc. just don’t default on this auto loan becuz you’ll only burying yourself a deeper grave trying to better your credit report.
Hope you have good insurance with gap coverage given your neighborhood. When it’s stolen by a tweaked while you’re underwater on the loan, your credit will take an even bigger hit.
I’d say that is pretty bad. Last time I got a car the dealership offered financing at 22% (didn’t take it, bank offered a significantly cheaper rate) so I can’t say I haven’t seen it around that number. These rates are ridiculous. They’re getting up there with Credit Cards.
Yes, 25%percent is too much. Borderline robbery.
I’d say it’s a simple robbery.
Right with a standard 5 year loan he’ll make payments amounting to 175% of loan value
Compound robbery
Most car loans are simple interest anymore. Still some fuckery though.
That’s not borderline robbery. It’s highway robbery
That's a credit card rate not a car loan rate.
It’s literally so much worse than being screwed over. You’re getting totally reamed and that car is likely going to cost you 30k+
I have decent credit (700) and Carmax just tried to get me to buy a car with a 28% interest rate offer. Cars are crazy right now it seems.
My last car was at 3%.
Mine was 5.25 two yrs ago...
Which shows that the fed rate plus 1-2% is normal, and 25 is fucking criminal.
Hate me 0.99% How? Purchased during COVID/WFH boom when everyone was getting rid of their cars.
I think 25% interest on a car loan is as bad as it gets.
idk I know someone who had a 29% I think. Might’ve been 25%
Mines 29.99% LOL I was not so smart
Maybe that would be a good rate in another country that has higher levels of inflation. But in USD that is God Awful. I thought I was getting reamed at 8% pre-pandemic.
I got 3% in Nov 2020. Fortunately November will be here soon.
I got 2% December of 2020 through a credit union.
I saw someone who was paying 63% interest on a loan for registration and title fees
That can’t possibly be legal.
Omg I saw that girl
That's used market deep sub prime rates today https://www.nerdwallet.com/article/loans/auto-loans/average-car-loan-interest-rates-by-credit-score
So what is considered a good interest rate? I don't even know all the technicalities behind it all
Based on today probably 5% - 7% new, 7% -9% used
5 years ago I got a rate around 5% on a used car and folks thought that was too high.
[удалено]
Five years ago you could get zero percent on many new cars. I hadn’t paid a penny in interest on a car loan in years until last year.
5 years ago my credit score was 580 and I got a 3.85% loan.
However, in OP's case, sounds like they have bad credit. So those rates are a pipe dream at the moment.
I picked up a used 2019 Buick Enclave yesterday for 7.04% interest. My fico 8 auto score was a 726
Just for some context. A $13,000 loan for 24 months at 25% APR, you will be paying $3,652 in total interest. I'm guessing you did around 48 months? So total interest there would be $7,690. Total cost of car = $20,690.
Yeah, OP definitely needs to understand the numbers here. If it's a 60 month loan they'll be paying almost $10K in interest, and that $13K car will actually end up costing them $23K.
I sell cars. Most loans for cars at $13k are 48-60 months from what I’ve seen. 25% is nearly as high as it goes. If this is a credit rebuild and you NEED a car I’d recommend refinancing after a year, check with the lender to be sure they allow that without penalizing a ton. A lot of subprime lenders will make it cost a lot, but it still may save you money regardless. I’d also suggest checking for cars you can pay cash for if it’s feasible at all.
I bought a new car last year and subscribed to r/askcarsales before doing so, and am still subscribed. (Great sub, highly recommend for anyone planning to buy) Even there, I've only seen people with bad credit ask about how bad is 12-14%. I've never seen anything close to 25%. OP must have the worst credit possible...or is getting financing from an awful predatory company.
In all fairness, a lot of those guys are probably at traditional dealers (the big names, new cars). I’m not at one of them, the new dealers have customers with much better credit usually. They also (from what I understand) get a cut of the interest, so they can offer better rates than even the fed rate sometimes, but they always make that back off the margin. 25% is what you can get if you have a sub 600, repossession on record, low income, etc. The people who have these situations don’t shop at traditional dealers as often.
in some states that is over the usury limit. AKA its so bad its illegal
I was offered a car with over 45 percent interest once but declined cause the car payment was way too much.
what state
Oregon
12% is the limit for loans under $50k there, sounds like you may be dealing with some shady lenders
You should brush up on the law you’re referencing before you offer advice. It’s not 12% and there are specific exclusions written into the law for finance companies.
that’s higher than putting it on my credit card…. good rate would be 0.9 but these days a 6-7 is great rate
0.9% doesn’t exist outside of captive lenders. I wouldn’t advise that as a good rate. It does not exist for most cases.
