Is it true If you owe on a car and you want to trade it in, your payments will increase?

Answer 1

If its new then you will lose a ton of money on trade the car depreciates on a very steep curve for the first two years. but it should be paid of in five years or less right? If its an older car then the depreciation has levelled off and it depends how far into the payment you are.

Most of the first year of any 4 year loan is interest. you will have hardly made a dent in the purchase price. The car will now be worth at least 10 % less a year, and the dealer still needs to make at least 20 % profit so you might get half the price you paid. so if you owe less half of whatever the dealer offers you dont necessarily lose. but private sale gets you much more if you advertize in the AUTO TRADER or something like that .

Answer 2

That depends, they might go down but if they do the number of payments will go up. You will end up borrowing the trade difference for your new car plus the loan payoff amount for the old car. If you do this at least talk to the finance people about gap insurance, what that does is covers the differance between the amount you owe on the car and the book value in case it is totaled out. I have seen many people wreck their car and still have thousands of dollars in payments due because some slick car sales person got them upside down on their car loan, they don't care as long as they make a buck.

Answer 3

When you trade it in, you never will get full value, so the balance is added on to your new loan, thus causing higher payments, and you have now paid interest/tax twice on that car. Selling privately is far better, and easier on the pocket book.

Answer 4

Not necessarily but you won't get anywhere the best deal for the vehicle. You will be better off selling the vehicle yourself and paying off the note and using the balance for the down payment on the new vehicle.

Answer 5

it depends on if you get more for the car than what you owe, they just tack on the remaining balance after trade in allowance to you new purchase

Answer 6

Yes. You still owe money on your original car unless the dealer is willing to give you a big discount (Don't count on it!).

Answer 7

yes