@@Kryptic1046 so its kind of like I sell my car to dealership B with the help of their money so I can use the total money to buy a vehicle back at dealer A the one that gave me a check?
@@negotiationguides hey Ari I live in Massachusetts Haverhill Mass.. I have a 2019 Toyota Camry SE nightshade edition.. I leased it my lease is up in July I owe 15 g's and change on it I got a quote from CarMax they offered me $20,800 for it... So I got about five grand of positive equity, my question is I wanted to get in to like an affordable Lexus or even that Kia K5 GT... Even with putting four grand down it seems like my car payments are still going to skyrocket I only play two 10 a month for my 2019 Toyota Camry and they tried to rape me and make my payments 3:30 something and I talked them all the way down.... I just want to get into something a little sportier and more bells and whistles with three to four grand down and keep my payments in the 200s at least is this feasible?
@@benjaminbenson8914 just go to the dealer and ask. Or go directly to the bank or union and ask for the loan and negotiate the payments directly with them. Payments are based on your credit, the amount your asking for, and your history with debt and paying it. A down payment of a few grand isn't really going to make much of a difference.
No. Im in that position. Just got a car 4 months ago been in the shop 3 times. It’s still under warranty so it’s getting fixed and not quite hit my state’s requirements for lemon law. Meanwhile, the car has now severely depreciated and I have negative equity on a crap car.
@@tingtaijiyep I agree. I still have 10,000 and probably more due to interests but I've only had it for a year and I will have spend about 2,000 in repairs. I have a 2012 Chevy Cruze and I don't want it anymore lmao
@@icryglitter444I’m in the same boat man I’m stuck with this car and I’ll never pay it off anytime soon with all these repairs i have to fucking get done
Thank you so much. I am one of those people. I was screwed at a car dealership because I was uneducated and ignorant. I have already dished out thousands fixing this “new” car and something else that costs $3k to fix just messed up. I can’t do it anymore. I HAVE TO GET A NEW CAR. Thank you so much.
Just to simplify everything it all has to do with having a healthy down payment. In reality car dealers could really care less what you owe on the vehicle. The less you owe the better it is for you like anything under $8,000. Plus it also depending on the value of the vehicle, what you owe, and your credit and income all makes a difference in how much they'll ask for down. But there have been people who have traded in cars where they owe $20,000 but they paid 8,000 or more down on the new car. But if you owe $20,000 and say you only have $1,000 down the deal won't happen. And it doesn't matter how nice your $20,000 car is. It also has to do with the value of the vehicle you're trying to get. If you want a $10,000 car but you owe $20,000 on your current vehicle no bank will finance that because you'll be so upside down the price of your new vehicle will be way more than what it's actually worth.
I had a 2016 transit connect cargo that I owed 12,600 on it. It was broke down for a year and a half prior to getting it fixed. Engine wiring harness was bad. At 155k miles I felt it was a ticking time bomb. Oh yeah, paint was horrible and had two accidents on its record. They gave me 2700 for it and rolled about $10k onto new car, a 2024 Kia forte gt2. Now since it was a cargo van nobody would refinance me and my rate was 15%. The Kia is 6.7%. I feel like I came out ahead. My payment is $75 a month higher but I save that in gas going to and from work. And this car is dependable and sooo much nicer.
I have a 2016 ford edge sel that my wife and I are trying to trade in. We’ve been to several dealerships and none will finance the trade because of our high upside down balance of 5k, they want us to pay it off. Also dealership offered 15k for my car where as car max appraised it for 17. Definitely know your cars worth
Sounds exhausting going back and forward. It already takes for ever to get approved and get everything going. Specially when you don't have much free time.
Rebates, rebates, rebates. Look for a vehicle that has a lot of money in rebates and have a healthy down payment. A good interest too, and you'll come out pretty good.
What if your in positive equity, credit is good,never missed a payment and the vehicle you want is $7,800 but the balance of your current vehicle is $6,900 with a estimate of 20 months left?
Im very thankful for this video. Im someone who is im a position where I have no choice. Been stuck and lost on what to do and this helped a tone thank you.
