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YACT

pontifex

pontifex

Lifer
I have a car that i have about 3-4 years to pay on yet but thinking of getting something different. can't afford to pay for 2 cars. can you still trade in your current car? how does that work?
 
you can trade it in, the dealer will give you trade in that goes towards whatever is left in payments on the car, then roll the rest of the payoff into your new loan
 
Originally posted by: Drakkon
you can trade it in, the dealer will give you trade in that goes towards whatever is left in payments on the car, then roll the rest of the payoff into your new loan
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i'm not sure i quite understand what you mean.
 
Originally posted by: pontifex
Originally posted by: Drakkon
Originally posted by: pontifex
Originally posted by: mugs
Yes you can. Are you upside down on the loan?
Click to expand...

what does that mean?
Click to expand...
the payoff is more than the car is worth
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and how do i figure that out?
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1. How much do you owe on the car?
2. How much is the car worth?

Subtract 1 from 2 and if the result is negative, you're upside-down. If the result is positive, you're not. If you owe more than it's worth (or more accurately, more than the dealer is willing to give you on the trade-in), you'll have to roll the difference into your new loan. This is a Very Bad Thing?. That's how you end up paying $600 a month for 72 months on a Honda Civic.

You'll get more for your car if you sell it privately, but if you're upside-down you'd have to be able to make up the difference yourself.

Basically what you're considering is potentially a horrible financial decision. 🙂
 
Originally posted by: pontifex
Originally posted by: Drakkon
you can trade it in, the dealer will give you trade in that goes towards whatever is left in payments on the car, then roll the rest of the payoff into your new loan
Click to expand...

i'm not sure i quite understand what you mean.
Click to expand...
say you owe 15K on the car, the KBB dealer price for your current car is 13K, and the new car is 15K

The dealer will take your old care for 13K and the remaining 2K you were supposed to pay off your current car will be added to the new loan making the total for new car 17K

and in this situation you are "upside down" on the loan since you need to payoff 15K but the car is only worth 13K (or possibly more depending on lenders appraisal). check with your lender to find out what your current payoff is. My bank actually puts it online though too.
 
Originally posted by: mugs
Subtract 1 from 2 and if the result is negative, you're upside-down. If the result is positive, you're not. If you owe more than it's worth (or more accurately, more than the dealer is willing to give you on the trade-in), you'll have to roll the difference into your new loan. This is a Very Bad Thing?. That's how you end up paying $600 a month for 72 months on a Honda Civic.

Basically what you're considering is potentially a horrible financial decision. 🙂
Click to expand...

I've seen a $40,000 2005 Chevy Malibu for this very reason. Why that person traded a 2003 Cadillac in on it I'll never know.
 
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