ive had my car a little over a year but my finacial situateion isnt so great anymore so im struggling to make car payments. does anyone know if i can trade it in early to get something not so exspensive?
2007-07-15 10:53:04 · 3 answers · asked by AJIMEENA 1 in Cars & Transportation ➔ Buying & Selling
You can trade it in anytime you like but the problem with trading in a car this new is that, unless you put down a large down payment, you are probably "upside down" on the loan (your car's value is less than the amount remaining on your loan). This is especially true if you are trading in your car to a dealer, since they will give you much less than the retail value. Therefore, you would have "negative equity" in your car.
The dealer can usually roll over this additional debt into your next vehicle purchase, but that just means you may end up having to trade WAY down in order to significantly drop your monthly payments.
For example, say you currently owe $15k on your loan and $15k is also the retail value of your car, but the dealer will only give you $12k for it as a trade-in. That means you've got $3k debt that would have to be rolled into the loan of your next car. This means theoretically you could "trade down" from a $15k to a $12k car (retail value) and still be stuck with the same payment once the negative equity is added! So you'd be forced to trade down to a much cheaper car.
If you can't meet your monthly payments you may be forced to do this anyway, but my first suggestion would be to try to refinance your loan. Try to get a lower interest rate, or if that's not possible then try to stretch out your loan for another year or two (not something I'd normally recommend, but I still think it's preferable to trading it in for another car).
2007-07-15 11:17:31 · answer #1 · answered by nevergonnaletyoudown 4 · 0⤊ 0⤋
It depends on how much you still owe on it, and how much worth the car is. Because think about the trade equity.
For example, if you bought a car for 20,000, it might now only be worth 13,000, and if you want a car that cost 15,000 and you've taken a 5 year loan, then it probably isn't worth it...
Go and see the car you want, and ask someone in the financial department if your payments will go down.
I don't know if i'm much of help here, but good luck
2007-07-15 11:02:01 · answer #2 · answered by Anonymous · 0⤊ 0⤋
The only way that would work is if you traded it in on something worth less than what you owe.
2007-07-15 10:57:09 · answer #3 · answered by Anonymous · 0⤊ 0⤋