Bought a new car with a trade in. They included WHOLE payoff balance in the contract. Is this correct?HELP?

Question

I bought a new vehicle. Had a trade-in; however, they included the WHOLE payoff amount on the balance owing on. Is this correct? The trade in was a 2003 Toyota Matrix net value 10K; payoff amt 17500. Please help. I want to null this contract if not correct. It has been only two weeks since purchase.

Answer 1

Look closely at your purchase agreement (contract). It should list the price of the new vehicle (including taxes and registration and any other dealer fees), the DEDUCTION for your trade ($10K), and the pay-off amount of the trade ($17,500). The amount you owe is the sum of the new car plus pay-off minus trade-in (plus interest, of course).

Let this be a lesson NEVER to buy new cars - they depreciate much too quickly, often leaving the buyer upside down (owing more than the car is worth), especially when you go for longer loan periods (5, 6, 7 years). You have two choices - sell the new car and get something cheap, cheap, cheap while you pay off the balance of this new loan. Or, keep the new car and get it paid off as quickly as possible (pay extra towards the principle every month). Definitely get the gap insurance - if this car is totalled, you will continue to pay on it for years to come.

Answer 2

They have to pay off the original amount owing. They should have included somewhere the amount that they were allotting you for the trade in.

They can not just send the original bank 7500.00 and expect to get by with that.

2 weeks since purchase you probably can not void the contract as you have been driving the car. If you try to void the contract they can come after you for the pay off amount on BOTH cars, because in order to sell the trade in car they have to pay the original lein holder

Good Luck. Check the contract again, I am sure that they included the 10 K somewhere.

Answer 3

It's difficult to tell with the information provided. However, you would typically add the amount owed on the trade-in, the cost of the new vehicle, all the fees involved minus the trade-in value and any down payment.

Answer 4

Yes, they roll everything over into the new contract . . . it's standard, but makes you SERIOUSLY upside down. If you can't get out of the contract, I STRONGLY suggest you ask your agent for "gap" endorsement on your collision & comprehensive coverage - otherwise, if your car gets totalled, you'll STILL have to make major payments.