Question about car Trade-In

[Duddy]

I have a Mazda3 which I'm paying $280 a month for 60 months. I have 2 more years left on payments. Paying to the bank.

I wanna know if I can trade it in at a local BMW dealership. They have 330i there for $17000.

I just don't know how this works. Would the BMW dealership give me the trade in value and then I use that to pay the note? Then take the remainder as a down payment towards the BMW?

 

[DrPizza]

You don't have as much to do as you think you do... you will negotiate a trade-in value for your vehicle. If the trade in value is more than you owe, the difference will be applied to whatever price you negotiate for the new vehicle. If you owe more than the trade is worth, they can add that into the loan - you'll be borrowing for the amount that you purchase the new vehicle for PLUS the difference between what they'll give you for the trade and what you owe.

You didn't say what year your Mazda3 is, or its condition. Just that you owe about 6720. Prior to going to the dealer, you should call whoever you currently make loan payments to and inquire what the payoff amount is. (The amount you owe.) Keep this in mind when you're discussing a trade-in value for your current vehicle.

However, you won't be the one paying the remaining balance to the bank on your current car. The finance department/bank they work with will pay that balance off (assuming there is a lien on your title.)

edit: Since this appears to be the first time you're trading in a car, you should do plenty of research before heading to a dealer. Does the BMW dealership own a used car lot across the street? If not, realize that they're going to be sending your car to auction. Thus, the amount of money they receive for that car is most likely going to be considerably lower than what a consumer is going to pay for that vehicle.

If they have negotiation room on the price of the vehicle youre interested in, they may offer you a higher value for your trade, intending to make up for it on the price of the vehicle you purchase from them. (Unless that dealer is one of those rare exceptions that the price on the windshield is the exact same price that they'll sell it for to every customer.) If there's very little negotiation room on the price of the vehicle you're interested in, you're going to get a lower trade in value than you may expect.

 

[thomsbrain]

You can't sell the car because the bank still has a lien on it. So what usually happens is the dealership pays off the remainder of your loan for you and takes your car. The balance of your old loan gets rolled into the new one, minus the trade-in value of your car.

So your final loan is:

BMW purchase price
+
Taxes, fees, title
+
Balance of loan on Mazda 3
-
Trade-in value of Mazda 3
-
Any additional cash down-payment you make


Be careful though, look at total cost, not just monthly payments. Yeah, your monthly payment will probably only go up a little bit if you trade for the BMW. But now you are looking at another 5 years of paying that higher payment instead of only two at the lower payment. Is it really ok with you to keep rolling car loans into each other and have ever-increasing payments for the rest of your life? I've seen people get themselves into trouble really fast doing that. The CL turns into the Sequoia turns into the Tacoma turns into the Silverado turns into the Corolla... and suddenly you're paying $1000/month for 60 months for a measly Corolla. That's when it hits you that you're now paying for $50,000 worth of depreciation on cars you don't even own anymore. Oops. So just be cautious, mmmkay?

 

[DrPizza]

thomsbrain - I thought there was a limit on the value that can be financed with a new vehicle. In other words, I didn't think it would be possible to take out a 50k loan that's secured only with a corolla.

Duddy, that's why I suggested knowing the payoff value of your vehicle before you negotiate the trade-in value. But keep in mind - the dealership is in business to make money, not lose money. If they're going to auction your vehicle, they know how much they'll get for it, and that amount will be less than what you may think it's worth.

 

[Duddy]

My trade in value is about $10,000

I have about $7,000 left to pay off on the loan

The BMW is $17,000

So I would start a new note for $14,000?

Hmm, if that's the case maybe I should wait until the Mazda3 is paid off.

 

[DrPizza]

Originally posted by: Duddy
My trade in value is about $10,000

I have about $7,000 left to pay off on the loan

The BMW is $17,000

So I would start a new note for $14,000?

Hmm, if that's the case maybe I should wait until the Mazda3 is paid off.

And, once the Mazda3 is paid off, ask yourself if you want another car loan, or if you'd rather drive it for a couple years while tucking away money into a savings account or something. (Depending on how reliable the Mazda3 is)

 

[Vette73]

Originally posted by: DrPizza

Originally posted by: Duddy
My trade in value is about $10,000

I have about $7,000 left to pay off on the loan

The BMW is $17,000

So I would start a new note for $14,000?

Hmm, if that's the case maybe I should wait until the Mazda3 is paid off.

And, once the Mazda3 is paid off, ask yourself if you want another car loan, or if you'd rather drive it for a couple years while tucking away money into a savings account or something. (Depending on how reliable the Mazda3 is)

Agreed. I don;t see how people can live with a car payment, let alone one for 4+ years.