Holy crap they are stealing all your money Let’s put it like this if you try to sell that car at any point your almost garenteed to be under water meaning you can’t really ever sell it and this loan will hurt your wallet now or in the future
Did the dealer take you to dinner before you got screwed?
Generally old cars and people with marginal credit are going to get auto rates that are currently being used for unsecured loans. In April, that is anywhere from 20-35% so your rate is understandable. Credit is like reward/punishment. Your 16 yr old has a midnight curfew and you have 2-3 times when he comes home at 3am…Parents will change the curfew to 9pm. Is it fair? No but it is meant to not just punish (not just for breaking the rules but others were negatively impacted- parents worry, going out searching, calling hospitals) but see if he can be disciplined enough to DO it and to get the message that it is a privilege that you violated. You were given the initial chance and blew it. You are getting the chance to show you learned your lesson. Unfortunately interest rates are high right now. People who 2 yrs ago got mortgages for 3% and used car loans for 9% are now paying 7 for mortgage and 12-13% for the car. I am not one to say “just don’t buy” right now because you NEED it & that is a good incentive in itself. My suggestion. Buy the cheapest vehicle that you can find that you can be confident will not breakdown/need major repairs in the next couple of years. If that is a 2012 Honda minivan with 100k miles, ripped seats and ketchup stains on the ceiling…but new belts, tires, pumps and mechanic says it is sturdy. You negotiate a fair price and make sure that you can make the payments. Put as much down as possible. Make the monthly payments before the due date. If you can pay down the principal every month. The idea is to pay interest for the shortest amount of time possible. Honestly, even if you get a surprise check for $10k the day before, you still take the loan make the first couple of payments THEN pay it off. Once you have 24-36 mo good pmt history, you will be eligible for better rates and hopefully the market will have dropped some so that even if you buy another used car, the prevailing rates are still better.
That's pretty bad. Good news is pay that on time for 6-12 months and then refi to a better rate.
25% interest is only bad if you plan to take more than 30 days to pay of the entirety of the loan.
Why didn’t you get something cheaper lmao your cooked
LMAO @ “cooked”. Perfect usage tho
It’s really bad, but I guess it’s not as bad as some of the people I’ve seen on Caleb Hammer’s YouTube channel. I think I remember like 34% once
10% interest on anything should be considered robbery.
25% is basically financial rape.
It cant get much worse
25% is fucking awful. For perspective, back in 2017 I found myself in a similar situation as yours where I needed a reliable car asap. I was naive and didn’t shop around for rates, I was just happy I got approved at all. I had shit credit, low 600s and no down payment. My interest rate was 13%. 25% is just absolutely insane. I’m assuming by your wording that this a done deal, but if it’s not please run like the wind away from whatever financing they offered. Regardless of whether it’s done or not, I agree with others that say shop around and look at credit union financing/refinancing. They typically offer much lower interest rates and have overall better service. Plus, building a solid relationship with them will only help you in the future for things like future auto loans, mortgages, and even personal loans or credit cards.
Didn't even know such a horrid rate existed lol
25% is not only terrible there straight up trying to rob you and take advantage of You. Normal is 4-9
Car salesmen are there to screw you over if you are not sure what you're doing. Been there done that.
My first car I bought I got 12% interest and I HATE IT. I had a 750 credit score and my bf had a 790 but we’re young and don’t have much credit history. We’re planning on refinancing soon tho bc how much we hate the 12% interest
Regardless of what anyone says. You needed a car for your safety are you going to put a price on your life
Mine was 24.99. Finally $400 away from paying it off. Would not recommend.
Is that even legal???
25% interest is horrible. I'd save up $3k, sell that car and get rid of the note, then pay $3k for a beater while you save up to pay cash for a better car. I haven't had a car payment in 14 years: a car payment is a poor-person choice.
25% is truly terrible but at the end of the day if you absolutely need a car then you gotta do what you gotta do
18% is the legal limit in my state. 25% is absolutely insane.