So a trade in with positive equity is essentially a down payment or cutting the price of the new car by whatever the loan to equity ratio is on your trade in right ? Example trade in value is 18k and I only owe 14k. The dealership pays the loan for me and takes of 4k of the new car I’m buying ?
This is great for people that bought a car and the car appreciates in value. If it depreciates trading in a car is a waste of money and time. Trade in is a what of money especially, if you have negative equity.. I thought different lol. But I’m so glad your comment broke it down to make way more sense. I’d rather pay my loan off and run the miles up for 4+ years and then sell it and get all or at least more than half of my money worth.
@@tallkekepink95 makes a lot of sense. I’m in between right now I only owe 4000 left on my car that I bought brand new. I need a bigger car and was going to trade it in for a down payment . I’m So up and down
I work as a Fleet Auto Technician for a rental company (which I won't say at this point). Long story short, knew what I wanted to buy, also knew what cars had common issues, which ones to buy, and not to buy. Got my employee discount as well as an additional discount since the car was sitting at the lot for more than 2 months, yes I stalked the lot since the shop is next door 😆. As of today, I still owe roughly 7k on the loan. According to KBB, the trade in value is 13-15k. I do understand the lower resale value since it was a fleet vehicle, but I do not know how much lower it really will be. Is it still possible to get a good deal at this point? Should I consider refinancing, lowering the balance, etc?
@cj reyes Greetings, I am currently seeking to make a purchase of a new luxury sedan automobile. I would kindly request your guidance in determining the comparative merits of select vehicles, namely those of the Cadillac, BMW, Audi, and potentially the Mercedes-Benz. Specifically, I am interested in evaluating factors such as their liability, maintenance cost, and comfort amenities, among others.
I just feel like there is no way I’m getting a new lease or loan from the dealership without amazing credit . And getting a check from them to pay off the other loan to add it into a loan or lease that I can’t even get smhh😅
Is it possible to trade in a car that not only is not paid off BUT...is crashed and not repaired? Short story: Some asshole hit me and ran away...the police claims they were not able to find him even though there were like 12 cameras at walking distance from the crash. Called my insurance...turns out they canceled the policy just two days before for a credit card payment issue. I have negative equity of $4,600 and fixing the car would cost me about the same. I'd rather trade it in and get another vehicle. Is it possible to trade in the crashed car? Thanks
Thanks so much for this video it made so much sense and like you said I don't have a choice but I need a bigger vehicle. It'll be paid off in the same amount of time I hope thanks buddy!
My last Nissan was having transmission issues and I had to trade my car in quickly and ended up 8k under water. I am really wanting to trade my Nissan for a Camry, but I am iffy about the negative equity and the Nissan I bought definitely wasn’t worth what in financed it for
I just put 20k down on a new 24 Tacoma . I’m financing 25k. Say I want to trade in a year or so and I owe less than 20k on my loan. How would that work and would I get a good deal.
Toyota cars usually hold value well, assuming you got a good deal @45k for it new i.e discounts, rebates bringing your cost of the loan less than the value at the time of purchase I'd say you should have some positive equity. All depends on market value of the car in a year a so time.
So if I wanted to trade in a van. I owe $25,000 on. KBB trade in value is 23,000-25,000. Looking to trade in for a Tesla. Would I be better off trading in directly to Tesla or trying to get a full cash offer from kbb, vroom or another comapny to match what I owe?
This helped if the car lot DOESNT match your cars worth but what if they do?? Your car is worth 14k, you owe 18k, you trade it in for something 14k, would you still need a down payment for that or would the 18k just transfer over onto the new one that’s paid off so you’d only really owe what you did in the beginning?
Wow, I should’ve did that with my trade value. I’m still happy with my purchase, but if I would’ve known, I can ask the dealer to cut me a check and go pay off the little bit that I owe because honestly all I needed to do is wait one more month and I would’ve had all the money, but I didn’t want this specific Car to get taken off the lot, but this information was very very useful for in the future
Made an impulse buy for a Mazda miata. 1 year later I hate it because there is not space. Can’t even do grocery. I’m willing to own my mistake for taking in extra debt but need a more practical car that I can actually do groceries with.