Me and my wife have paid cash for both our Corvette and CTS. A house has a write off and can increase in value, but a car can't be written off and drops in value.

 

[Jack Ryan]

Originally posted by: Marlin1975

Originally posted by: DrPizza

Originally posted by: Duddy
My trade in value is about $10,000

I have about $7,000 left to pay off on the loan

The BMW is $17,000

So I would start a new note for $14,000?

Hmm, if that's the case maybe I should wait until the Mazda3 is paid off.

And, once the Mazda3 is paid off, ask yourself if you want another car loan, or if you'd rather drive it for a couple years while tucking away money into a savings account or something. (Depending on how reliable the Mazda3 is)

Agreed. I don;t see how people can live with a car payment, let alone one for 4+ years.

Me and my wife have paid cash for both our Corvette and CTS. A house has a write off and can increase in value, but a car can't be written off and drops in value.

Smug much?

 

[Vette73]

Originally posted by: Jack Ryan

Originally posted by: Marlin1975

Originally posted by: DrPizza

Originally posted by: Duddy
My trade in value is about $10,000

I have about $7,000 left to pay off on the loan

The BMW is $17,000

So I would start a new note for $14,000?

Hmm, if that's the case maybe I should wait until the Mazda3 is paid off.

And, once the Mazda3 is paid off, ask yourself if you want another car loan, or if you'd rather drive it for a couple years while tucking away money into a savings account or something. (Depending on how reliable the Mazda3 is)

Agreed. I don;t see how people can live with a car payment, let alone one for 4+ years.

Me and my wife have paid cash for both our Corvette and CTS. A house has a write off and can increase in value, but a car can't be written off and drops in value.

Smug much?

How so. Got both used below what they were going for and were able to get cars we wanted and pay for them outright. Just got the CTS, 04, about a mont ago for $15k plus another 1k for taxs and plates. Only has 24k on it when we got it. Corvette we got several years ago but we got it for 4-5k below what ir should have sold for. Me and my wife are not rich but we make our dollar go far be getting the best bang for the buck. Our house was a forclosure and we stripped a lot of it down to studs to get it the way we want and did that without taking a building/Cont. loan.

Going to the auction this week to see about finding a A4 for my sister-in law.

 

[StrangeRanger]

A BMW dealer is going to wholesale your car. That means their used car mgr will look it over, call one of his wholesale buddies and get a cash price for it over the phone. They will offer you that amount of $$ for the Mazda. I was in the car business for years, trust me, the BMW dealer wants nothing to do w/ your car.
If you're the average buyer I'm betting you got your trade-in # from Kelly/Edmunds/NADA or such. You will never see anything near that amount if you trade. I'll bet you'll be lucky to see $5-$6K trade offer from the BMW dealer.
About the only thing you have going for you is that you're looking at a used car. The dealer will have more room to wiggle when you're talking a used car purchase.
My advice, sit on the Mazda. Payments are less, service costs are less, probably gets better mileage and you'll own it before you know it.
Oh, and btw, DrPizza, auto financing banks be it your local bank or BMW Financial Services will NORMALLY allow you to finance up to 110% of a car's value. So he could in theory finance up to $18,700 assuming a $17K selling price and good credit.
j

 

[alkemyst]

Originally posted by: Marlin1975

Me and my wife have paid cash for both our Corvette and CTS. A house has a write off and can increase in value, but a car can't be written off and drops in value.

You are highly ignorant if you think many can go and pay cash for a corvette and CTS (assuming you didn't pick up fire sale/beaters) and solve the issue with having to finance them...even then most don't have even $5-10k to drop lump sum on a car.

Also to many the car payment is just an accepted cost. It doesn't cause them grief or struggle.

 

[Vette73]

Originally posted by: alkemyst

Originally posted by: Marlin1975

Me and my wife have paid cash for both our Corvette and CTS. A house has a write off and can increase in value, but a car can't be written off and drops in value.

You are highly ignorant if you think many can go and pay cash for a corvette and CTS (assuming you didn't pick up fire sale/beaters) and solve the issue with having to finance them...even then most don't have even $5-10k to drop lump sum on a car.

Also to many the car payment is just an accepted cost. It doesn't cause them grief or struggle.

We bought cars we could afford, i.e. we paid cash. Everybody wants to keep up with the jones, which is one of the reason people are in so much debt and also the whole housing crash going on. Kinda liek the OP wants to go into more debt for a BMW when he has a decently new car. Of course it does not have the same name/badge. :roll:

You want to go into debt for something that will lose value go ahead. I rather have a good savings and not be straped for cash if I needed soemthing or worse if something happened.

