Edmunds Answers

Answers

  • 04350 09/17/09 6:52 am PST

    The dealer (or more accurately the lender) will pay-off your old loan. The dealer will take your used car, allow a wholesale trade-in value on your transaction, maybe re-condition it some and either try to sell it for awhile and then if unsuccessful send it to auction. Your deficiency would be financed through your new vehicle loan purchase, so it sounds like you will be upside down on the new loan also. This assumes that the dealer can find you financing at a reasonable interest rate. The dealer can almost always find people high risk financing at 18% for a new vehicle loan.

  • chisss 09/17/09 8:54 pm PST

    If you owe $11,000 and the trade in is $8,000 and say the new car is say $20,000 your actual financed amount would be $23,000.

  • yoderman 08/30/10 9:24 pm PST

    I would wait until you have paid off your old car, or at least owe less than it is worth. You'll be upside-down on a much bigger loan, and you'll have a REALLY HIGH interest rate since you wouldn't have any collateral (since you would be borrowing much more than the car is worth). Save up $3000, then sell your car yourself, pay off the loan, and start fresh.

  • thecardoc3 11/12/11 8:52 pm PST

    There will come a day when you will look back and wish you had been more mature about your transporation expenses. Your wasting money and it's quickly going to be in the five digit range. Worse yet, if anything upsets your cash flow, you could end up thousands (maybe tens of thousands) in the hole, and the car on the back of a repo truck.

    Stop the insanity now. Pay off your car. Maintain it like you need it to last you another twenty years (because it can and you do) and when its paid off open a savings account and start making that payment to it like you bought another car. The only time you touch that money is if your car requires a major repair (over $1000) which you'll notice you then will have the cash for. Or else on the day your mechanic says that it's time for a new one, which again you'll hve cash for and will have learned the value of having a great mechanic look out for you and your car. About ten years from now, when your car has been paid off and your savings account has 20K+ in it, you'll realize just how much you really love your present car.

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