What is the best swap/sell/trade options for changing automobiles?

Question

Currently drive a 2000 Buick Lesabre; need something that's smaller/tighter/fuel efficiant/fun. I still owe on the Buick (never had a car loan before this) a little more than it's worth through BlueBook;

Answer 1

The best option in your situation is to sell your car through your local newspaper or through an online serviced such as http://www.craigslist.org/about/cities.html to get the most money for your car's retail value. Once that is done, pay the remaining balance of the loan off, if you can afford to do so.

Anytime that you trade a car into the dealer, you won't get the best price for your car. You will usually get a better deal selling it on your own, that is if you have the time to do that.

Of course, in your situation, therein lies a problem that most people face. Because you owe more then what the car's retail value is, you are considered to be "upside down" on your payments.

Most people are upside down on vehicle loans, so when they go to sell or trade the car in, they still owe money on the car loan. Even if you sell you car outright to someone, you still have to come up with the extra money that you still owe. Since some people can't afford to pay the difference, so most will trade in the car for a new one and then they will apply the negative equity of the old car loan to the new car loan. So now they have a new car, but again, they will owe more then what the car's retail value is.

As an example, according to Kelly Blue Book, your car value is anywhere from $4,330.00 to $5,390.00 if you sold it on your own. If you owed say $7,390.00 on it and sold it for $5,390.00, then you would still owe $2,000.00. The trade in value for your car would be $3,060.00-$4,175.00. So as you can see, you get less wiht a trade in and you would owe more to the lender. Of course, these are rough estimates as I don't know where you live and the mileage and condition of your car. It just gives you an idea.

Here in VA, the dealers I have visited will use either the Kelly Blue Book, http://www.kbb.com or the National Automobile Dealer's Association used car guidebook, http://www.nada.com/

Good luck and I hope that wasn't too confusiong and helps you in your dilemma.

Answer 2

If you try to sell your vehicle or trade it in, you should expect to get only the wholesale value, not the retail value. If you buy from a dealer, expect to pay retail value. Buy from a private party for the wholesale value.
You can look up both values at www.edmunds.com. If you owe more than the car is worth, you are not going to get ahead.