How do I buy a new car with an existing loan?

Question

I'm buying a car but currently have an existing auto loan with a balance o 2600 remaining. Here are my options:

1) One dealer offered me to refinance through my same lender for the new car and to just refinance my remaining 2600 into the new loan. I paid 2500 for the down payment, btw.

2) Get BACK the 2500 I paid for down payment, put all of that plus 100 more to pay off the current auto loan I'm in, and go for the car that I really want (which is cheaper than the car the aforementioned dealer wants to sell me). The car that I really want is used but at least 4000 cheaper than the above vehicle.

Any advice?

Answer 1

Repay the existing loan FIRST. Either way, that existing loan has to go SOMEWHERE and it's better that it go away completely, rather than simply piling it onto the NEXT one.

I HOPE you can get the 2500 downpayment back. Some dealers hang onto that money like a teenage boy hangs onto porno.

Answer 2

number 2 absolutely

Answer 3

You are making 3 biggest mistakes when selling and buying a used car

(1) trading in - instead of selling it privately

(2) going to a used car dealer - instead of private seller

(3) getting used car dealer financing.

You are giving the used car dealer a blank check to s***w you - with all that mixed up in one big deal.

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Separate the 3 - into 3 separate deal - so you know exactly what is going on.

(1) sell your car privately - if you own money, find out from your loan company / bank how to sell it.  You will most likely have to do a 3 way transation at the bank office AT THE TIME of sale (you , buyer, bank)

(2) go to a bank and secure a loan

(3) go find a car sold privately.

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MSNBC had a news story on where is the best places to buy used cars. The used car dealers were on the BOTTOM of the list. They are pros at negotiations (and you and I are rank amateurs), they are pros at hiding problems on their cars, etc.

The private sales (newspaper, etc.) were the best places. The seller will not tell you all the problems, but they don't know how to hide them.

And a private seller are at MOST they are equal in negotiation skills to you and me.

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My 94 Civic can get 41 MPG (and I was doing 72 for the mileage test - so I can do even better at 55). The engine + tranny + suspension runs like new. It ain't no beauty but it is rock solid. If I had to sell it, I would not get more than few thousand dollars. This is the kind of car you want to look for.

Just take your time, as good old used cars are cheap but hard to come by.

Good Luck...

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Here's some rules you should consider when buying a used car

(1) don't get sold on the paint job = meaning cars having good exterior, fancy CD radio, etc.

(2) look for car with sound ENGINE + TRANNY + SUSPENSION.

(3) test every button, k**b, switch, slider, etc.. Ex: even in the summer test out the heater & even in the winter test out the AC (if you can).  Slide the AC/heater to fan1, fan2, fan3, etc.  then slid the vent to defrost, front, bottom, etc.  Test the high beam, low beam, etc.  Test (flip) the visor.  Test the alarm.  Test all 4 doors.  Test the rear defogger.

  *****   TEST EVERYTHING.

(4) BEFORE the first start, open the engine bay and see if the engine is already warmed up.  Many engines starts well when already warmed up, but may have problems when cold (or cold start).

(5) test drive with the sound system off and window down. Listen for weird sound coming from the wheels & suspension.

(6) Look inside the engine bay to see if you can see see leaks, etc.  It is normal to see some oil and grease.  But too much means that the car is leaking oil somewhere. Too clean (really clean) means they just wash the engine bay - possibly hiding some oil leaks.

(7) check the engine oil dip stick. If the oil is BRAND NEW CLEAN, the seller MIGHT be hiding something.  If the oil is jet black and /or smells like gasoline (or burnt), you might have engine problem).

(8) once you are satisfied with the above - you can NOW take it to the mechanic for the engine + tranny + suspension inspection.  He won't find everything, but he will find the obvious.  Take it to a mechanic EVEN if you are buying from a used car dealer.  They cars are NO better than cars you buy from ebay and craigslist.com.  Just more expensive.

good Luck...

1) Safety Ratings:

http://www.safercar.gov/

http://www.iihs.org/ratings/default.aspx

2) Reliability:

http://autos.msn.com/home/reliability_ra...

http://www.edmunds.com/apps/ratings/rati...

3) Fuel Economy:

http://www.fueleconomy.gov/f*g/sbs.htm