Has anyone traded in a car that still had payments left?

[Shoopy]

I''m thinking about trading in my car for an SUV. I don''t necessarily need the space but I think my car is a little too low for my taste. But I still have payments to make so I''m not sure if its a smart thing to do. Thoughts/Opinions/Experiences?

 

[D&T]

oh yes, I've done that a couple of times back in the days

it really depends, on what you think you could sell it for on your own, whether you want the hassle and/or conveniently take what the dealer has to offer you, they essentially pay off your car for you, and roll the negative amount into your new loan. I chose to do it that way, on one of our old car, DH had a few grand left on the car, but it was in searious need of fixing up that would cost a few grand more which we couldn't afford and his car was worth basically the same amount as what he owed, so dumping more money in wouldn't have made sense to us and we needed a more reliable car (we lost really about $700) though and less headache for us, we didn't want to sell it ourselves, because of the issues of having to pay it off then getting title and turn it around to the buyer

and heard horror stories before, but a few good ones (if it was already paid off)

ETA: also you get a break on sales tax when you trade your car in, so your actually reducing the amount of sales tax on your new vehicle due to your trade in value vs on sticker price.

 

[lilyfoot]

It really depends on how much of a loan is left on your car.

The amount left on your current loan is referred to as negative equity.

They will take your car as a trade-in, and give you a credit for what it's worth, but the amount left on your loan is still tacked on to your new loan.

i.e.

You owe $5,000 on your current car, and it's worth $4,000. New car loan is $20,000.

$20,000-$4,000 trade in = $16,000+$5,000 negative equity = $21,000 final loan amount.

You will have a harder time getting a new loan depending on how "upside down" you are on your current car.

ETA: This method usually results in being even more upside down on the new loan since you're tacking on extra money to the loan.

 

[tlh]

I have. It is no big deal - as long as the dealership covers what you owe on the other car.
My friend owed more on the car than what it was worth, and they just rolled them together in one loan... a big loan. I personally wouldn''t have done that, but sometimes staying with a vehicle that doesn''t fit your needs - even when you are underwater - doesn''t make a lot of sense either.

Good luck to you!

 

[Rachie]

I have turned in a car early for a lease only so I don''t know if this will apply to you but I can tell you my experience.

The earliest I have ever turned in my car was 3 months and the dealership made those last three payments for me. They told me that if I would have had more than three payments left that they would have rolled the extra months into my new lease. So, if I had 5 months of payments left then 2 of those payments would have been rolled into the new lease and the other 3 paid by the dealership. I would imagine that if you own your car that they may just subtract your payments from what they would have given you for the car?? HTH!

 

[Shoopy]

It''s a fairly new car (2007) so I have about $10k left on the loan. When I first purchased I didn''t have children on my mind and while I can fit all of DD''s stuff in my car without a problem, I do like the feeling of being higher up and the comfort of taking her in/out without having to bend over so much. I may go to Toyota today and just see what kind of deal we can get.

 

[lilyfoot]

Date: 12/18/2009 10:36:18 AM
Author: fiery
It''s a fairly new car (2007) so I have about $10k left on the loan. When I first purchased I didn''t have children on my mind and while I can fit all of DD''s stuff in my car without a problem, I do like the feeling of being higher up and the comfort of taking her in/out without having to bend over so much. I may go to Toyota today and just see what kind of deal we can get.

Do you have any idea how much your current car is worth? You should definitely check that out before going to a dealership!

 

[D&T]

The last time I did a trade in was right before I had my first DD as well, I had a two door civic, only one and half years old, but owed lik $11000 at the time, got a trade in for $10200.... so it was worth it for me.

Another thing, go to several dealers for a trade in quote I had several dealers give me a quote of $9500-$9800 and finally went to another dealer which I ended buying my car from and they were the one that gave me a higher amount. With my DH''s car, we also went to several dealers, and the car that we wanted for him they gave us a ridiculously low trade in value, then we told them that we would only buy their vehicle if we were to receive xx for trade in because this this and this dealership gave us this amount... see paperwork. The dealership did the deal with us.

 

[lilyfoot]

I have had a similar experience as D&T, different dealerships offered a difference of $1,500 on a car I was trading in.

fiery, if I remember correctly, you''re in FL right? I looked on Toyota''s website, and it doesn''t seem that there''s any cashback deals going on right now, but there is special financing (0% 36 months 1.9% 48/60 months on Sequoia, Sienna, Highlander & Rav4), so that may help out also.

 

[D&T]

Date: 12/18/2009 10:47:15 AM
Author: lilyfoot
I have had a similar experience as D&T, different dealerships offered a difference of $1,500 on a car I was trading in.

fiery, if I remember correctly, you're in FL right? I looked on Toyota's website, and it doesn't seem that there's any cashback deals going on right now, but there is special financing (0% 36 months 1.9% 48/60 months on Sequoia, Sienna, Highlander & Rav4), so that may help out also.

oooh I sooo love this vehicle

. Talking about cars, makes me have the itch to buy a new car

(so not happening, I like not having payments) buttttt I can still dream though

 

[Shoopy]

Thanks everyone for your help. I looked on Kellybook and it says the trade-in value is $8300.

 

[HollyS]

In the car business, I would say that we make ''lien payoffs'' for about 8 of every 10 vehicles traded in to us. It isn''t unusual, but be smart and only trade it when the car is worth more than you still owe for it. People who get ''upside down'' in their vehicles owe more than the vehicle is worth, and never seem to get out of the cycle. And that can be devastating to your credit rating.

 

[kenny]

I never trade in a car.
That makes thousands of dollars go down the drain; look up www.kbb.com and see the trade in value vs the private party value to see how much you are wasting.
I sell my used cars on Autotrader or Craigslist for the private party value I see on Kelly Blue Book.

It is a hassle but if you do this all your life you'll save enough to get a free car.
If you get $2000 more for it and you put in 10 hours that's $200 an hour, not a bad wage.

Also pay cash.
If you can't afford that use a very cheap car for years while saving.

Oh and only buy cars with high reliability and resale in value.
Look at those total cost to own calculators on edmunds.com or cars.com. They take into account the reliability, repair cost, resale value etc. not just the sale price.

Trading in, financing cars and buying cars with low reliability and resale value makes money disappear.

 

[lilyfoot]

fiery, did you find a good deal on an SUV?

 

[radiantquest]

I just did that. I did have a little neg. equity though. My car had 126K miles on it and by the time I paid it down the car would have been worth less so I went for it. When I was talking about doing it someone said to me that you can''t "roll" negative equity into a car that is too cheap. It can only be a certain percentage of the total price of the vehicle. I don''t know if that is true because I bought a pretty cheap car and that never even came up. I would think that would not be an issue for you because SUVs tend to be up there in price. Pilots are like 38K which I think is good for an SUV, but still enough that it wouldnt be a problem rolling negative equity.

I agree with putting it into your next loan. There is no way I would go through the hassle of selling it on my own. As long as it is not a lot then you will pay it off before the car is worth nothing.

 

[steph72276]

I personally wouldn''t do it, especially if you are buying new. Think about it...the second you drive off the lot, the car begins losing tons of value..then if you add negative equity onto it, that''s thousands right off the bat you are underwater.