How to trade a car in when you owe more than what it's worth.

Question

I own a 2005 honda civic that I bought used 13 months ago. I have had nothing but problems with it overheating and no honda dealer can figure out whats wrong. I have had about everything fixed and it will fix the problem for about a month then it happenes again. I do have the bumper to bumoer warrenty so thankfully most has been covered but it is becoming a hassel and a pain to keep bringing it in and hearing that they have no idea whats wrong with and just trying things. Unfortunelty I owe more than what my car is worth trade in because my last car which was a pontaic sunfire the tranny died and I had to roll in. Any ideas on how to trade in the car when I owe more than whats its worth? At this point I would rather get rid of the car then deal with this.

Answer 1

You will either need cash down to cover the inequity on your old loan plus some tax, tags, etc., most likely...unless the dealer can wrap that amount into your new loan,providing your credit is strong enough.

Answer 2

Your going to have to come up with the cash to pay the negative equity. Banks and finance companies will only finance a certain amount of money on vehicles to limit their loss in case of having to repo it. You can go get a personal loan for the difference. I would suggest that you keep this one, as your getting into a pattern of trading thats putting you deeper and deeper in debt.