I purchased a used 2009 Camry back in 2012 after financing with Toyota Financial Services. The terms of the deal were 16k financed at 6% for 72 months. When I signed the paperwork however, I noticed that the amount financed changed to 18k something and the APR to 2.42%. When I asked the finance manager about it he said it added up to the same payment amount at the end, which it did. I didn't think too much about it because I confirmed that the amount paid at the end of the loan was the same. However, I failed to understand the long term implication this would have. V-e-r-y dumb mistake on my part. Yes, I was an idiot.

Now three years into the loan, I've moved to the North East, where I'm battling snowstorms and blizzards from hell. Due to the pains associated with driving to work in the snow, I'm trying to get an All Wheel Drive instead. Now seeing that the amount financed was more, the payoff amount on the car is of course more. Is there anything I can do with Toyota Financial (or anyone) about this? I'm way upside down on the loan right now; the car is worth 9k according to KBB and the payoff amount is 10,400.

My financial situation has improved a bit (from a FICO score of 593 in Aug 2012 to 701 right now) and I've gotten a few quotes for 0% APRs for new cars so I'm quite interested in pursuing those options if I can somehow settle this issue with my Camry's payments.

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    It may be worth considering picking up winter tyres for your car. It may be quite a bit cheaper than a replacement car. I have AWD and winters; the tyres make more difference for winters in Alberta, Canada, though AWD is certainly nice. Jun 23, 2014 at 18:40
  • I do have snow tires on my car but last winter I spent a lot of time skidding around :S
    – Craig
    Jun 28, 2014 at 15:07
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    AWD won't help you drive 65 miles an hour on six inches of snow. It'll just help you drive into the ditch faster. If you're from the south like I am, it's better to learn techniques for snow and ice driving, which aren't widely known in warmer climates. Aug 8, 2015 at 1:27
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    Driving in snow -- and knowing when not to drive in snow -- is a learned skill.Take it easy until you have learned. Re AWD: That's mostly useful for getting started in slippery conditions, and makes little difference in normal driving. Remember that all cars have all-wheel brakes. (Anti-skid braking, however, does help; you may already have it.)
    – keshlam
    Feb 11, 2016 at 15:07
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    Sorry to revisit this, but do you have snow tires or all season tires? Your description of skidding around really makes me think that you did not have proper winter tires. AWD will only help with acceleration, not handling or breaking, it sounds like you have a handling problem. Another solution that many of us use up north is to have a second "winter beater" car that we sacrifice to the salt and snow. How about picking up an older used Subaru or 4x4? If the need is real and you have the parking that would be the best bang for the buck.
    – Ukko
    Feb 11, 2016 at 19:44

5 Answers 5


There are a few things you should keep in mind when getting another vehicle:

  1. DON'T use dealership financing. Get an idea of the price range you're looking for, and go to your local bank or find a local credit union and get a pre-approval for a loan amount (that will also let you know what kind of interest rates you'll get). Your credit score is high enough that you shouldn't have any problems securing a decent APR.

  2. Check your financing institution's rules on financing beyond the vehicle's value. The CU that refinanced my car noted that between 100% and 120% of the vehicle's value means an additional 2% APR for the life of the loan. Value between 120% and 130% incurred an additional 3% APR.

Your goal here is to have the total amount of the loan less than or equal to the value of the car through the sale / trade-in of your current vehicle, and paying off whatever's left out of pocket (either as a down-payment, or simply paying off the existing loan).

If you can't manage that, then you're looking at immediately being upside-down on the new vehicle, with a potential APR penalty.

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    But if a dealership offers a lower APR than a CU wouldn't it make sense to go with the dealership? Or would there be a catch somewhere?
    – Craig
    Jun 22, 2014 at 22:49
  • Getting a pre-approval means you can shop around. If you want to see about dealership financing, the financing itself the same thing, but it's very doubtful a partner bank will be able to match the terms of a CU with whom you have a relationship. If they do have better terms, by all means, accept it. But don't go into a dealership without a pre-approval in hand.
    – Noah
    Jun 22, 2014 at 22:55
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    @Craig while the dealership may be offering a lower APR, they'll charge a higher price. They don't give you the money for free - being dependent on their financing reduces your leverage in negotiations. Usually, instead of low APR you can get price reduction, which is much better (IMHO...)
    – littleadv
    Jun 23, 2014 at 4:40
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    For reference on that, see: your current loan
    – Noah
    Jun 23, 2014 at 12:57
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    Never discuss dealer financing until AFTER you have agreed on the price of the car, or they'll just tack the difference back onto the car's price.
    – keshlam
    Dec 9, 2014 at 14:02

I am new to the site and hope I can help! We just purchased a used car a few weeks ago and used dealer's finance again so that's not the issue here. I want to focus on what you can do to resolve your issue and not focus on the mistakes that were made.

1 - DO NOT PURCHASE A NEW CAR! Toyota Camrys are great cars that will last forever. I live in Rochester, NY and all you need is snow tires for the winter as ChrisInEdmonton suggested. This will make a world of difference. Also, when you get a car wash get an under-spray treatment for salt and rust (warm climate cars don't usually come with this treatment).

