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3886 messages,  Last post on Sep 03, 2010 at 11:38 AM

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#3877 of 3886 trade in a car that has more owd than its worth by scammarn

Mar 27, 2009 (6:14 am)

I have a vehicle that i owe five thousand more than its worth, due to last chance financing. Can i trade it in without starting upside down on a new loan, or am i stuck with paying this loan off?

#3878 of 3886 Re: trade in a car that has more owd than its worth [scammarn] by Mr_Shiftright HOST

Mar 27, 2009 (8:09 am)

Replying to: scammarn (Mar 27, 2009 6:14 am)
Well SOMEBODY has to pay the difference....you can trade it and the dealer will pay it off but he'll just blend the deficit into your new loan, making you more upside down.
 
Keep in mind that your trade in value will not be the same as "what it's worth" on the retail market, so you may end up being not $5K down, but $7-8K down on a trade in. That's pretty brutal.
 
I think you're stuck paying it off or paying it further down until you get at least reasonably even on it.
 
I guess if your credit is better now than it was when you first financed you might give a try re-financing your car loan. Long shot but possible.
 
My advice is to get some HARD DATA before you make any decisions. That means:
 
1. research the "book price" (trade in and private party retail) of your car at Edmunds True Market Value
 
http://www.edmunds.com/tmv/used/index.html
 
2. go to www.autotrader.com, and using "advanced search" find examples of your exact car, nationwide, and then when you get the long list of comparables, look at the bottom of the page for "average price". This will tell you how close TMV is to nationwide asking prices
 
3. Calculate your current pay-off balance.
 
With these numbers, you will at least know "the score" and what you're up against.
 
3.

#3879 of 3886 Re: trade in a car that has more owd than its worth [scammarn] by mikefm58

Mar 27, 2009 (8:23 am)

Replying to: scammarn (Mar 27, 2009 6:14 am)
Can i trade it in without starting upside down on a new loan, or am i stuck with paying this loan off?
 
Maybe you can get one of those nice bailout packages from Obama.

#3880 of 3886 Re: trade in a car that has more owd than its worth [mikefm58] by Mr_Shiftright HOST

Mar 27, 2009 (8:31 am)

Replying to: mikefm58 (Mar 27, 2009 8:23 am)
yes but only if you are presently living in your car.

#3881 of 3886 Re: trade in a car that has more owd than its worth [scammarn] by wlbrown9

Mar 27, 2009 (9:46 am)

Replying to: scammarn (Mar 27, 2009 6:14 am)
Just to add a little more to the good replies you have already gotten. Even if you pulled $5K out of your pocket and traded in on a new vehicle to start off just financing the purchase, you will be in the hole for probably the first 3 years with that one. The one new will depreciate immediately and be worth less than what you paid for it... and it will take you probably 3 years (assuming 5 year loan) to catch up with that depreciation. So, the only way you will get even is to pay off the $5K (whatever it actually is) negative equity on the current vehicle then put perhaps 20% down on the new one, example finance $16K on a vehicle you paid $20K after settling the negative equity.
 
Does not sound attractive, but once you get down in a hole like this, first step is to get back even, then try and get ahead. Not a quick way to handle this without parting with $8-10K of cash...you can handle over time and spread the cash out, but you won't be getting another vehicle for awhile. Sorry, but that is just the way it works out.
 
Bill

#3882 of 3886 Re: trade in a car that has more owd than its worth [scammarn] by isellhondas

Mar 30, 2009 (3:42 pm)

Replying to: scammarn (Mar 27, 2009 6:14 am)
Even with great credit it would be very difficult to roll that much negative equity into another car. The lender would be lending a lot more money than the car is worth.
 
If you used "last chance" financing I'm guessing your credit is still less than stellar so unless you have the ability to write a huge check to cover the deficit and a down payment, you are probably stuck.

#3883 of 3886 Re: ... more owd than its worth [scammarn] by wtd44

Apr 03, 2009 (7:41 am)

Replying to: scammarn (Mar 27, 2009 6:14 am)
So what have you decided? Have you resolved to not deepen the financial pit?

#3884 of 3886 Re: trade in a car that has more owd than its worth [scammarn] by joel0622

Apr 08, 2009 (2:08 pm)

Replying to: scammarn (Mar 27, 2009 6:14 am)
I have a vehicle that i owe five thousand more than its worth, due to last chance financing. Can i trade it in without starting upside down on a new loan
 
No, unless you have a pocket full of cash to put with it

#3885 of 3886 Thank you Edmunds! by heather_va

Sep 03, 2010 (11:38 am)

I felt so much more prepared to shop for a new car after using this site. I had the research on the cars, knew what my old car was worth and what others were paying for the same car. I felt that I was able to make a great deal on a new Volvo XC 60 that is a joy to drive! I couldn't believe I could get this car with more bells and whistles, especially safety features than a "less expensive car" that I commonly see on the road. Internet shopping made it a breeze and the salespeople were much more mellow and less pressuring. This was my first car buying experience on my own and I felt empowered from the knowledge gained from your site! Thank you Edmunds. Heather, Portsmouth, VA

Messages Page 389 of 389

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