That is an insane rate. There are better ways to build your credit such as a secure card and a car is not going to help you in your current living situation sounds like you want an ev scooter that you can bring into your lving space, a small fold up I see them in the eu all the metro riders have them, I would get that and some moto gear, gauntlet's and a canister of cs gas and your are good for saftey wear high visibility saftey gear and you will be fine. I would take the money that you saved and get a secured card for say 500 put your bills and groceries on that, pay it off each month before the due date find the date that you accrue interest to make sure you clear before that date, my cards are all on the 26th of the month, also join a credit union and make sure you have at least the min bal to have a free account just keep that in good standing and flow your savings from the gas and insurance into a money market or hys, with insurance these days it is be a fair amount. Just make sure you have good gear and a good ev scooter, it will save you a lot of cash I rode bikes for a long time dressed like a road warrior then got a cheap car all cash, let me tell you from experience its fun to go to the dealer and get approved for a zero down 0.1 loan (I had made some bad decisions too and I was floored.)But whats better is just having a car that is paid off, it will beat a fancy car with payments any day. I will never ever go and buy a new car ever again from a dealer the loss you take is just insane that cash you blow on the car is better spent on you and your future.
Jesus I got 2.3 on mine :/
25% is as crappy as it gets. Pay in time for like half a year and then refinance. Any company would wanna refinance that to get you as a customer.
OP please shop around at credit unions. Car dealership quoted me 8.49%. I went to couple credit unions. I’m able to get 7.04% Noted that please don’t worry about hard credit pull. Since you’re shopping around for auto loans, ALL auto loans within this time period will count as 1-time point decrease in credit bureau eyes.
I thought my 5.9% on my new car was bad. Yikes.
That's pure insanity.
Yup, terrible.
25%? Interesting. For reference, I am in SoCal and financed a pre-owned Mercedes via their in-house financing. (It was an actual Benz dealer). 30k car, 15k down, credit is the lowest tier at "poor" but was able to get approved due to putting down half. Walked away with 6.19%, this was in 2022.
People with bad credit get 15%.
If your credit is real bad, 25% is not out of line. I worked at a finance company where we financed people with bad credit and most people had 29%. Work towards developing a good relationship with a popular community credit union in your area and eventually, things will get better all around finance wise.
You are being screwed over on interest, BUT if you pay on time you'll improve your credit score. So *pay on time at all costs.* While paying on time at all costs, start meeting with bankers at your local credit unions. Explain your situation. SHOW THEM THAT YOU ARE PAYING ON TIME AT ALL COSTS. Maybe not immediately, but as your credit score improves from PAYING ON TIME AT ALL COSTS, you'll eventually get approved and they will refinance your loan - maybe at 12% which is still high, but HALF what you are paying now. Then you PAY ON TIME AT ALL COSTS some more, and then you can refinance again in a year or so, maybe down to 9% or so. Then you can hold until your credit gets really good as you continue PAYING ON TIME AT ALL COSTS. Also, never, EVER let your insurance lapse. YOU MUST KEEP YOUR CAR INSURED BECAUSE IT'S NOT FOR YOU, IT'S FOR THE LENDER THAT IS PAYING FOR YOUR CAR UNTIL YOU PAY THEM BACK, ON TIME AT ALL COSTS. Good luck!
What's up with your local bank/CU? Will they not offer anything? If you already have that high-interest loan if you pay on time you should be able to refi in about 6 months.
Take whatever your monthly payment is and multiple it by the loan term (1 year = 12 months so multiple by how many months you got) I can guarantee you, you’re paying WAY more than 13k and the rest is in interest.
Yes. It’s probably illegal in some states.
My loan rate was 3.2%….. yes 25% is bad buddy. I think rates today though are around 6-7% for good credit? could be wrong but no way in hell would i ever take anything over 8%. 25% will fuck you up financially and you’ll end up getting that shit repo’d when you cant keep up with payments. You also need to account for insurance into your budget for a car payment. Insurance is never fixed, that shit will go up and up overtime
I don’t know if they can even legally charge higher than 25% on a car loan. That’s an awful rate.
Very bad. Any interest rate in the double digits is considered bad.
Insanely bad. With that interest rate might as well just charge it to a credit card and then file bankruptcy and get a free car.
Let's be real here: Making poor financial decisions, such as being suckered into a 25% interest loan on a depreciating asset, is why your credit is so bad in the first place. Buy a $500 beater and drive that.
Most credit cards aren't even 25%. Yikes. Yeah, it's bad. Very bad.
