Trading in a car?

Question

Bought a '99 Ford Explorer Sport from the dealer in Nov '05, so i've had it 18mos now and they're offering to buy it back. If i still owe on it (which i do), they'll pay off whatever I owe and start on a clean slate w/ a new (i mean new to me, not necessarily brand new) car with no downpayment needed. I still have 28mos left to pay off my current car. I have above average credit but less than 3yrs of credit history. Is it better to just pay off my current car or is this trade-in deal they're offering worth going through with it?

Yesterday i briefly spoke to a salesman about the deal, during which he said they would pay off whatever i owe on the car. He also said that I wouldn't need a downpayment (is this possible without spending the next 10yrs paying for the car?). He showed me a newer car, '03 Explorer XLT with only 45K miles for about $13000. I asked for specific details about the car and what type of deal i'd get. He said he'll get all the info and we have an appt. to meet later today. I can give exact deal details after the meeting. They gave me an initial price for my current car based on Kelly BB "wholesale" price. I went to KBB website and they only list retail, private sale, or trade-in, not "wholesale". Should i be concerned?

Answer 1

Yes, the dealer will pay off your old loan. But what he doesn't tell you is that, if you owe more on your old loan than your old car is worth on a trade, the balance is added to your new loan. In your situation, this is most likely the case. So, the dealer isn't lieing to you, he just isn't telling you the whole truth.

Answer 2

Wholesale generally means the trade in value, although $13000 sounds like a decent price depending on the mileage, features and conditions. Be aware that when a dealer says he will pay off your current loan, what he means is he will pay it off to get the title of the vehicle from your current finance company and he will add the difference between what you owed on it and what it was worth (if there is a difference) to your loan for your new car. I've done this before and I wouldn't advise it, as you will be digging yourself into a hole.

Answer 3

You're trade-in deal isn't one until you determine what you end up paying for the new car.

Say you owe $5000 on the car, and say it's worth $3000, they will pay you the $2000 you owe, but expect the newer car that you buy to cost you an extra $2000 as well.

Bottom line is they will try to set you up on payments so it doesn't seem like you are getting screwed, but chances are you will.

It all comes down to math.

Answer 4

It really depends on the details. Are they offering to pay you more in trade than what you owe? What sort of offer are they making you on the newer car? At what interest rate?

It could be a good deal, or it could be a lousy deal. Without details, we just don't know.

If you are happy with what you are driving, you are probably better off sticking with it. The dealer won't be making any deals unless they are making money off of it, which means you'll be paying more one way or another.

Answer 5

Are they buying your car from you for what you owe? Or are they going to tack on a load of negative equity (the difference between what you owe and what they'll give you for it) to the new loan?

If you answer in the affirmative to the latter (which is normal for a dealership to do, btw) you'll be worse off.

Unless you're getting a better car, fewer miles, lower interest, lower payments and, most importantly, are comfortable with the deal.

Answer 6

not really, we do this all the time, they will just take it in on trade, so they will check the value, and give you what they think it is worth, now whatever is left they will tack on to the new loan.
www.sunrisechevy.com
midlothian IL
Gabriel

Answer 7

you get more if u sell it 2 a private party