Trading in a car for a new one?

Question

Ok Heres a hard one. I have lived since 1995 in Europe. I returned back to the USA in Dec 2007. I came with no Credit so to establish credit I financed a car at 16% interest! I mange to get 3 revolving credit cards. Through the advice of an Idiot I maxed the CC cards out because I was told to establish good credit I have to max then pay monthly. BAd idea. My Score went from 680 to 587 quick. I would like to trade this car in and get another on. I still owe on the car (18k) How does trade in work? I know to most this is a silly question, but remember I left the USA at aged 17 and returned 22 years later to a new World. If I trade my car in would the dealer put what I owe on top of the selling price of the car i am buying? Example. Say the car I want cost 19K and I owe 18 on mine. Does that mean I will owe 37K for the new car? Or do they take my car and add the rest on top of the car Im buying?

Answer 1

sell your car outright.pay off the loan with the proceeds. look in the paper for a 2002 Saturn, buy  it with whats left from the sale.get great gas mileage and no car payment. then make higher payments on your credit cards and don't be late on the payments. your credit will be restored and then you can sell your Saturn ,as it has a good resale value, and then get a new car, and your credit will be restored. it just takes time and right now you don't need a new car.

Answer 2

What they do is take the VALUE of your trade in car, and subtract THAT from what you owe, because they turn around and sell your trade in on the used car lot later on.

Say your car is WORTH 8,000, but you owe 18,000, that would mean you'd still owe 10,000, and that would be added to the 19,000 for the new car for a total of 29,000 dollars.

Make sense?

To find the actual trade in value of your car, go to the kelly Blue Book website. I think it's www.kbb.com but don't quote me on that....if that's not it....google it.

Answer 3

Don't do it!  Yes your right the dealer will put what you owe on the new car. So technically your paying for two cars and you only have one.  Plus interest on top of that? It's so important to do research on purchasing a vehicle because you don't want to keep trading a car 1 or 2 yrs later and you want a car that's reliable.

Think about it you can get a BMW for 37k (3 series) If your car is in excellent mechanical condition, it's not worth it!

Answer 4

if the car you want is 19k and you owe 18 on yours, the trade in will also make a difference of how much the dealer will give you for the car you have now.

dealers will h**l rip you off for the worth of the car you are trading in, so if yours should be worth 8k they may only give you 5 or 6. so take the 5 or 6 off your 37k and then dont forget to add the cost of transferring between cars, insurance and the like.

in short if you owe alot and are maxxed out its going to be really hard to make it worth your while!

Answer 5

The dealer takes What you still  OWE and what the car is valued and the difference  is what the credit you get (minus some profit they have in mind).

So let's say the car is worth $20K, but you owe $15K.  You get credit for $5K.  But the dealer is going to want to make a profit later when he sells it.  In his TRADE-IN value book, the car might only be worht $17K.  So you get credit for $2K towards new car.

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This is all assuming that you do NOT owe MORE than what the car is worth (upside down on the loan).

Good Luck...

P.S.  If the car is running good, you get the best value if you just sell it privately.

Answer 6

I would highly recommend selling your car outright first before purchasing another car.  If you trade your car, the dealership will be quick to try to make money on both negotiations. (buying your old car AND selling you the new car.)  Also, any negative equity found in your old car will be added to the new car.  This can be really bad because you go into the new car with a lot of negative equity which increases even more the day you drive your new car off the lot (because every car on the road is a USED car.)  You will be in a world of hurt if you ever have to get out of the new car.

Answer 7

s***w is the word and cut up the cards smart.... selling the car you will lose money but not as much as if they come and get it.... and kick that Idiots butt