Edmunds Answers

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  • avatar MrShift@Edmunds 03/06/10 10:55 am PST

    Basically and somewhat simplistically, the dealer pays off your loan for you and then adds that deficit amount you were upside-down, to your new loan, at the new interest rate. It's a pretty brutal way to buy a new car, and now you'll be hopelessly upside down on the new car, probably for the length of the loan.

    If I were you, I'd pay down the Sentra until you are even-up on the loan, then sell it privately, and put a large down on the new car. You'd be amazed how much less your payments will be.

    Your current plan is, in my humble opinion, somewhat ill-advised financially.


Answers

  • MrShift@Edmunds 03/06/10 10:55 am PST

    Basically and somewhat simplistically, the dealer pays off your loan for you and then adds that deficit amount you were upside-down, to your new loan, at the new interest rate. It's a pretty brutal way to buy a new car, and now you'll be hopelessly upside down on the new car, probably for the length of the loan.

    If I were you, I'd pay down the Sentra until you are even-up on the loan, then sell it privately, and put a large down on the new car. You'd be amazed how much less your payments will be.

    Your current plan is, in my humble opinion, somewhat ill-advised financially.


  • oldfarmer50 03/06/10 11:45 am PST

    As I understand it, many dealers and banks will not roll over negative equity any more. Unless you have supurb credit I wouldn't even try.

  • isellhondas 03/06/10 2:41 pm PST

    That's called being overadvanced.

    A bank isn't going to roll so much negitive equity into a new loan if the total isn't what the new car is worth.

    People do this (or try to) all of the time and I'll never understand why.

  • bayless 03/06/10 3:10 pm PST

    This is really more in response to the answer given by "Isellhondas"; I am in the SAME predicament. AND- I sold New Cars for a living for YEARS!!!!! Did I NOT KNOW BETTER?!?!? Of COURSE I did!!! This was a deal set up by my FATHER, who INSISTED that if he were to co-sign, it would be by HIS RULES!!
    I have a 2004 GMC Yukon Denali, FULLY loaded, w/ 99,941K. The payoff??? $23,000.00. GROOVY! I was critically ill at the time, and unable to make major financial decisions- or so they THOUGHT. Its a LOOOONG, sad story that I won't bore you with (the details), but here I sit- with a vehicle that I CANNOT afford to FEED (it gets between 7-9 MPG) or insure, (my PREMIUM IS ABOUT $692.00/MO. THE QUOTE ON THE NEW CAR WAS $50.00 less/month! or- $400.00 less/year!!!) and monthly pmnts. of $420.00. I make about $900.00/mo. I am disabled, but have a part-time job. My DREAM job has become available, but I CAN'T TAKE IT, because I CAN'T AFFORD THE GAS!!! (It's in another town, about 40 miles away.)
    I HAD a deal worked last wk.- an EVEN trade- NO money exchanging hands,collateral=collateral, (yes-it IS unusual to actually get this deal- I agree w/ Isellhondas on that one!) for a 2003 Acura MDX, w/ 107K, LOADED, ONE owner, garaged, checked out PERFECTLY PERFECT!!! The BANK said NO! It seems that the Denali books out about $1,000.00 - $3,000.00 HIGHER than the Acura. Did I MENTION that the DENALI has 4 BALD tires, several DEEP dents, a BADLY cracked Windshield, and makes an ALARMING grinding noise when cranked to the left in reverse???? AND- when checking the books,needs to be entered in "fair", or "average" condition; while the Acura needs to be entered in "Excellent", or at LEAST "good" condition? NO?? Well, it does. Does the bank CARE?? NOPE!! ARRRRRRRRG!!! SO, I am STILL looking! WHY DO PEOPLE KEEP TRYING, Sir??? Because they MUST! Good luck to you, please wish me luck, too. :)

  • isellhondas 03/06/10 4:13 pm PST

    You don't have to SHOUT.

    I do wish you luck. You are in a tough spot.

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