Dear Liz: In 2012, the financing of a 2008 Honda, my box. The car was priced at $ 16,500. With a swap, the loan was $ 22,000. GAP coverage in the loan payments that were $ 464 per month. Last year, the car sank and is a total loss by the insurance company considered. They paid the "book value" of $ 8,860 for the fund. However, $ 6,000 remained in the loan. GAP coverage paid $ 3,000 and the body says owe the remaining $ 3,000. They said that the CAP to pay a percentage of the balance, because the car was "covered" back in 2012. This seems to be unjust, and I feel like the creditor to CAP Silver Supplier obtained was (signed contract when the car funded). Is it possible that CAP provider refuses to cover the entire balance on the loan? I will meet the loan officer next week to discuss payment options.
Answer: You have discovered one of the many reasons why you do not want to roll the debt of a preceding vehicle on a car loan to buy a replacement.
many people just do but that. If it is used in a car for a new vehicle, almost 1 in 3 roll the old loan debt in the new, these comparisons show Edmunds.com auto website. The average amount of negative equity in January was $ 4,814.50. With used cars, 1: 4 with a commercial debt roll her old car replacement loan, with an average negative net worth of $ 3,595.30.
GAP (Guaranteed Auto Protection) coverage appears to be the solution, because it designed to the lender to pay the difference between the loan on the car and that the car is worth. Most CAP guidelines, but do not cover the debt that brought the previous vehicle. This leaves you exactly the position that you thought you avoid a car is to have, but to pay a lot of debt.
A better approach to car buying is to make a substantial down payment, for example, hold 20% of the purchase price and credit conditions over four years. You can not buy so many cars in this way, but not to the end, because more than the car is worth.
Credits family often unnoticed Gifts
Dear Liz: My cousin borrowed money from us, because he said they were on their house payments behind. It was only a small amount, but said he wanted to stay to talk with him and his wife. He voted us in the evening of the day to meet he received the registration process, but of course, called me and said he could not. We see them every week in church, and it does not work, as if nothing had happened, to avoid eye contact. It's been three months, and has not a single payment. I can not imagine how I would feel when I realized that my husband hiding something from me, and I do not know whether to push the problem or just see it as a personal and a lesson for the future loss. I Any suggestion?
Answer: The loans to family and friends are often unnoticed gifts, they were wise enough not to give up when he could afford to lose.
You already know everything you need about your cousin know that skills integrity and financial management lacking. It is possible that one or the other of these facts would be to his wife news, but chances are they already know. Therefore, it does not make much sense if Embarrass you have already decided not to proceed with the debt.
It allows recording early Social Security is logic?
Dear Liz: My wife will be November 62 and not working. I am 55 years old and have a 401 (k) for retirement. I know that they preach wait Social Security increase. But if my wife takes time and invest the money? Would it make sense to take early?
Answer: You have a total return achieved well above 7% guaranteed annual return wait get beat Social Security increase. At today's volatile markets, it would be a great achievement.
You can use the numbers to compete on a computer, Social Security will run. AARP offers a connection, or you can pay $ 40 a of the most sophisticated options such MaximizeMySocialSecurity.com to use.
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