My car is finance for much more than its worth, will a car dealer take it in trade without killing me on a dow

Answer 1

You mean you owe more than your car is worth? First, sell it privately because even if you price it below market value you will get way more money for it.

Second, if you finance through a dealer, they will only be too happy to finance what you already owe on your existing car, but it will be at high interest and you will wind up paying way more in the end.

Unless your car is a complete piece of junk, keep it at least until you have the loan payed off. Then think if you want to get a high interest loan for something that is constantly losing value.

Cars are a very poor investment.

Answer 2

Ok, it sounds like you are upside down on the car. You owe more than it is worth. What a dealership would do is to take the trade and apply the amount you are upsidedown by to the new deal. Lets say the car was worth $500 and you owed $750 and were buying a car worth $2000. The dealer would take the trade and apply the $250 difference to the financing of the new car meaning your financing will be $2250 for a $2000 car. You will drive that car off of the lot and its value will immediately drop. You will be upsidedown right off the bat.

What can you do? Keep your car longer. The rate that the value of the car drop slows down over time while the rate you are paying on the car should remain constant. Meaning that you will not always be upsidedown on the car. If you keep up payments, then at some point you should owe less than the car is worth. Trade in at that point. It would be helpful if you could save up money to help with the down payment as well. Do whatever you can to avoid being upsidedown on a car.

Answer 3

You owe more than the car is worth, it's called being "upside down". Lots of people are in the same situation. If a dealer takes it in trade and agrees to pay off the balance of the loan, that amount is added to the loan for the new car. Example: you owe (we'll use nice round numbers here) $15,000 and the trade-in value is $10,000. So the dealer takes your car as a trade in and pays XYZ Finance $5,000. The new car you're buying is $18,000, so therefore $18,000 + $5,000 = $23,000 which is how much your new loan is. But guess what? You're upside down again, because you now owe $23,000 on a car worth $18,000 brand new. And that's not all - the minute you drive that new, $18,000 car off the lot, it's now a used car, worth maybe $15,000. You now have a difference of $8,000 between the actual value and the amount you owe. It's a never ending cycle. If you do this, you'd better purchase "gap insurance" which covers the difference between the value of the car and the amount of the loan if the car gets totalled or stolen, otherwise you're liable for the difference.

Answer 4

all depends on your personal credit typically banks will allow a dealer to finance 125% of nada retail book value with a tier 2 score or higher (670) so what you need to do is investigate retail book of the vehicle you choose and make sure you can get out the door at less than 125% of its value and remember uncle sam gets sales tax out of that too. what ever isn't covered you will probably have to put down.