Last post on Sep 03, 2010 at 11:38 AM
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#3881 of 3886 Re: trade in a car that has more owd than its worth [scammarn]
Mar 27, 2009 (9:46 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.
#3882 of 3886 Re: trade in a car that has more owd than its worth [scammarn]
Mar 30, 2009 (3:42 pm)
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]
Apr 03, 2009 (7:41 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]
Apr 08, 2009 (2:08 pm)
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!
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