Ok so i just say this video cuz im looking to trade my vehicle cuz im just not liking it. I only bought it 1 yr ago. The loan is 35k and was offered 28 through carmax but the car i want is at ford and they only offered 26k. So i go to ford and show them the other offer if they dont match it ask them for a check for the negitive balance then take that to carmax to pay it off and then go back to ford for the one i want? Im still a bit confused on how that works.
I have an Infiniti 2016 QX60 financed a few months ago, great condition and seeking to trade for a Mini cooper or Fiat. Any suggestions would be appreciated.😎
Okay dumb question … but what if this cars engine is messing up and I still owe 20k ? Is there a way to somehow get out of it ? Is there a way to somehow settle with a bank ?
The dealers still going to go thru the whole spiel signing you up with a loan with like 10 grand off because they’re gonna expect that you’re gonna give them the amount you get for your car from the other dealer. But it will make your payments. A hell of less than you got now, even with the three or $4000 check that give you, but they’re not gonna give you a $4000 check without signing you up for a new loan seeing if you’re approved first
I have a 2016 Honda CRV that I got in 2019 because at the time I needed another car. Old one was on its last leg. I'm still VERY upside down on it as I owe 23K on it. MY(notice I said "MY") dream car is a 2020 or 2021 Toyota Highlander. How good is resale value for used CRV's? Mine has about 42K miles on it. Is it even remotely possible to trade that in with such a huge balance remaining?
Hey Ari, I have a Kia Rio with a payout of 16.3k, my local Kia is offering me 12-13k trade in, (bought it for 12.6). My question is, if I want to trade it in for a K5, can I still shop around for my own auto loan rate or am I obligated to finance at the dealership since I’m doing a trade in considering I’ll have about 3k rolling over.
what if a person is leaving the country, my friend is, and does not need to buy a new car. Will in this case car dealership still pay the negative balance for you?
i got a car from enterprise i believe i was leasing to own something like that, ok so i got plowed into t-boned... isn't there a way i don't have to pay the remaining balance, but just a portion ? i was like halfway through my payments but isn't there a way i don't have to make payments anymore... like where i can just pay a portion of the 12,000 i owe?
I honestly don’t know if anybody will ever see this but here’s hoping. I have a car that I just got a year ago and currently I’m unhappy with its mpgs and my monthly payments. The car is worth around 5.5k and I owe 11k on the loan, the dealership that has the new car I’m interested in does not handle any kind of financing at all and I feel stumped as to what I can do. I want to avoid having to take out too much money or do multiple loans just to pay the car off and trade it in and then get another for the new car.
I have a nissan altima 2017 I want to trade it the dealer is asking me for 1000 deposit when the car has low mileqge.What should I do should I give 1000.
what if you owe 13k off a 20k loan and you want to get something a little older to save you money. Say you get something around 10k? Do you get the extra 3k down towards the 10k car you purchased?
It all depends on how much your current vehicle is valued. If your car is valued at 13k and you want something that's 10k then yes you'll have positive equity of 3k but if it's worth 9k then you'll be in negative equity
I’m wondering the same thing. Toyota is offering me $15k on my 2017 Corolla and I owe $4,776 left on it so it’s way higher than what I owe. I can’t figure out what happens the money I owe since it’s not negative equity?
My daughter couldn't wait to get a car so she went to Auto Now, $99 down, longer story rven shorter 2010 Mazada 3, no working ac, compressor had it barely 2 years, it had 121,000, $600 monthly, every 2 weels $30, she may still owe about $18,000, the car is going to breakdown before she fets to pay it off in another 2-3yrs, WHERE CAN SHE GO TO TRADE IT IN???
I don't know what to do. I have a car I've been paying on with a 11.99% interest rate. I bought it for 12,000 and after almost 2 years of paying 491 a month I still owe 11,400$! It has 142,000 miles on it and if I don't get rid of it now I'll be paying for it 10 years after it's broke down. I don't know a price range for a new car I should pick or anything. The kbb value of the car I have is only about 3-4,000... so if I go trying to trade my car in for a 20,000$ car and they give me 3,000 for the car I have I'll add like 8,000$ onto the 20,000$... I really don't want to mess up this time.😢
I have a vehicle I want to trade in I still owe 7300 on it but they only want to offer 5/6 grand for it so I’m in Negative Equity at the moment and every time I try and trade in my car they want a down payment is there anyway to trade in my vehicle and pay no down payment?
