Steps to trading in a car?

Question

I would like to trade in my car for a newer year. My balance is $4,592.51 and Kelly blue book estimates my trade in to be roughly $3000. The car I would like to get is $10,000 estimated.
*How would this work (Please be descriptive)?
* Would I have to start a new car insurance policy again with a large sum of money paid initally to start the policy?

Answer 1

When trading in an old car for another car, one can keep the same policy by adding the new car to that policy and removing the old car from it. By keeping the same policy number, you retain any discounts that you may be receiving based on number of years as a loyal customer. Depending on a variety of things that you do not mention, such as whether the old car has airbags, the insurance company will determine whether the premium with the new car is higher or lower than with the old car and either require you to pay the difference (if the new premium is higher) or refund the difference (if the new premium is lower). If the new premium is higher and they require you to pay the difference, they may allow you to pay in installments or they may require a lump sum. This depends on their policy and you will have to ask them.

Answer 2

Sounds like you are about $1600 upside-down on your trade.
Clean it up as sharp as you can get it, and then take it to several dealers to shop the car you want to get an estimate of what they would give you for a trade. You can get them to write up the deal for you w/o a trade and see what the difference it. OR, some people say they get better results going in w/o trade 1st and working the best deal they can and THEN introduce the trade to see what they will allow.

If you can get 2-3 car salesmen hungry to make a deal with you (particulary toward the end of the month if they haven't met their quota) you may be able to come out ok and at least break even.

If you can't get close, you will have to do one of two things. You can rollover the unpaid balance of the trade-in into the loan for the new vehicle. In other words, the $10K car will now cost you about $12K (and keep in mind that you have to figure in TT & L). You will either have to increase your monthly payments to pay that note off quicker, or you will end up even further upside down when you get ready to trade next time.

Other option, you can try to sell your car private party. You may get more for it by placing an ad and selling it yourself than you would for trade-in. What was Kelly Blue Book value for private sale? The only problem here is that you may be w/o a car for a bit if you can't afford to buy the new one w/o paying off the old one. Consignment lots can help you sell a car & you may get more in trade-in, but here again you have to leave the car on the lot to show it/sell it and if it is your only means of transportation and you can't afford to go ahead & get the new car & take a chance (paying both notes temporarily) or if you wouldn't qualify for financing this might not work.

In any case, all you have to do about insurance is to contact the agent who has your current auto policy. You can tell him/her what make/model vehicle you are looking at and they can estimate what your new premiums will be. Then, when you actually sign papers and trade the car in, you (or sometimes the car dealer) contacts the agent and gives them info with the new car's VIN # and they change it over.
If you did the private sale thing, you might have both cars on your policy for a period of time, which would of course increase your costs.

One of the best things you can do when you are car shopping is take someone with you for moral support (preferably a car-buying veteran). Use them to keep you from making a decision on a whim or letting a slick salesman talk you into a bad deal, and ask them for their advice. If this isn't possible, have somebody on speed dial on your cell phone to run things past. This little bit of protection will hopefully deter a car salesman who may be misleading you.

Also, DONT buy all that credit life and extended warranty stuff they will try to sell you with the car loan. It just jacks up the monthly payment and it is NOT worth it in most cases, no matter what they tell you!

Answer 3

You'd be far better off to sell the car outright, if you can. You'd probably get somewhere between low wholesale and high retail from a private buyer. The dealer will ONLY give you low wholesale on a trade.

As far as insurance goes, you will need to report the change in vehicles to the insurer, who may or may not send you an additional charge, based upon the type of vehicle you purchase.

Answer 4

You'd transfer the insurance on the old car, to the new car.

A dealer can help you out with the financing, but you're going to pay a high rate, because not only do you have no money down on this car, but you still owe on the old car.

If you total that new car in the first year you have it, the insurance isn't going to get you out of the loan - this is called being "upside down" - owing more on the car than it's worth.

Personally, I think it's a stupid financial move to do this. You're basically enslaving yourself to the finance company.

Answer 5

You said you just want a newer model but there's nothing wrong with your car, huh? The question you should ask yourself is 'would I rather be rich or look rich?' If you would rather look rich, why don't you just put the car on your credit card instead?

If somebody gives you blue book on your trade in, they are screwing you elsewhere, and you'll still be upside down on your car. What else would you buy for that much that you know ahead of time is going to loose value?

Answer 6

My advice to you would be to save around for the suitable value you may get on it. usually you get larger costs from private events yet some sellers like automobile Max are aggressive with their promises. Then as quickly as you have finished that, you could bypass forward and purchase the Ford Explorer.