Question:

My car is worth about $11,000 and I owe $15,000 if I trade it for a car that cost about $6,000 what happens?

by Guest33713  |  earlier

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My car is worth about $11,000 and I owe $15,000 if I trade it for a car that cost about $6,000 what happens?

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9 ANSWERS


  1. They would have to pay off the trade ($15000) and add that to your $6000 car which would put you more into debt.  


  2. You still owe that money. So don't waste your time and keep the car. It wouldn't make any sense to get a used car and still have to pay for the $15000 loan.

  3. your new one will cost you 10,000.00

  4. You'd owe $10,000.  Do I not understand the question, or do you not understand math?  It's worth $11,000 - meaning you'd get $11,000 when you turned it in.  You use that money to pay off the $15,000, but then you still owe $4,000.  Now you are buying a car for $6,000, so you owe $10,000.

  5. If I understand it correctly, you propose to trade your $11,000 car directly for a $6,000 car, with no money changing hands. If you do that, you will still owe $15,000, and you will have a $6,000 car. Your negative balance would go from $4,000 to $9,000. You would be driving in the fast lane to bankruptcy.  

  6. the dealer will not give you $11,00.00 for the car, he will want to be able to sell it for around $11,00.00 so he will give you about 40% less or about $7,000.00 or so.

    the dealer will also have to payoff your loan of $15,000.00 which leaves you owing him $8,000.00.

    add that to the $6,000.00 owed for the used car makes $14,000.00.  

    nobody will loan 14,000.00 on a 6,000.00 car.  you will need to pay in cash

    so in answer to your question, nothing will happen because nobody will take the deal.

    on a new high end car, some dealers would do it

  7. The missing link that isnt being explained is the bank advance on the next car.  In order to roll negative equity from one loan to another, a bank has to approve the loan on the new car.

    Banks work on a ratio called "loan to value".  Based on your credit, employmet and residence history, they will determine what percentage of the car's value they will loan, or "advance"

    On a 6000 car, a 100% advance would be the full $6000.  Many loans will loan one a 'plus fees' basis, meaning a 100%+ adcance would be $6000 plus fees.

    Depending on the year of the used car, you can expect anywhere from 70-90% advance - if you have great credit you can get 100% - and gold nuts credit will get 100-115% advance

    So

    If you have the best possible credit, figure they will loan 115% of 6000 - or $6900 + fees.  Well, you just hid $900.  How are you paying the remaining $3100?

    No bank is going to roll $4k on a $6k car.  That is a 166% advance - PLUS fees.  Figure That - assuming some banker hit his head and took the deal - you would owe over $11,000 for a car that - on its BEST day - is worth $6k.  In a month you will owe $11,000 on a car worth about $3500-4000.

    This is a deal that cant happen - and its lucky for you that it cant.  Unless you have $5000 in cash, keep driving what you have.  If you DO have $5k, pya it on the current loan.

  8. you should have a car payment on $10,000, but the question to you is who put the value on your car, the car lot, you're trading it to.  I'd put a value on it site unseen of about $7000, which means you would be paying about the same in car payments you're paying now.  How about you selling it outright.

  9. It is called being over you head. Buy down the loan and don't get over your head again. it would be really bad to do this and then do it again. Try selling the car and save some money and then buy the newer car. Don't buy a car you can't afford.

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