Edmunds Answers



  • the_salesman 01/25/13 3:17 am PST

    First things first; you were only offered a Trade-In value because you were tring to buy a different vehicle, correct? If that's not the case, you should ask for retail instead of trade-in.

    In the case when you trade in a car that is worth less than the amount of the note, then you are "upside down." Happens all the time, so don't worry. Now, to answer your question, when you're upside down on your vehicle and trade it in for a new/different one, the amount of negative equity (in your case $4,200) gets transferred over and becomes part of your new loan. When that transaction occurs, the dealerships owns your trade (your KIA) and you don't owe anything on it, but you also no longer own it. So let's say you bought a new car and it cost you $15,000 and you have decided to finance the whole thing, now because of your "upsidedown'ness" you are actually financing $19,200 (the $15,000 for the new car and the $4,200 that carried over from your KIA). It might be hard to get a loan for that amount but it can be done.
    Let me know if you're still confused :)

  • jhinsc 01/25/13 7:34 am PST

    What was the reason the dealler service dept said you had sludge? Did you do oil changes at propert intervals? If you can show maintenance records documenting maintenance was done at proper intervals, then the Kia dealer should honor the warranty and repair the problem. As far as your upside-down position, its better to keep the car for now rather than roll it over to another car loan/lease. If you trade, you'll be in an even worse upside-down position than you are now.

  • Stever@Edmunds 01/25/13 8:33 am PST

    If you do have service records, ask Kia to open a case and review your warranty claim. And if Kia or the dealer isn't cooperative, you may want to check with your state's consumer protection agency or attorney general's office.

  • rosshome 01/25/13 9:56 am PST

    I guess, I needed to say that have two situations right now.
    1.If I keep the Kia...They want me to tow my car back to dealership, at my own expense, after the work they did, did not correct the problem.As the oil light came back on on the way home from them.Towing will cost at least $120 again.If ts the motor, it could cost 2-5000 dollars/with only 12 mo. warranty on motor.
    2.If I trade it in, i could possibly get lower payments, but upside down.

    If I fix the Kia, thats a new loan to fix it.12 mos. isnt a long time.What if something else went wrong?
    My dad said maybe get a new car loan and let them repo it if they want.(Husband left me and son ,with alot of debt)Wont they charge me the difference of the remainder?
    Sorry, I'm not sure what to do.(husbands an alcohlic and left us and took our money and not in good position. Any good advce about the car issues would be very much appreciated.

  • rosshome 01/25/13 9:58 am PST

    Although I didnt keep all records, I know i tried to keep regular oil changes and my dad said that he's seen people drive a vehicle without doing many oil changes and they not get like that.(although he wouldnt recommend doing that).

  • jhinsc 01/25/13 10:37 am PST

    It doesn't take much in the way of documentation - just receipts showing you paid for oil changes and the mileage it was done. If you did your own and had someone like your dad or a friend do it, receipts showing oil/filter purchase, date and mileage is sufficient. As far as getting another car and loan and then letting the bank repossess the Kia, that's worse than being upside down because your credit scores will take a big hit for up to 7 years, making it difficult for you to obtain a loan when you might need it more. It sounds like you might be financially stretched as it is now - would you qualify for another car loan while keeping the Kia before you default on the Kia loan? Sorry to hear about your circumstances. I'm not saying you skimped on maintenance but it's an important lesson to others - the advice is don't! Newer vehicles pretty much only need oil/filter changes at regular intervals to keep them running properly for many miles before any major service is needed.

  • rosshome 01/25/13 12:48 pm PST

    Yes, i do qualify, i suppose the only option i see is to be upside down.
    I was offered 26,000 car offer(which includes my pay-off/upside down amt.and car loan)
    Thanks for responding. I'll let others know of this site to ask questions.

  • texases 01/25/13 1:42 pm PST

    You've gotten a lot of good advice. Is there anyone you can talk to about this? You're in just about the worst situation, quickly buying a new car under very bad financial circumstances. Dealers love this, it allows them to maximize the price by layering all these complexities. Do you belong to a credit union or bank? Maybe a loan officer there could help you.