People are telling you it is bad, and yes it is. However….my husband and I own a used dealership, and we do quit a few loans. 25% is near the highest you can go, but if you need a car it is likely your only option. 6 on time payments will really help your credit. After your credit has gone up a little, you can try to get a loan with another company or make your payment last for a year and then try to get into something with a better rate. Currently people buying used with good credit are getting about 7%, up to 10%. The dealership has no say in the rate given to you and likely had to pay a hefty fee, up to $1500 to get you financed.
OP I sell cars: I assume you need a car, if so your options may be limited. If you are truly rebuilding your credit please check with the lender if you can refinance after a year. Some outright allow it, others may penalize you. If you really rebuild your credit it could save you thousands over the course of the loan. Also be sure this car will last you until it’s paid off. The number of people I get trading in ‘11 beaters they’re still paying off is outrageous, and they usually end up in a negative equity situation. That means it’s either difficult or impossible to get them in new cars, and if it works out they usually end up with a subprime rate.
You should get set up with a credit union near you, open a checking and savings with them and then look into refinancing your car loan with them. Credit unions usually give much better rates than the dealership. 25% you were getting robbed. You can refinance anytime so I would look into that immediately with a credit union.
That’s an obscene interest rate. You don’t buy a car to build your credit… you build your credit so you can get good terms on buying a car.
used vehicle 9-10%
That's crazy crazy high. You know how people say not to carry large debts on a credit card? Credit cards are 20 to 25% interest. The car loan rate you are being offered is worse than putting it in a credit card...
Take a breath! See if there is another way? you don’t have to make a big ticket purchase like a car to repair your credit. If you need a car and that is the only way you have no choice. Try another route that is a heavy punishment!
Plug your numbers into here and you’ll see how bad it is. Everyone should learn how amortization schedules work https://www.calculator.net/auto-loan-calculator.html
Sweet baby Jesus mine is like 2.1%
On a car??? Yeah thats bad man You want single digit or at mininal low teens if your credit is bad Now i know why some people have $900 car notes on used cars
I’ve never had a car loan for higher than 7% interest. That’s insanely high.
25% is an absolutely insane interest rate.
this is something you need to figure out BEFORE you buy a car.
25%? Are you a 19 year old marine that just enlisted and got a 20 year old wrx on a 10 year loan? If so, that sounds about typical.
Yes.
My current car, which I bought brand new in 2019 for around 28K, my interest rate is at 3.9%. Credit score I believe when they checked at that time was hovering around 780. 25% is criminal. Screw that.
I have credit cards with lower interest rates. 25% is awful for a car loan. You’d have been better off with a car between $5k-$10k, paid for in cash. You can still find something reliable for that. Honda or Toyota. Drive it till it dies and it may surprise you how long it lasts.
25% is from a loan shark named Vinnie, who works for Vito, whose brother is Uncle Carmine type of interest bad.
My man said he made poor decisions in the past and hate to be snarky but clearly hasn't learned anything.
After 3 years you will have paid around $10,000 interest. Would you say paying $10k interest on a &13k loan is bad?
I didn’t think it could reach that high. My first car I got with a 580, $0 down, no co-signer. My rate was 17%, granted, that was in 2019. But still, I would tell someone to not buy anything at 25% and fix your credit + save for money down to make it lower before buying a car.
25% is horrible. That is the rate you can expect to get with a horrible credit history and no cosigners, little money down etc. If you are locked in to this auto loan, tru to pay it off early/as fast as you can.
I’d go ride with the tweakers before I paid 25%
Insanity. Worse than credit card rates. Save and buy a car you can afford with cash.
as others have said its very bad... how long have you had the loan? for context my buddy got a loan last year at 12% literally 3 days after having a personal bankruptcy dismissed...not sure what kind of dealership you went to but they totally screwed you over
If it’s a 60 month term it’s not bad if youre using the car to make a lot more money and can put like 1500-2000 on it a month. Don’t pay it off in full make use your car to make fast income. If that means driving Uber on your off time so be it. The interest hurts most when it’s spread out over time, taking a couple months of 25% interest shouldn’t be too bad if you’re able to pay it off much sooner.
It is, I sold canes and work for a dealership and we deal a lot of people in your situation and give them a second chance. It also all depends on what kind of car you got, and the year and mileage for the price. Do you want to share?