Okay so the dealership I bought my 2017 Hyundai Elantra GT called and ask if I would be interested in trading in, which I am. So according to KBB my car worth is 7809, so I’m concerned about the roll over amount. Will I end up paying more on a car note if I trade in for a newer vehicle that is more than my current vehicle value? Or would it be less if I look at something closer or less than my current cars value? I hope my question makes sense.
What happens if the requirements is 3 years they told you but ends up maybe 4 years to finish paying off ,can you get in trouble or they can take your car or at least they receive money still
I want to trade in my truck. I"m sure I can afford to pay the truck down to whatever the dealership/bank offers me for my truck. Should I do that and go into the new loan without being upside down?
I have a 2017 focus. They sell this car for 14k. My loan amount is 18k. The trade in value is at most 11k what sold I do next? I told the dealer that I needed a bigger vehicle before accepting the loan and they told me they will trade it in for me and now no one wants to respond or help me 😢
I’ve done this a few times and it can be in some instances. I was able to get $4K over trade value on a car. The dealer agreed to pay off my loan completely and I got out from under it with no negative equity
I have a 2015 Dodge Dart GT with like 84,000 miles on it the price I’m paying monthly I can get a newer and better car and pay the same I was thinking of a 2020 Toyota Camry TRD will that work I also just got it and august
I got a question. If I owe more then my car is worth, but I have the money to make the difference should I pay the bank or the dealer. Is there a difference?
Sell it privately (fb marketplace, online websites) and pay the bank the remainder payoff balance out of pocket… you’ll get more money from a private buyer than what a dealer would normally offer.
@@M0DFATH3R as soon as you pay off the loan the title will be released to the buyer. You have to make sure to pay off the balance first before taking this big step… may need to match up the end price with your own out of pocket money.
So I have a question I have a Honda Civic 2017 & want to trade it in for a Honda Accord 2018 their offering me 14k & I have a balance of 18000k would it be smart to make that trade?
I have a question so if my honda civic 2014 is owed a balance of 6200 and the dealership wants to value my trade in for 5500 can i pay the difference of whatever is remaining. ? Would they start a whole new financial 4 or 5 years with me again i want to trade in my 2014 for a 2017 for fewer kilometers. My civic stands at 222000 km
Greetings ,I live here in Texas, I Just started trading last week, I am a beginner I never believed I’ll make upto $18,000 in just 1 week from trading but when I met Mr Raini he guided me for free with his strategy and he guides me with the exact time frame to trade and now I just received my first withdrawals $18k in my bank account today I’m very happy I recommend you contact him.,he is very honest and trustworthy he will guide you to make consistent profits
Okay, so let me ask I got a GMC Sierra payoff of 50,000 (just got it about 5 months) I want to get a new one, which is valued at 58,000 at my local dealer. Does it mean that if the trade value is 39,000 would only owe 19k on the new vehicle?
I have a 2018 Honda Civic Kelly Blue book value says it’s worth $19,000. I got low balled for $17,000 from a dealership and $18,000 carfax I’m in negative equity my balance $22,000. I want to sell it without a trade in I will have to basically come up with the difference?
What if I am selling to CarMax with a current balance on the car loan that is behind with a settlement amount. CarMax offered me $3600. My settlement amount (to get the title and be satisfied) is $2087. The actual account balance though is 4k?
So you’re saying that instead of selling it with the dealer who you’re doing the deal with, you can say no I’m doing a deal somewhere else for more but can you write me a check for $30k to pay off the loans and you just roll it into my new car balance??? Instead of them putting the whole balance of what you owe on top of the new car? Please let me know I’m trying to trade two Porsches
What if I have 23 silverado not paid off but want to trade in for a 19 raptor we’ll say the pay off on silverado is 57 with 13k miles. Raptor 40k miles at 56 pay off, do I have a chance?? Anybody?
