How would this work out in trading a car in for a cheaper car?

Question

The car has $17,000.00 left in payments, and the blue book is only 9,000.00 trade in. If the car was traded in for a car much cheaper like 7-8 thousand, what becomes of how much is owed and how are the payments affected by all that?

Answer 1

most places wouldnt except the trade it would cost them money, if you traded in the car and gave them 5000 dollars then maybe theyd except it

Answer 2

You are WAY upside-down in your current vehicle.

Blue Book is only a guide, and most dealers would offer you way less than what Blue Book gives. So, let's assume you're $10,000 upside-down. You try to add that to a car that's around $10,000 thinking you're lowering your payment, right?

Wrong.

1) Banks won't overallow that much money on a cheaper car. You're asking for them to give you $17,000 on a car that's selling for $10,000? Won't happen.

2) Let's say they OK the loan... now, you're asking for a loan at $17,000 before taxes, fees, etc. So, your new payment is actually more than what you currently pay, and you're now BURIED in that car for as long as the new loan is in place. You would not be able to trade out of it.

It is always VERY difficult to trade "down" to a cheaper vehicle when you're upside-down.  

Answer 3

assuming the dealer would do the trade, you trade it in for $9,000.00, for a car costing $8,000.00.

the dealer would pay off the $17,000.00 loan, give you credit for $9,000.00 leaving you owing $8,000.00.  Added to the used car you are buying at $8,000.00, you owe him $16,000.00.

the dealer will ant to make 20-40% so he will only give you $5,500.00 or so.

nobody will loan you $16,000.00 or more on a car worth $8,000.00 dollars.  

Answer 4

The amount owed on your current loan would exceed the value of the new car. No lender will finance a deal like that. Let's say the dealer actually would give you $9,000 for the car. That leaves $8,000 in negative equity that must be paid. So you find a $7,000 car, but the new loan is for $15,000. So instead of making payments on a $7,000 loan, you will be paying off a $15,000 loan, and you payments will be near or more than what you're paying now. My advice is keep the car you have, you are in no position to trade it in.  

Answer 5

No because the dealer would lose money so they are going to lower the value of the trade in value of the car