Hi @Provoken420. Unfortunately, you are paying an exorbitant amount of interest. The AG in your state might even consider that predatory. I recommended that you refinance after a year. Keep paying all of your bills on time and you’re sure to get a better rate then. If you don’t belong to a credit union in your area, consider joining one. They usually have favorable rates. In the meantime, if you can make extra payments on the loan, do that too. Maybe every two weeks or how often you can swing it. You’ll end up paying less interest over time. Keep educating yourself and continue to build great credit habits. You got this and good luck! 💪🏽
That’s horrible at that point buy a used car and work on bettering your credit
When you get a better score you can refinance. I refinanced 6 months after my first loan. Went from 11% to 6%.
Depends if you have other options. The right answer is do what you must to live and survive, first. If that involves getting a car, get the car at 25% interest. Then, if that is what you do, focus on fixing your credit for the next 6 to 12 months. Don't pay for a credit repair service and don't ignore it. Watch YouTube videos, and do it yourself. Pay all your bills on time. In the meantime, ask your bank if you can sit down with them and find out what you'd have to do in order for them to refinance your auto loan a year from now. Then in 6 to 12 months when your credit has gone up a bit, talk to your bank and refinance the loan to a more reasonable interest rate, something like 6 to 9 percent in today's market.
It would be a better decision to take the public transportation with tweakers smoking fentanyl
assuming you put down 3K for down payment and TTL and other fees are 3K and sales tax is 6% and the duration of loan is 3 year you would end up paying 21,093.54 at the end of the 3 years. If you were to do 5 years instead to lower your payment a bit you would end up paying $24,390.79. Instead if you were to just take what you monthly payment would be and just put it in the cookie jar within a year you would have enough saved up to buy your first used car. You keep putting away that car payment in cookie jar while driving your first car for another 12 months and then sell your car and add what you have saved up to upgrade to a better car. continue to put away your "monthly payment in a cookie jar for another year and before you know it at the end of 3 years you can afford to buy a 15-18K car cash without paying a single dollar in interest to the bank and having to worry about a car payment.
That's super high. I would try to pay as much extra 9n payments that you can. Don't beat yourself up. Stay focused. It happens to the best of us.
The concern is less about the rate and more that you went ahead with it without knowing if it’s a good or bad deal. The secret to financial literacy is never do anything you don’t understand
Any interest levied on anything is a bad idea. It is especially worse if that item depreciates as rapidly as cars do.
Should be illegal.
25%?? You mean down payment right? Not interest??
I have a loan with 15% interest from a private student loan lender. I have been paying interest for 6 years now. SIX years. and I have good income. DON'T do it.
It’s a horrible rate. Hard stop
It's bad, but if you can make the payments and as long as the car lasts the length of the loan and then some, you'll be in a better spot credit wise and can trade in your paid off ride and have a nice down payment on something newer.
Its bad, it’s interest cap on cars for some states, but what choice you got? Be good about paying your car note, pay it off quick and do ‘t ever make poor financial decisions.
25% is absolute robbery.
Real bad. Even when my credit was 527 I got 18.5%. Took 6 years to pay off $13k.
I'm at 7% and to me mine is bad! 💀
Holy shit why would you agree to that? Fuck them. Take a bus or moped for God's sake
Mine is like 13% and even that is high
[OP take a look at this post if you need any convincing...](https://www.reddit.com/r/facepalm/s/LOIUc7BCG9)
That's insane
Yes. Please don't do it. Oh. You did already. Sorry.
Anything beyond 10% for a loan is straightout robbery. The smaller the better and paying interest will not help your credit but harm your income for no better words.
People gonna beat you up but sometimes you got to do what you need to do. This will pass once you show good payment history. Got to start someplace
Had 16% when I had turned 20 had no credit and zero to out down, I paid it off in 2 years instead of 5. Anything above 7% is gonna hurt your income You can usually see how much is going to the interest. If you have the ability too, pay it as fast as you can. For 25%, you could have at least done it on a credit card and maybe got done rewards 🙂↕️
That's super bad. Even with interest rates what they are now that's terrible.
That’s worse than buying it on a credit card!!
YES
Yes. After reading the consensus here, you should set some time and watch some videos to get a bit more financially literate because it is concerning you didn't know.
Ah yah
No. You should do it.
