Can't refinance my car! Please help!?

[a_elis2002]

I came from Europe last May 2007. I arrived in the US with no credit of course. I bought a car last August - a 2004 ford focus - that I financed at a rate of 26%... As of today, I paid $5,000 and I still owe 7,000....
The dealer told me that I could refinance my car after 6 months. Of course, now I am stuck as no one wants to refinance it and I need to lower my payments.
I was therefore thinking of trading in my car (trade-in value $5,400) and then I'll get a cheaper car.
I don't know what to do here. Please help me!

[dave007]

If you only owe $7000 and your vehicle is worth $5400 then you go to the dealer, purchase the vehicle you desire and add the $1600 negative equity to the purchase price and start a new loan. Say goodbye to the old and start off fresh.

[nick@night]

You got hosed Tommy. 26% interest and overpaying for what you bought at that. The dealer should be arrested for that. You need to find out what the actual payoff is on the loan and what the acv (actual cash value) is. Once you have that you will know how badly you are "upside down" (where you owe more that the car is worth). You may be able to trade it off but the amount you are upside down will be added to the next car you finance. Good luck and I recommend taking a friend with some car buying experience along next time so you won't get taken so badly. Good luck.