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If I owe on my car loan still, can I trade it in for something cheaper?

Talk about personal loans and managing them to lower your debt

If I owe on my car loan still, can I trade it in for something cheaper?

Postby tsidhqiyah » Sat Apr 09, 2011 5:50 am

So I owe around $14,200 on my car loan. Is it possible to trade it in for a car that is $13,795 or will I be upside down with negative equity?
tsidhqiyah
 
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If I owe on my car loan still, can I trade it in for something cheaper?

Postby langley » Sat Apr 09, 2011 5:51 am

uh..what you owe has nothing to do with trade in.

If the car is worth 9 grand, you'll be 5 k under water and 14 k on the car,

Not happening unless the car is worth more than 14k on trade.
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If I owe on my car loan still, can I trade it in for something cheaper?

Postby cinnard » Sat Apr 09, 2011 5:52 am

you left out the value the dealer assigns on the car you trade in. put that in and refigure. guess that they won't allow you to be upside down after the deal is done and that you'll have to come up with cash to prevent that plus to make the down payment on the newer vehicle.
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If I owe on my car loan still, can I trade it in for something cheaper?

Postby maralyn » Sat Apr 09, 2011 6:10 am

Anything is possible, anything is negotiable.

Find a car dealership that's desperate enough, they'll offer to take your car and take over payments, then use that as a down payment towards a new car, and you might even come out ahead.

I suggest finding a kind of car you want that's in your price range and start shopping. Do it now, the longer you wait, the less your existing car will be worth, the less they'll be willing to offer.
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If I owe on my car loan still, can I trade it in for something cheaper?

Postby manfred30 » Sat Apr 09, 2011 6:18 am

You say you owe 14,200 on your car but you don't say what it is worth. Look up the trade in value of your car and you should get an idea of where you stand. Most dealerships try to pay as little as possible so expect them to offer the low end of trade in value.
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If I owe on my car loan still, can I trade it in for something cheaper?

Postby carmichael » Sat Apr 09, 2011 6:25 am

Wizjp is right. You have not given enough info on what you are trying to do. Are you trying to lower your payments? Buy a car that gets better gas mileage? Usually if you drive the normal mileage per month, you will get at best a trade in maybe 1,000 less then you owe.

So if you owe 14,200, I would guess at best your trade in would be 12,500. But wait, this does not include taxes, registering the new car, and all the new documentation fees. Buying a new or newer used car, will cost around $300-$500 buying a new car you have to pay taxes. At an average 8% is $80 per $1,000. What this means is to break even for monthly payments would be the same, you are at a loss of $2,000+ taxes. around $900. So to break even you would need to find a car around $11,000. If you are trying to lower your payments, get better gas mileage, you will have to buy a car for less $11,000. As I said what are you trying to do? The basic rule of thumb is if you buy a car unless you work for a company that gives a car allowance, or you are wealthy you should keep the car for at least 5yrs. Otherwise you are wasting money. If you have the money to waste go ahead. Must of us do not. The only reason to exchange the car is to lower the payments because you can not afford the car you have. Like say you bought a $30,000 car, when you were making $60,000 a year. Then lost the job, and now making $30,000. If you could turn the car in, for lets say a $15,000. car. Where you can lower your payment to almost half. That would be smart.
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