2 - Focus on paying this loan off. Pay extra to the monthly note, put any bonuses you get to the note. Take lunches to work to save money so you can pay extra. I'm not sure if you put any money down but your monthly note should be around $300? I would try putting $400+ down each month until it is paid off. Anything you can do. But, do not buy a new car until this one is fully paid off!

Let me know if this helps! Thanks!

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    Lots of people in much snowier regions than the north-eastern US drive Camrys and similar non-awd cars. Dec 9, 2014 at 18:42
  • Best answer, certainly.
    – keshlam
    Feb 11, 2016 at 15:03

Dealerships make a lot of money in the finance department. One of the thing they play upon is your emotional reaction of purchasing a new vehicle (new to you in this case). They perform all sorts of shenanigans, like adding undercoat, selling gap insurance, or extended warranties. They entice you with a promise of a lower interest rate, but really what they are trying to do is back you into a payment.

So if you can fiance 20,000, but the car you are buying is 16,000, then they will try to move that figure up to the 20K mark. In your case it sounded like some borderline (at the least) illegal activity they used to fool you into paying more. It sounds like you regret this decision which puts you a step ahead of most. How many people brag about the extended warranty or gap insurance they got included in the sale?

As mentioned in another answer the best bet is to go into the dealership with financing in place. Say you were able to get a 3% loan on 16K. The total interest would be ~1600. If you avoid the finance room, you might avoid their dubious add ons that would probably cost you more then the 1600 even if you can get 0%.

If you are going to buy a car on time, my advice would be to not fill out a credit app at the dealership. The dealership people through a conniption fit, but hold your ground. If need be get up and walk out. They won't let you leave.

One thing I must mention, is that one feels very wealthy without that monthly pain in the a$$ payment for a car. You may want to try and envision yourself without a car payment, and make steps to making that a reality for the rest of your life.

  • Thanks Pete. In response to your last comment, ideally I'd be sticking to this car (I've got 3 yrs left on the payment and it's an awesome car when the streets don't resemble an Arctic field) but after my first experience of driving in the snow, even with winter tires, I think an AWD is the only way out.
    – Craig
    Jun 28, 2014 at 15:10

For the future:

NEVER buy a car based on the payment. When dealers start negotiating, they always try to have you focus on the monthly payment. This allows them to change the numbers for your trade, the price they are selling the car for, etc so that they maximize the amount of money they can get. To combat this you need to educate yourself on how much total money you are willing to spend for the vehicle, then, if you need financing, figure out what that actually works out to on a monthly basis.

NEVER take out a 6 year loan. Especially on a used car. If you can't afford a used car with at most a 3 year note (paying cash is much better) then you can't really afford that car. The longer the note term, the more money you are throwing away in interest. You could have simply bought a much cheaper car, drove it for a couple years, then paid CASH for a new(er) one with the money you saved.

Now, as to the amount you are "upside down" and that you are looking at new cars. $1400 isn't really that bad. (note: Yes you were taken to the cleaners.) Someone mentioned that banks will sometimes loan up to 20% above MSRP. This is true depending on your credit, but it's a very bad idea because you are purposely putting yourself in the exact same position (worse actually).

However, you shouldn't need to worry about that. It is trivial to negotiate such that you pay less than sticker for a new car while trading yours in, even with that deficit. Markup on vehicles is pretty insane. When I sold, it was usually around 20% for foreign and up to 30% for domestic: that leaves a lot of wiggle room.

When buying a used car, most dealers ask for at least $3k more than what they bought them for... Sometimes much more than that depending on blue book (loan) value or what they managed to talk the previous owner out of.

Either way, a purchase can swallow that $1400 without making it worse. Buy accordingly.


Before buying a new car, determine whether you really need one!

If there's an automotive discussion, you should ask there FIRST to get opinions on how much all-wheel-drive helps. You may not want to change cars at all.

Remember, most of us in the Northeast are NOT driving all-wheel-drive vehicles, and all cars have all-wheel brakes.

All-wheel drive is better at getting you moving from a stop if one of the drive wheels would otherwise be slipping. It makes less difference during actual driving.

Traction control braking is much more important -- and much more common, hence much cheaper. And probably already present in your Camry.

And good tires make a huge difference. (Top-of-the-line all-season tires are adequate, but many folks do switch to snow tires during the winter and switch back again in summer.) Tires -- even if you get a second set of rims to put them on -- are a heck of a lot cheaper than changing cars.

Beyond everything else, driving in winter conditions is a matter of careful practice. Most of the time, simply avoiding making sudden starts/stops/turns and not driving like you're in a video arcade ("gotta pass three more or I lose my game!") will do the job. You'll learn the feel of how the car responds. Some basic instruction in how to handle a skid will prepare you for the relatively rare times when that happens. (Some folks actively learn by practicing skids in a nice open parking lot if they can find one; I never have but it makes some sense.) If in doubt about the driving conditions, wait until the roads have been plowed and salted. Remember, teenagers learn to do this, and they're certifiably non compos mentis; if they can do it, you can do it.

Before buying a new car, determine whether you really need one!

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