So, my cousin liked my rx-8 so much, that he decided to buy one himself. He bought a used 2004, with about 30K on the car. So my question is, to help him out a little is two fold. He has really bad credit, so is it possible for him to refinance some 6-10 months down the line if he makes payments on time?? If so, can he go through his current lender (Capital One Auto) or should he go somewhere else? Has anyone done this before and what is the costs to do a refi...

He also did not get extended warrenty on the car but now, he is interested in purchasing one. Is there a good company that is reputable that one can get an extended warrenty on the car that will cover the same things as the original manufacturers warrenty?

Thanks for the help guys!!

 

My advice to him is to keep making the payments for now and in 12 months i would shop around to refinance, but don't expect anything drastic, it usually takes years to clear up credit, not months.

 

cool. thanx for the reply. I guess any lower interest rate will help him out lol..

 

If anything, his credit score may go down. Part of the calculation is debt/loan ratio. With the car loan this will increase his debt.

The easiest way to improve your FICO score is to pay down your credit cards, always make payments above your minimum, and do not be late. Also, do not cancel credit cards that are paid off. A zero balance with a high credit limit improves the debt/loan ratio. Your FICO score is recalculated every month. If you have a Providian credit card, they provide you with your score every month as part of their service. He might want to apply for one, just to get this service for free. Once his score is > 700, he should get a good rate.

 

Homer Simpson once said: "Extended warranty? How can I lose!"

An extended warranty is a hedge that something that the warranty will cover will break during the time that you have the warranty, and under the conditions in which the warranty will cover this "something". It's basically very, very limited insurance. I'd recommend it for anything British or Italian, but the way that MB and BMW are going, sure, anything German would get lumped in.

The extended warranties are generally not all that cheap - just invest the cash, or save it, or put it against some of that debt, and if a repair comes up after the warranty is up, well, pay it up then. If it happens...

 

I was foolish enough to get one of these on a previous car from Warranty Gold, whose underwriter went under water. WG no longer honors warranties issued under that underwriter, but is still issuing new contracts with a new underwriter. There was no money for the insured parties in the bankruptcy settlement. Luckily, I bought mine during a promotional period, and between the discount and monthly gas rebates (all of which I received), I was out about $160.

I agree with advice of others: put the money you would have spent aside, unless buying European.

 

Thanks guys, appreciate the replies