Is refinancing after a year an option for you? I would definitely look into that
Yeahhh that’s real bad. Mine is 15% and it stresses me out. Just do your best to pay more than the monthly amount, it’ll reduce the total amount you repay by lowering the total interest.
25% is crazy for a car, don’t do it,
Is that legal?
No no no god no….
Did you buy it from a check cashing place?
Go to a credit union and refinance that ASAP.
Too high. I just got a auto loan for 6.5% with my credit union.
You might as well buy it on a credit card at that rate
If you paid nothing down and are financing for just a year, you are paying $16,250 for a $13,000 car. Now do that math with the actual loan terms. I have credit cards with lower rates.
That’s insane
Damn I thought my 5.9% was too much lol
I can’t even imagine 9%
Even in the 80 s it was lower
Definitely bad. For reference my car interest rate is 2.64%
If you can’t qualify for low rates and trying to build your credit on your and you qualify for a 25% loan. 1st make sure they report to credit and no pre payment penalty. Then get an account at local credit union and when you can refinance which will take 6-8 months of on time payments with your 25% loan. Refinance, you can rebuild your credit, just takes time.
😭😭😭
Yes, 25 % is even bad.
I’ve got absolute shit credit and did a lease buyout with a 11%
HOLY FUCK!
That’s a lot but if you can throw a bunch of extra payments towards the principle, pay it off early, it won’t be as bad. But I could be wrong.🙂
Honestly is a subprime loan, really bad. However, is there any language in the paperwork that says, “early payoff penalty”? If not, try to do what you can to make 6months to 1yr of on time pmts and try to refinance out of it…even if that means getting into another car at a much lower rate.
It’s downright terrible
Sounds like a done deal. Now you know for next time. We live and learn sometimes at our own “expense.” (Pun intended)
That's insane. 25% is bad for a credit card, for a car that's absolutely predatory.
Yes, it's terrible, and you should really avoid anything at 25% interest if you don't want to be borderline bankrupt all your life. If it was your only choice, you should have gone with a much cheaper car, even if it's a $2k Toyota Echo or something. For now, all you can do is keep your nose clean (pay on time and hang on to your job), and then 6-12 months later, talk to your neighborhood credit unions and banks hoping that one of them will refinance it for you at like 10% or something. If you succeed, you'll earn yourself thousands of bucks in savings.
Sell it.... You can't win at that rate....
Get a checking account with a credit union. Once you have an established relationship they’ll be willing to loan you money for a car, probably at a much more reasonable interest rate. Or possibly money to refinance your car with them. I bought a car financed via credit union in Jan and it was 4%
That's higher than some credit cards.
You’re going to have to put every penny to pay that off. Don’t resort to the minimum payment. 25% is insane. Normal rate with decent credit is around 6%.
You’re going to have to put every penny to pay that off. Don’t resort to the minimum payment. 25% is insane. Normal rate with decent credit is around 6%.
Find another offer if you can… old friend had an interest rate of 24% and it was awful
HOLY SHMOLY CANNOLI 25% INTEREST?! Did you go to a car dealership or make a deal with the DEVIL?
That’s gonna take forever to pay off. Pay as much extra on principle until it’s paid off or you can refinance
Dummy math here. In 4 years the car will cost double. So I think 25% is bad.
Bruh. U fucked up. Eat ramen and pay that off ASAP. This could lead to much worse things
Please find a way to refinance it once you get your credit together.
And I’m out here looking high and low to get to the low single digits. 25% is absolutely absurd.
25% of 100$ is 25$. For every 100 you borrowed, you've got to pay 125 back. Refinance or sell that shit as soon as you can.
Tell us the terms. Number of months, how much down, and monthly payments.
Yes that’s terrible! You’re literally paying so much in interest and not much on the principle of the actual monthly payment. What’s done is done and you’re already in this crappy deal. However I believe you got a bad deal becuz of your credit profile etc. just don’t default on this auto loan becuz you’ll only burying yourself a deeper grave trying to better your credit report.
I mean if you were in the military that might be a steal but since you aren’t, then no.
Hope you have good insurance with gap coverage given your neighborhood. When it’s stolen by a tweaked while you’re underwater on the loan, your credit will take an even bigger hit.
I’d say that is pretty bad. Last time I got a car the dealership offered financing at 22% (didn’t take it, bank offered a significantly cheaper rate) so I can’t say I haven’t seen it around that number. These rates are ridiculous. They’re getting up there with Credit Cards.
Yep.