I want basic's.
2007-11-18 15:02:12 · 5 answers · asked by Gemini 1 in Cars & Transportation ➔ Buying & Selling
The dealership will appraise your current vehicle and determine it's trade in value. Once this is established, they will call your lender and ask for a 10 day payoff on your current loan. If you owe more than your payoff, the difference is added to the new vehicle in the form of negative equity and the dealership pays your old loan in full.
Example:
Current car is worth $12,000 and balance on loan is $13,500
The dealership will send a check for $13,500 to your lender and add $1,500 to your new vehicles loan.
That's how is works in a nutshell. If you have any other questions, fee free to email me through yahoo.
2007-11-21 04:42:36 · answer #1 · answered by The Auto Evaluator™ 7 · 3⤊ 0⤋
The dealer appraises your car and determines the value. He then confirms what you owe. They take the difference and that is what is called negative equity. Example, you owe 5,000, they say the car is worth 3,000, negative equity is 2,000. Sometimes the car being traded is worth more than what is left on the loan. The difference between the dealers trade in allowance and what is owed can be applied as a down payment. Any negative equity can be rolled into the loan on the new vehicle, depending on credit, amount being rolled over, and down payment.
A creative dealer can find ways to hide negative equity in the other numbers as long as it's not too much.
2007-11-18 23:16:32 · answer #2 · answered by jrhd97 3 · 0⤊ 0⤋
In a nutshell......EX..If you owe $5000 to a bank and your car is worth $5,000, you break even and just finance your new car.
However, if your car is only worth $3,000, you have to come up with the difference........Vice versa if your car is worth more than what you owe.
10 minutes at the dealer will give you the (usually) bad news.
2007-11-18 23:21:20 · answer #3 · answered by Carl R 4 · 0⤊ 0⤋
You have to roll it into the new loan. If you have a car you owe 22000 on but will only give you 10k for you will have to roll 12k into the new car, but the car has to have high retail value for the bank to loan on the new car your getting. Its called an LTV (loan to value)
2007-11-19 10:41:08 · answer #4 · answered by ♥Kempa♥ 4 · 0⤊ 0⤋
What you owe could be rolled into your new loan.
2007-11-18 23:10:24 · answer #5 · answered by hispanna 3 · 0⤊ 0⤋