  • rosshome 01/27/13 10:26 am PST

    I belong to a credit union. They offered to finance me for a highter monthly payment. Your explanation made sense and was along the lines of what i was thinking.
    However, while speaking with the guy at the dealership his explanation looked similar to this below....Also, i thought maybe he was trying to confuse me, because the amount i figured out was closer to what you said, rather than the amt/way he presented it to me....

    18,995,subtracted 6500 trade for my car....
    And said since blah, blah...the amt changed so
    down here add 10,700 pay off of vehicle,,fees
    =26,000.00 (+)
    That didnt sound right.
    I'm not in a good situation,I am careful as much as possible to look things over, but that didnt sound right.

  • jhinsc 01/27/13 11:52 am PST

    Based on your numbers (18995-6500+10700), you have a net price of 23,195. The difference of $2,805 would be taxes, DMV, and other fees? Break it down so you know exactly what you're paying. What is the new car you're trading to? Be sure you're getting a good price on that - price of new car should be independant of the trade - and not because the dealer is telling you they're doing you a favor.

    Have you also checked into getting another opinion on your current Kia? What if it's a bad sensor and the engine is actually ok? Does it run ok now? I can understand if you now have the "new-car" bug and just want something else, but you should think hard before spending $26,000 on an $18,995 car. You are upside down even if your car is in good condition and it appears the dealer is giving you fair trade-in value as if there is nothing wrong with it (Edmunds TMV). Kia's don't hold their values as well as other makes. Just trying to caution you from making a big financial mistake if it's unnecessary. I would look into "running up the food chain" with Kia to get them to fix the problem if it's still covered under warranty. Because the dealer will likely fix the problem under manufacturer's warranty and then resell it for a much higher amount than they gave you in trade.

  • wendy49 02/11/13 1:57 am PST

    they can not show negitive equity on the car loan app so they will do some number changing to get you approved a word of advise dont buy another kia if you buy another car for say around 15000 and you are upside down 5000 and they pay off your car you will finance 20k about 400 a month you dont have to pay the 10.700 the dealer will and then they own the kia but if your car is still pretty good and under warrenty then i would make them fix it

  • rosshome 02/11/13 9:09 am PST

    Thats what ive been told. unfortunately, they arent willing.They made out like the oil had ludge and that there was metal in the pan.I didnt feel like i beleived them, yes im under warranty, but cant provide maintenance records.Only oil changes and sometimes those went over the recommended time.If I had a male who was knowledgeable.But there is noone who doesnt want money from me, as if I have some.Everyone I've inquired just wants money i dont have-quick buck. But I end up no better for it.I feel doomed!

  • texases 02/11/13 10:09 am PST

    What are the oil changes you can document? At what miles? What does the owners manual recommend? If you'll list them for us we'll have a better idea whether you have a case with the dealer/Kia.


  • dealerexp 02/24/13 8:27 am PST


    Contact Kia the manufactuer, and demand that the vehicle be fixed under the powertrain warranty. If not, contact a lemon law attorney.

    You will be asked to provide reciepts for oil changes you have had, go to the place where they were done and ask for the records. You owe $10,700, if you want to trade it, then find a new car with a rebate, as in the manufactuer is giving money off the car so they can sell it. Right now, Chrysler is giving $3000 rebated on base 300m car. Go on NADA.com and look up the price of your Kia for average trade in value, insist that the dealer gives you this price, nothing less.

    I looked up a Kia similar to yours and it appears that $6500 is the average trade in price on NADA. If you owe the bank more, then you must pay the difference, hence the $4200. You can try to sell it yourself , but finding a new car with a big rebate is a bettter idea, the rebate will offset the cost for you. Hope this helps.

    Source: I worked as a Fixed Ops Director for new car dealerships, and was a Kia Service manager.


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