The $14.7 billion Dieselgate settlement has received final approval. However, many Volkswagen TDI owners still aren't happy.
In a lengthy article, popular automobile blog Jalopnik has listed and described the top complaints from angry VW customers. Among these complaints, one stood out as actually being a real perk for some Volkswagen buyers.
Dieselgate and Auto Loan Forgiveness
Under the header "Unfair Loan Forgiveness for People Behind On Payments," the Jalopnik article describes an interesting part of the VW settlement. It appears that TDI owners who are upside down and/or behind on payments will get relief.
If a Dieselgate-affected consumer owes a lender more than the buyback amount, Volkswagen will help. In this situation, VW will offer the lender 30% of the buyback plus restitution. So, in many cases, struggling TDI owners will get an opportunity to be free and clear of their loan obligations. Therefore, it seems likely that at least some settlement recipients won't be complaining about that part of the deal.
Advice for Those Who haven't been Affected by Dieselgate
Of course, out of the many car owners struggling with their loans, only a handful will potentially benefit from the Volkswagen diesel settlement. However, while loan forgiveness won't happen for everyone, there are options available for those who are in over their heads with a vehicle.
If you are behind with your payments, you should:
- Contact your lender immediately.
- Explain your situation in detail.
- Possibly negotiate a payment solution.
If you owe more money on your loan balance than what your car is worth (upside down), you should:
- Reorganize your household budget.
- Cut out unnecessary expenses.
- Pay at least a little more on your loan balance than the amount due every month. This will help you get "right side up" faster.
On the other hand, maybe you're planning to buy a car and want to avoid this problem. If this is the case, there is one very important piece of advice to follow: provide a large down payment.
How a Down Payment on a Car Pays Off Down the Road
These days, a lot of car buyers are choosing to extend the terms of their loans in order to reduce their monthly payments. However, this isn't usually the best thing to do, especially for bad credit buyers. Financing a vehicle for six or even seven years can mean having to pay a lot in interest charges and it increases the likelihood that you will be upside down in your loan even longer.
Since you'll have to hold onto your car longer, after a few years, you may have to start paying for car repairs. This could eat into your budget and make it more likely that you'll get behind on your payments.
By putting more cash down on your car, you can either lower your monthly payments or shorten the loan term. Depending on how much, you may even be able to do both. With equity in your car you'll reduce the risk that you'll run into trouble down the road.
It may take some effort and budgeting to save enough money for a good down payment, but it will be worth the work. This is certainly a better plan than sitting around, hoping that something like another Dieselgate will happen. By having a down payment and being prepared for the responsibility of your auto loan, both your wallet and your credit score will thank you.
The Perks of Expert Auto Loan Assistance
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