The huge loss people are talking about with buying new and driving it off the lot and instantly losing a lot of resale value is dependent on the vehicle. For example, I bought a fully loaded 2020 Subaru Ascent Touring in July of 2020 for 47,099 (not including taxes and fees), and I have my appraisal and will be selling this vehicle to CarMax tonight for $43,200 after 9 months of ownership and like I said I bought the car brand new.
@@firnameweren5311 Good for you. You happen to have an in demand model in a market that has very low inventory/ high demand for used vehicles. It's all about timing, how much you paid and your interest rate. You lose on processing fees and sales tax.
Okay so the way I always understood it was, let’s say I have a Kia optima worth 14k but I owe 18k, and I want to trade it in. So, I find a Chevy Malibu that cost 14k, I trade it in and essentially the 14k that my Kia was worth, is what I use to pay off the 14k Malibu, and then I only carry over the 18k that I owed in the beginning. Or maybe I’m wrong?
I'm trying to get rid of my 07 nissan murano for 2021 honda accord sport and I was pre-approved for the one I want. I have a loan that I took out with One Main Financial and my balance is $11,515.24. I know that they will add that balance on to my new loan if approved for what I want. Is it likely they will be able to get me into something.
Quick question I have a 21 altima which I only had a year. I owe 30k I been looking at 21 chargers but I know I’ll have negative equity from a previous trade prior to getting this 21 altima should I continue look at the 21 charger or look at something older like 2018 through 2020 and possibly like a bmw or maxima?
@@monkeys123lolHey this the best thought process ever seen since researching this lol. I felt the same way. That roll over loan amount is gonna be a monster unless the car is super cheap.
What if i want to consolidate my loan Into a more expensive car? As crazy as it sounds hear me out I did car rentals for 3 years but i now want to get out of the business I bought all my cars and 2 years ago and of course they have lost value and i still owe on them. I want to trade 3 of my cars for one decent car that i can just focus on paying for. But i know my 3 cars have negative equity. Lets say eg all my cars are 100k would it be better to get a $120k car so the loan can blanket the equity. Then i just focus on fincing 120k car. (My credit is not an issue). Will it be possible to do that?
This does. T explain how to take a car with negative equity directly to a Dealership though. I don't want to deal with appraisals from multiple places.
i’m trying to trade in my 2019 nissan with 103k miles for an older toyota/honda i still owe 15k after having it for a year the highest value i’ve seen for my car was 8.6k
@@stephensmith6727 well trading is pretty much out of the picture as i’ve gone around dealerships so unless i have an extra 5k to cough up i have no choice but to refinance, stick with the car, or make extra payments that are interest free
Ari, I need advice. I have a nice 2018 pick up truck was offered 32k as trade in but I’m still upside down 18k. Lost my old job due to covid and with my new one I can no longer afford my 1k monthly payment and I’d be comfortable more around 6-7 hundred. The car I’m interested in is brand new and has a msrp of 34k and sale price of 30k. My Credit is fine but I want to get out before I start falling behind on payments and Ruining my credit.. looks like it may be coming soon. Making principle payments , or saving on the side is nearly impossible. I’ve already cut back on a lot habitual expenses, eating out, junk etc.
