Lets say u buy a car last year. You had horrible credit and u had a huge intrest rate....ur credit got better and u didnt want to refinance..lets say i owed 20,000 and the car is worth 17,000, would the 3,000 be applied to the new car loan or would it disappear and be hidden in with the jacked up price of the new car....
2007-08-31 17:52:26 · 5 answers · asked by Anonymous in Cars & Transportation ➔ Buying & Selling
its an 07' Camry LE with 19,000 miles..i am not sure i will get $17k but that wuz lyk a guesstimate
2007-08-31 18:04:30 · update #1
also i am paying like 18% or 15% cuz of horrible credit....i am paying like 500 dollars a month which is a total ripoff...eitherways if i decided to sell it in a few years it would be even more of depreciation
2007-08-31 18:06:21 · update #2
The main problem with trading out of a car after only 1 year is that most of your monthly payments went to interest, not the principal balance. I have a graph, which I will give you a link to that shows if you have a 5 year loan, your payments will go mainly to pay your interest until you hit the midway point.
Some Banks and Lenders will actually go 120%
In your situation, if you purchase a new car, your negative equity will be added to your new loan, provided you have the income and credit to qualify for the loan. If you look at the graph, you will be able to see visually how a simple interest loan works. Good Luck and you can email for questions.
http://www.theautoevaluator.net/Resources.html
2007-09-01 03:09:34 · answer #1 · answered by The Auto Evaluator™ 7 · 4⤊ 0⤋
It will get added to the cost of the next car. You are in what is called an "upside down" position. Few banks or credit unions will finance you at greater than 100% of the value of the car you are getting. Are you sure you will get $17K from the dealer? You may hve to sell it yourself to get that much. Look at the Kelly Blue Book web site for trade in costs, resale value, and dealer sales price to understand what your car is really worth. Remember that the next car you get will drop thousands in value as soon as you buy it so it better be something you can live with this time. Otherwise, stick with what you have but make payments above the minimum so you get at least even. How long before you can raise the $3K difference? Refi might be the way to go if you can find someone to do it but I'm not very hopefully you can do that. I've seen people sell other stuff - we all have a lot of stuff nowadays - to get out of the situation you find yourself in. Good luck..
2007-08-31 18:03:33 · answer #2 · answered by Huba 6 · 0⤊ 0⤋
The dealer will give you a certain amount for your trade in. Then the amount you owe on it will be deducted from the trade in. Let's say they give you 15K for the car and you owe 17K. they will add the 2K on to your loan for the new car. Since your car is only a year old, and your credit is better, why not go to the bank and see about refinancing the car to get the lower payments? I don't know your situation, but it you have a home can you get a home equity loan? If you can then the interest will most likely be tax deductible. Do check with a CPA or tax advisor to be sure about this.
Since you are doing better with your credit, don't get in debt any deeper than you are now, is the best advice I can give you.
good luck.
2007-08-31 18:05:02 · answer #3 · answered by Fordman 7 · 0⤊ 0⤋
If you think that you are paying a higher repayment amount for your existing car loanyour monthly costs. Secondly, you may avail a competitive interest rate. Thirdly, you could be getting a flexible repayment period. Overall, you will be managing your loan a lot better.
2007-09-01 05:48:07 · answer #4 · answered by Anonymous · 0⤊ 0⤋
YES IT WOULD DISAPPEAR AND THEN REAPPEAR IN THE NEW VEHICLES PRICE.
2007-09-03 02:37:47 · answer #5 · answered by Anonymous · 0⤊ 0⤋