I think I am being ripped off by my auto financing company?

Question

My 2000 Chevy Impala is financed through Consumer Portfolio Services. I have recently read so many negative feedback about this company that I didn't even have time to read everything the consumers wrote. I got the Impala on November 27, 2008. I put two thousand dollars down. The worth of the car was 13,000.00 before the down payment. Since then I have been making payments of 300.00 a month. I just recently checked to see what the balance of my car was and I was appalled that it said my balance was 9,000.00! I have paid 6,600.00 and my balance only moved by two thousand dollars?! I want to mention that yes I do have a high interest rate on this vehicle but there should be no reason that I have paid 6,600.00 so far in monthly payments plus an additional 2,000.00 for a down payment and the balance still sit at 9,000.00 what should I do?

Answer 1

Beyond doubt, you have a terrible finance rate and I think you paid too much for the car.  My guess would be about 9500 was all it was worth when you bought it 22 months ago.

What can you do about it?  I would check with legal aid and see if the contract is legit.  

Answer 2

You shouldn't take a loan (for future reference), Car, House, Credit card, unless you understand how interest works.

First, your payments are $300. You have made payments for 10 month, that is $3000. How do you get $6600?

Here is how it works. You borrowed $11000 ($13000-$2000)

Lets say your interest is 12% for simplicity. That means you are paying 1% per month (12% divided by 12 months) or $110 interest the first month (1% of 11000). Your payment is $300, so $300-$110 is $190 paid on your loan's principle. Your loan would now be $11000-$190=$10810.

Month 2 interest would be 108.10, So you payment to the loan is 191.9 leaving your balance at 10618.10

Month Balance___ Interest__ Payed (on Principle)

Nov__ $11000.00__$110.00_ $190.00

Dec__$10810.00__$108.10__$191.90

Jan__$10618.10__$106.18__$193.82

Feb__$10424.28__$104.24__$195.76

Mar__$10228.52__$102.29__$197.71

Apr__$10030.81__$100.31__$199.69

May__$9831.12___$98.31__$201.69

Jun___$9629.43___$96.29__$203.71

Jul___$9425.72___$94.26__$205.74

Aug__$9219.98___$92.20__$207.80

Sep___$9012.18

So basically,

1) you take your interest rate and divide it by 12.

2) Divide it by 100

3) Multiply your balance times that number (that is the interest payment for that month (the amount you pay them for lending you the money)).

4) Subtract that from your monthly payment (that is what is paid on your loan).



5) Take that amount and subtract from your principle. (This is you balance for the next month.

6) For the next month, go back to step 3 and repeat.

Additional information...

Use your numbers and you can see you are probably ok, but you have a high interest rate. The interest rate is what you are telling the lender you are willing to pay to borrow money. If you take the loan, you are not being ripped off. You need to know what you are buying. There are jerks that will take advantage of you, so you need to be educated.

In the link below, you can calculate you loan.

Answer 3

The car dealer and loan co. both prob. ripped you  by adding  hidden charges.. Get a copy of all the final documents.Both sale and finance.--look them over carefully to see whats up.--but the only option you may have is to refinance..I'm sorry this happened to you..Now you know these type co`,s are in general regarded dishonest...You need to get all the numbers together.  Then come back if you want some real advice.