 

[kt]

Originally posted by: Marlin1975

Originally posted by: Jack Ryan

Originally posted by: Marlin1975

Originally posted by: DrPizza

Originally posted by: Duddy
My trade in value is about $10,000

I have about $7,000 left to pay off on the loan

The BMW is $17,000

So I would start a new note for $14,000?

Hmm, if that's the case maybe I should wait until the Mazda3 is paid off.

And, once the Mazda3 is paid off, ask yourself if you want another car loan, or if you'd rather drive it for a couple years while tucking away money into a savings account or something. (Depending on how reliable the Mazda3 is)

Agreed. I don;t see how people can live with a car payment, let alone one for 4+ years.

Me and my wife have paid cash for both our Corvette and CTS. A house has a write off and can increase in value, but a car can't be written off and drops in value.

Smug much?

How so. Got both used below what they were going for and were able to get cars we wanted and pay for them outright. Just got the CTS, 04, about a mont ago for $15k plus another 1k for taxs and plates. Only has 24k on it when we got it. Corvette we got several years ago but we got it for 4-5k below what ir should have sold for. Me and my wife are not rich but we make our dollar go far be getting the best bang for the buck. Our house was a forclosure and we stripped a lot of it down to studs to get it the way we want and did that without taking a building/Cont. loan.

Going to the auction this week to see about finding a A4 for my sister-in law.

You could've said, "My wife and I paid cash for both of our cars." Listing what you bought just make you seem...smug.

 

[alkemyst]

Originally posted by: Marlin1975

We bought cars we could afford, i.e. we paid cash. Everybody wants to keep up with the jones, which is one of the reason people are in so much debt and also the whole housing crash going on. Kinda liek the OP wants to go into more debt for a BMW when he has a decently new car. Of course it does not have the same name/badge. :roll:

You want to go into debt for something that will lose value go ahead. I rather have a good savings and not be straped for cash if I needed soemthing or worse if something happened.

I have bought cars cash up to around $15k and as well have financed them.

Sometimes people need a car today and can afford the $200-300 a month that would have been saved anyway. At under 10% interest for a used car it's not like you are throwing a ton of money away if you finance properly.

Buying a $1-2k car will often be even more foolish with the expenses of keeping it running.

 

[TruePaige]

Originally posted by: alkemyst

Originally posted by: Marlin1975

We bought cars we could afford, i.e. we paid cash. Everybody wants to keep up with the jones, which is one of the reason people are in so much debt and also the whole housing crash going on. Kinda liek the OP wants to go into more debt for a BMW when he has a decently new car. Of course it does not have the same name/badge. :roll:

You want to go into debt for something that will lose value go ahead. I rather have a good savings and not be straped for cash if I needed soemthing or worse if something happened.

I have bought cars cash up to around $15k and as well have financed them.

Sometimes people need a car today and can afford the $200-300 a month that would have been saved anyway. At under 10% interest for a used car it's not like you are throwing a ton of money away if you finance properly.

Buying a $1-2k car will often be even more foolish with the expenses of keeping it running.

I got my new Saturn for about 216-217 a month.

It had 0% financing, with 0% you'd be crazy not to finance. =p

 

[eldorado99]

Originally posted by: kt

Originally posted by: Marlin1975

Originally posted by: Jack Ryan

Originally posted by: Marlin1975

Originally posted by: DrPizza

Originally posted by: Duddy
My trade in value is about $10,000

I have about $7,000 left to pay off on the loan

The BMW is $17,000

So I would start a new note for $14,000?

Hmm, if that's the case maybe I should wait until the Mazda3 is paid off.

And, once the Mazda3 is paid off, ask yourself if you want another car loan, or if you'd rather drive it for a couple years while tucking away money into a savings account or something. (Depending on how reliable the Mazda3 is)

Agreed. I don;t see how people can live with a car payment, let alone one for 4+ years.

Me and my wife have paid cash for both our Corvette and CTS. A house has a write off and can increase in value, but a car can't be written off and drops in value.

Smug much?

How so. Got both used below what they were going for and were able to get cars we wanted and pay for them outright. Just got the CTS, 04, about a mont ago for $15k plus another 1k for taxs and plates. Only has 24k on it when we got it. Corvette we got several years ago but we got it for 4-5k below what ir should have sold for. Me and my wife are not rich but we make our dollar go far be getting the best bang for the buck. Our house was a forclosure and we stripped a lot of it down to studs to get it the way we want and did that without taking a building/Cont. loan.

Going to the auction this week to see about finding a A4 for my sister-in law.

You could've said, "My wife and I paid cash for both of our cars." Listing what you bought just make you seem...smug.

Agreed. Although having pride isn't always bad either, says the guy with his car in his sig.

