Is there any problems trading a financed car?

Question

Almost two months ago, I acquired a 2004 dodge intrepid through financing at $12,200. I soon realized that there is a possibitiy to acquire a new car at an almost the same price. How do I proceed if I decide to trade this car for a new one? Any ideas, any help?

Thanks.

Answer 1

Most places will buy your car from you. It is like a trade in, except they will pay a certain amount of the car you own to the bank you owe. Sometimes they will pay off the entire amount(they did that for me with my focus) and the price of your car will be the same as sticker price. If they estimate that you owe say $10,000 and your car is only worth $8,000 to them, they will still pay off your loan, however $2,000 will be added to the price of the vehicle that you will be buying. On the otherhand, if you owe $10,000 and your car is worth $12,000 to them, $2,000 will be a trade in value taken off of the price of the vehicle you wish to buy. A good way to prepare is to find the car you want, find it's value, find out how much you owe the bank exactly, and find out how much the car you wish to trade in is worth. Good Luck, and I hope you find what you want!

Answer 2

Well good news, your own a nice car. The bad news is that you owe way more than the car you have is worth. 2004 is the last year that they made the Dodge Intrepid and so it depreciates very fast. If you financed $12,200 and your payments are lets say $400 then you are several thousand dollars upside down. This means that on top of a normal down payment you would need to pay the difference of the $11,700 you owem and the $8500 the dealer will give you. So $3,700 plus whatever the downpayment your credit situation dictates. However if you have excellent credit then you may need no downpayment but the point is you do not buy and sell a car after 2 months because of the loss of value you have incurred. Wish you the the best!

Answer 3

Here it is: Your car is worth X

You owe X + Y

Y is the difference in what you owe and what it's worth. My guess is that Y is rather large right now, maybe as high 4k but maybe more.

If you were to trade, Y will get added to whatever you buy. It never goes away. If a dealer can discount a car by Y, you will no longer get that discount, as the dealer will use it to pay off your ride now.


What bostonian says ALMOST makes sense, except for the only way you are ever going to get to a point where you owe less than what the car is worth is by sending in that final payment....and even then it's a crap shoot.

You have a decent enough car for now. However, in 2 or 3 years it'll be a turd you can't give away. You need to seriously consider ditching that ride now and flipping that negative equity onto a car that has RESALE VALUE. <<

Answer 4

Although dealers do this all the time, it may not make financial sense for you to do so. Most likely your car's trade-in value is quite a bit less than the outstanding balance on your loan. The excess difference between your trade-in value and the balance of your loan will have to be added to the new vehicle's loan, or paid in cash by you.

Most new cars in the $12,000 region don't have enough "wiggle room" built in to the price of the car to absorb what is likely to be a shortfall of around $4,500. The trade-in value of that Intrepid is around $7,500 at best. If you were to trade it in on a $12,000 vehicle, you would wind up paying over $16,000 for a $12,000 car. Not a very wise financial decision at all.

Your best bet is to stay put for the next few years until you owe less than the Dodge is worth. That's likely to take 2 - 3 years at the very least.

Answer 5

There is no problem in trading assuming you understand that from the proceeds of the trade the loan must be satisfied before any money will apply to the new car. This may mean that you lose money on the trade if the trade amount is not enough to satisfy the loan. You will have to come up with the difference.

Answer 6

You should keep making payments on it until the payoff balance and resale value become equal. As of right now, you owe more than it's worth. Which means the negative equity (about $3000) will be added on to the new car, making it more expensive.

Answer 7

Call the lender and get the payoff amount for the loan. Also ask for the per diem (daily interest cost). When you make a deal to purchase the new car, the finance manager at the dealership will arrange to payoff your existing loan. If you purchased GAP insurance, an extended service contract or any other finance product on your existing car, make sure to cancel those policies and get the unused premium refunded to you.

good luck

Answer 8

you're what's termed the different way up on the 2004 you obtain 2 months in the past. maximum sellers in the journey that they take that's going to can charge you maximum of what you owe on the Intripid And the cost of the motorized vehicle you favor to commerce it for. strong success i imagine the ultimate aspect to do might want to be to both shop the Intrepid till you get the stability way down or attempt to get someone to take over the funds.