Trading in a financed car for a cheaper one?

Question

This is the situation. I have a financed car two years into the finance. The car is worth more than the remaining balance by about $6,000. I would like to trade it for a cheaper car and get the difference as well as lower my monthly payments. How this should be done? Is it possible? Do car dealers help in this situation? Please be as specific as you can. Thanks so much for your help!

Answer 1

Will the dealers "help" in this case - that depends on the dealer... The dealers definitely can do this kind of thing, but you have to find the dealer that will pay you as close to the trade in value that you are expecting as possible. Not all dealers will give you a good price on the trade in. I am currently looking to trade in my vehicle and I know. Do not assume that any dealer will help you... you have to help yourself to get the best deal.

1) Find out what your car is worth
2) Know exactly which car you want to buy and price range. (Kbb.com, edmunds.com) can you help you with these two steps. For step 2 you can refer to carreview.com to get user opinions on various cars.
3) It is not always the best thing to sell the car outside and go and buy a different car because when you trade in a car you save sales tax on the price of the trade-in. Let's say your car is worth $10,000 and your new car is worth $6,000. In this case you will not need to pay sales tax on the new car at all since the value of the new car is less than your trade in value. If the new car is worth $12k then you will pay sales tax on the $2k. So regardless of how you do it you have to figure this in to see which is the better deal. If you have a car that is in high demand, you may be able to get a good price outside and thus net out better if you sell outside and buy a new one outside.
4) Shop around for the car you like and negotiate the price. Bring up the trade information at the very end.
5) If you are going to finance the new car it is better to arrange your financing outside before you walk into the dealership that way you can avoid all the scams that they pull with monthly payments, rates etc.
6) You may also want to look into trading the car in at CarMax.

Good luck!

Answer 2

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Answer 3

My brother was able to trade in a used SUV for a new minivan and walk out with a check for the difference.

The first step is to find the car that you want before you discuss anything else with the dealer. Once everything is set for the purchase for the car you want, you say, "Oh yeah, I have this other car ..." and explain the situation. If you reveal everything all at once, you won't be able to negotiate as low a price for the car you want.

Another way to do it is to sell your current car to a private party, use the profits to pay off the loan, and use the rest as a down payment on a new car.

Answer 4

If you trade, the dealer will pay off your old loan and apply the difference to the price of the new car. The difference might be positive, meaning you have money left over that will be applied as a down payment on the new car loan. Or if negative, you are upside down and will probably have to add cash to get the new car. Don't do anything until you've checked your credit score to see if you even have a chance at a new loan, even at a high interest rate. Then go a bank and get pre-approved for a loan. If you don't like the interest rate, either try at other banks or credit unions -- or walk away and keep the old car.

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Answer 5

i Believe you need to be more specif about your situation. I assume you are in a situation like this you owe 6000 on a vehicle that is Worth 12000. That being the case and if you want a cheeper car with a cheeper payment or no payment at all. Research what you are looking for go to Nada.com or kelly blue book and know what cars are worth exactly then you can goto dealer lots and check on the cars available and know there value. Also be sure to check the trade in value of your vehicle most likely this is all they will give you for your vehicle at best. KNOW what you want when you go in and do not let the salesman talk you into anything else know what you are willing to deal for and do not budge not even a dollar either they will make the deal or they won;t but be willing to walk away. Be upfront and rude if necessary. I am a ex car salesman I know a lot of the tricks and they will try to to get you to buy newer to extend the payment etc. Know what you want to pay know what you want for payment and how long you want to make payments.. And most of all good luck.

Answer 6

Dealers want to sell new cars but they also want to make money. Basically, you want to trade in one car and buy another. There are two transaction. The question is how do you get the most for your trade and get the best price for your new car with the least aggravation.

Here is what I would do.
1. Go to KBB.com and figure out a fair or target price for your existing car.
2. Go to the dealer and negotiate the best possible purchase price for your new car.
3. Only after the purchase price is agreed upon, see how much you will get for your trade if you give it to the dealer. If it is not close to what your target price is, sell your existing car privately.

Answer 7

If your car is worth that much more than you owe on it, sell it outright, spend a few dollars cleaning it up. The dealership will certainly "help" you, but they are in business to make money, put your vehicle in the paper and get what you can for it, The dealership will either farm your vehicle out or just give you the least amount they can talk you into taking, and then try to make you feel like they are doing you a favor.

Answer 8

trading financed car cheaper

Answer 9

Im in the EXACT same situation!
I havent gone as far as going to the dealership to see what they can do but i have been told by friends in the car business that dealerships are not interested in this too much. They generally are not interested in HELPING YOU so much as they are all about making money. You are "upside down"- means you owe more than what it is worth.....I suggest keep making payments and try to refinance if it is too expensive for you. I am trying to remedy my situation by paying a little extra each month.
Hope this helped a little!

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