Car trade in?

Question

I have a Toyota Rav4 2001 with extended warranty that runs out it July. I'd like to know how trade-ins work. I owe $5000 on it and paid about $8000. If I get say a Toyota Yaris that sells for $11000 how will my payment work out ?
Thanks

Answer 1

I am a car dealer, and I'll try to help. The way this works, is: The dealer wants to buy your vehicle at wholesale value and then recondition it and sell it for retail. They want to sell you a new vehicle for retail, but you want to pay wholesale. Here is the best way to do this.-

!. never trade in your vehicle. Sell it to an individual in the paper or auto trader magazine.

2. take your cash and pay off your existing note.

3. pick out the car you want (general rule of thumb is to get all the options you want, at the price you are going to pay it will be worth it at time to sell the vehicle)

4. Take the sticker price of the car and multiply it by 88.3%. Then subtract any rebates and incentives the factory offers. That figure will be close to cost on the the vehicle. You want to pay as close to that figure as you can.

Use the rebates and dealer discount as a down payment on your new vehicle, Just be sure that the total financed is the figure you got by using the 88.3% factor and subtracting the rebates. The only thing they should add is the tax, title, and license fee.

Now for payments. The amount you will pay depends on your credit Beacon score and the amount the dealer can get you to pay. The dealer makes money on the finance too. I would go to my bank and make a deal for the best payment you can get, then at the dealership you can forget about the hassle of negotiating the payment. But if you want to do all this at the dealership, a fair rate for someone with average credit is to figure $18 per $1 K financed. In other words if you are financing a total of $10,000.00 your payment should be about $180 for 60 months.

Answer 2

If you owe more on a car than it is worth when you trade it in, the overage is added on to the loan. If you owe $5000 on a car, and Blue Book values the car at $3500, the $1500 will be added to your new car loan.

Answer 3

you need to see what yours is worth on a trade in value
go to nadaguides.com to see what the trade in value is - just remember you will actually get less than that from the dealer.
then you can figure out how much to spend on a new one and what the payment will be