I would like to trade in my 2005 Dodge Dakota SLT for the 2007 Dodge Charger or Magnum SXT. Problem is my loan payment is at 19500 payoff and the value is already at 13100 tops. I am afraid if I wait too long its value may be unrecoverable. Any help here would be prime.
2007-05-28 15:37:23 · 6 answers · asked by Rocket-D 2 in Cars & Transportation ➔ Buying & Selling
If you're upside down on your loan right now, that's just more reason NOT to trade-in your car and take that big hit. You've already gone through the biggest depreciation hit, which takes place the first couple years.
From this point onwards your "negative equity" should go down. Just think -- sooner or later the car WILL be paid off, at which point you are in the clear. Trading it in for a new car will just push that day out even farther. Plus, you will suffer through tremendous depreciation on a new Charger the same you did on your Dakota. I
In other words, trading in your car now will make your "upside down" loan even worse, not better.
2007-05-28 16:01:01 · answer #1 · answered by nevergonnaletyoudown 4 · 1⤊ 0⤋
This is not a good idea, because a dealer will roll over your negative equity into your new loan and you'll be even worse upside down in the new car. This is just a very bad cycle to get into because at some point you'll find yourself helpless to get out.
Furthermore, being upside down is not a good situtation to be in anyway. If you have an accident and your car is totaled, or the car is stolen, your insurance will only pay you the current market value of the car, not what you owe on your loan.
This means you'll have to come up with serious CASH to pay off the loan on a car you no longer have. For your Dakota, if you totaled it tomorrow, you would owe $6400 plus your deductible AFTER your insurance pays off. If you buy the new car and get more upside down, this gets much worse.
How about just hanging with the Dakota until you get closer to the end of the loan so that you won't be upside down? It makes things a lot simpler.
2007-05-28 22:58:11 · answer #2 · answered by Anonymous · 1⤊ 0⤋
Well I would not trade the Dakota in if thats what you are thinking of doing. If you can sell it personally you can probably get $15-16,000 depending exactly on what model and options you have. Then hopefully you have the cash to just pay the remainder of the loan off. If you trade in the dakota on a new car and create a "roll over" onto the new car loan.. you're gonna be in the exact position you are in now. Your gonna own a 07 car that because you rolled over $5600 you now owe like $35,000 on a car that you could only sell for $23,000 the second you drive it off the dealer lot.
2007-05-29 01:26:50 · answer #3 · answered by cc_det 1 · 0⤊ 0⤋
I would keep the Dakota for a bit longer. The problem is that after two years, the value of trucks depreciate much faster than a straight line like your loan is. Loans assume a constant amount of depreciation over the course of the agreement. In reality, the value declines more steeply at the beginning than at the end. Eventually it will catch up, but it won't be for a couple of years. If it's worth 6k to you go for it, but I'd advise against just building a giant tower of debt because you want a new car every two years.
2007-05-29 09:09:36 · answer #4 · answered by Jay P 7 · 0⤊ 0⤋
You need to keep the Dakota, why enter in to the new contract upside down also, and for a substantial amount. It's value has already been lost and unrecoverable, if sold privately, you could not sell the car to any person knowledgeable about cars, not that far off market value.
2007-05-29 01:21:28 · answer #5 · answered by fisherwoman 6 · 0⤊ 0⤋
Sorry to say but my cars the same way not to much you can do but wait in time it will go back up but it may take years sad to say that all there is to do
2007-05-28 22:46:58 · answer #6 · answered by Anonymous · 0⤊ 0⤋