 

[Vette73]

Originally posted by: eldorado99

Originally posted by: kt

Originally posted by: Marlin1975

Originally posted by: Jack Ryan

Originally posted by: Marlin1975

Originally posted by: DrPizza

Originally posted by: Duddy
My trade in value is about $10,000

I have about $7,000 left to pay off on the loan

The BMW is $17,000

So I would start a new note for $14,000?

Hmm, if that's the case maybe I should wait until the Mazda3 is paid off.

And, once the Mazda3 is paid off, ask yourself if you want another car loan, or if you'd rather drive it for a couple years while tucking away money into a savings account or something. (Depending on how reliable the Mazda3 is)

Agreed. I don;t see how people can live with a car payment, let alone one for 4+ years.

Me and my wife have paid cash for both our Corvette and CTS. A house has a write off and can increase in value, but a car can't be written off and drops in value.

Smug much?

How so. Got both used below what they were going for and were able to get cars we wanted and pay for them outright. Just got the CTS, 04, about a mont ago for $15k plus another 1k for taxs and plates. Only has 24k on it when we got it. Corvette we got several years ago but we got it for 4-5k below what ir should have sold for. Me and my wife are not rich but we make our dollar go far be getting the best bang for the buck. Our house was a forclosure and we stripped a lot of it down to studs to get it the way we want and did that without taking a building/Cont. loan.

Going to the auction this week to see about finding a A4 for my sister-in law.

You could've said, "My wife and I paid cash for both of our cars." Listing what you bought just make you seem...smug.

Agreed.

No if you read here at all then someone would have written in "I am not going to drive a 82 Chevy Cav all my life I want a real car..." and another angle but same result would have happened.

 

[alkemyst]

Originally posted by: TruePaige

Originally posted by: alkemyst

Originally posted by: Marlin1975

We bought cars we could afford, i.e. we paid cash. Everybody wants to keep up with the jones, which is one of the reason people are in so much debt and also the whole housing crash going on. Kinda liek the OP wants to go into more debt for a BMW when he has a decently new car. Of course it does not have the same name/badge. :roll:

You want to go into debt for something that will lose value go ahead. I rather have a good savings and not be straped for cash if I needed soemthing or worse if something happened.

I have bought cars cash up to around $15k and as well have financed them.

Sometimes people need a car today and can afford the $200-300 a month that would have been saved anyway. At under 10% interest for a used car it's not like you are throwing a ton of money away if you finance properly.

Buying a $1-2k car will often be even more foolish with the expenses of keeping it running.

I got my new Saturn for about 216-217 a month.

It had 0% financing, with 0% you'd be crazy not to finance. =p

But you couldn't post on the internet how smart you are financially by paying cash for a corvette and a CTX...

The irony of his post is if he was truly being financially smart, neither of those vehicles would have been the right choice.

It makes a good story though.

 

[xgsound]

Originally posted by: Duddy
My trade in value is about $10,000

I have about $7,000 left to pay off on the loan

The BMW is $17,000

So I would start a new note for $14,000?

Hmm, if that's the case maybe I should wait until the Mazda3 is paid off.

If you don't like those numbers, you won't like what the BMW dealer really offers. They will massage the numbers in many directions, but my bet is that they'll want a $18,000 note (tax, prep, documents) and your car to drive it home at best.

I've always enjoyed the months/ years following the payoff of a car loan so much that I try my best to pay cash. My cars aren't as nice as Marlin 1975's, but our payments are the same.

It feels good to drive a fine car, but any car feels better when it's paid for. I'm betting that Corvette feels reeaal good ... and so will your Mazda3.


Jim

 

[DrPizza]

Originally posted by: StrangeRanger
A BMW dealer is going to wholesale your car. That means their used car mgr will look it over, call one of his wholesale buddies and get a cash price for it over the phone. They will offer you that amount of $$ for the Mazda. I was in the car business for years, trust me, the BMW dealer wants nothing to do w/ your car.
If you're the average buyer I'm betting you got your trade-in # from Kelly/Edmunds/NADA or such. You will never see anything near that amount if you trade. I'll bet you'll be lucky to see $5-$6K trade offer from the BMW dealer.
About the only thing you have going for you is that you're looking at a used car. The dealer will have more room to wiggle when you're talking a used car purchase.
My advice, sit on the Mazda. Payments are less, service costs are less, probably gets better mileage and you'll own it before you know it.
Oh, and btw, DrPizza, auto financing banks be it your local bank or BMW Financial Services will NORMALLY allow you to finance up to 110% of a car's value. So he could in theory finance up to $18,700 assuming a $17K selling price and good credit.
j

Thanks. I didn't know how high exactly they went; but I knew they'd go a little above the actual value. And, certainly not as high as a 50k loan on a 20k Corolla