2007-01-09 10:37:15 · 5 answers · asked by Kristi 1 in Cars & Transportation ➔ Buying & Selling
You don't "need" any time between loans. Technically you could buy a car on Monday and trade it on Tuesday.
The major reason that most folks wait a few years -- or at least SHOULD wait -- is that unless you put down a fairly large down payment you will be "upside down" on your loan for the first 2 or even 3 years (on a 5 year loan).
If you're upside down on your loan, you owe more than the car is worth. If you trade while you're upside down, you'll either have to come up with cash to cover the difference or add that difference to the loan on the new car. That will increase your payments -- often substantially -- and leave you even further upside down on the new car than you were on the old one.
2007-01-09 11:22:19 · answer #1 · answered by Bostonian In MO 7 · 0⤊ 1⤋
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2016-09-26 17:31:58 · answer #2 · answered by Gustavo 3 · 0⤊ 0⤋
You don't need time between loans. Depending on your credit you can have multiple loans. I had 2 loans for 2 cars at the same time. You can trade a car in anytime you want. There are no time restrictions.
2007-01-09 10:49:12 · answer #3 · answered by Better_than_you 3 · 1⤊ 0⤋
It's usually beneficial to keep a loan longer than a year so it can improve your credit. Lenders don't want someone who pays it off a month later because it's not profitable for them.
But you can get a new loan anytime you want, as long as your credit is good.
2007-01-09 11:15:04 · answer #4 · answered by Anonymous · 0⤊ 1⤋
You need the payoff of your loan, plus, the total you're going to finance on the new car,minus, the trade in value of your car(kbb.com) to be less than 125% of the retail value(nada.com) of the car you want to buy. wac.
2007-01-09 10:46:31 · answer #5 · answered by Warren K 2 · 0⤊ 1⤋