Based upon Ari's knowledge passing in the video: I would get a pre-qualification for the car that you're looking to purchase. Ideally you can push the payments out to anywhere from 60 to 72 months with 0% interest. I would then sell the truck to the highest bidder (Carmax, some other dealer, whoever...) to payoff as much as you can on that loan. Then, I would ask the lender for your truck to refinance that remaining balance (18k or whatever it is) for a few years without a ridiculously high interest rate. This would reduce your monthly payment on the truck from 1k to something more reasonable, most likely between $250 and $300 per month. Assuming you can get a $30k new car loan at 0% interest for 72 months, that would bring your new car loan payment to around $417. Remember, if you want to achieve the *lowest* monthly payment while extending the duration of the loan, you *must* put as much down payment on the loan with the *highest* interest rate. If the new car dealer will give you a loan that will roll in your equity at really low interest (1.99 for 72 months, for example) it would still make sense to separate out the loans to get that 0% on the new car, unless you just want the convenience of a single loan payment. But, I always have auto-draft on my payments so I never think about it until it's done. A simple equation to look at regarding when you should take a negative equity carry-over into a new loan at whatever interest rate is: [(OldCarResidualLoanValue) / (OldCarResidualLoanValue + NewCarLoan)] = PercentOfLoanFromOldCar PercentOfLoanNewCar * NewCarInterestRate = Effective Interest Rate Proportional to Loan Ratio (If new car is 0% interest, effective interest rate is 0) PercentOfLoanFromOldCar * RefinanceTruckInterestRate = Effective Interest Rate Proportional to Loan Ratio Scenario1: If bank will refinance your truck carrying a balance of 18K with an interest rate at 3.49% for 72 months (About $277/month) and... If new car loan is 72 months at 30K with 0% interest (About $417/month). Scenario2: OR, New Car Dealer says they will pay off your truck AND finance your new car, but with an interest rate of 1.99% for 72 months, then you're probably better off keeping them separate as the payment would be $708, which is $14 more you're paying per month, at $168/yr, with $1008 over 6 years. Your example could be: (18000 / (18000 + 30000)) = 0.375 (Truck Loan Ratio) (1 - 0.375) * 0% = 0 (This is the New Car Loan Ratio * interest rate) 100 * 0.375 * 3.49% = 1.30875% That means if the new car dealer says they'll carry over your entire balance of your truck and they charge you an interest rate greater than 1.31% then you're better off keeping the loans separate. This is just a quick/dirty example, but it'll be much easier to navigate if you have a car payment calculator accessible to you when you start negotiating. I would probably call your lender and ask what rate they would refinance you at if you had a residual balance of 18k (or whatever the remaining balance would be to the highest bidder). It probably depends upon the duration of the loan as well. Obviously it's cheaper to pay off earlier unless they give you 0% interest. That way you have an idea of what your negative equity payment would be and it will help you navigate the second step, which is would it make sense to let the dealership cover your remaining loan if they're willing to do so. At least then you'll have all the numbers at your disposal and you can see if you're going to be taken for an extra $30, $40 or $50/month for however many years. I would probably look at a good CPO if any dealerships offer 0% on CPOs, as they're usually a bit cheaper than new, but that 0% helps a lot, unless the sales price on a pre-owned is much lower. Hope that helps. Good luck!
You are already hosed on a 50K car and now you want to buy a 30K one? Your best bet is to try and scrape together 10K, get a personal loan for 10K, and buy something under 10K. I make 100K a year and drive a 4K car because my finances were about messed up as yours. And I'm not going to end up back there again.
Good lawd. Who the heck gets into a truck for a $1K a month payment anyways? Unless you are make $250K annually, you have no business in that much vehicle. Then you state that you’d be more comfortable in a 6-7 hundred a month payment? Well, there’s your problem. You’re worried about falling behind on payments and you even considered buying a BRAND NEW car? Dude, you’re broke. Do you not get that? You’re sacrificing your financial future over a flipping car. I just bought a brand new Honda CR-V with an MSRP of $31K. Guess what- I used my PAID FOR 2104 Acura TL as trade in and wrote a check in full for the difference. I could do this because I’m not over my head in cars. If you don’t change your behavior with regards to cars, you’re pretty much doomed financially.
You lost me on the part about the $3000 check the dealer gives you. They’re are required to give you a check? I would just like a little more information to understand better
Can I trade in a Malibu that I owe $18,258 on? Loan was $24,500. Bought in march 23’. Would trade for truck around that price. Credit was 776 now it’s a 751. It’s possible?
Hello I have brand new Honda Accord 2022 with 3 k miles only ! unfortunately was involved in an accident ! Honda fixed the car paid by insurance. By now I owe 30 k on this car in payments ! Should I keep paying this car at least for an year more, and trade in for a lower price car ,or pay the total right now to avoid more depreciation ? Ps : I have ways to pay off the amount owed ! Reply
I currently own a 2020 Chevy Camaro that has a value of $27000. However, I still need to pay off $12800 for it. My intention is to trade it for a 2023 Cadillac CT5. Can you please advise me on what to do based on your experience?
I'm thinking about trading in my car in which I owe 30k for a car that's going for 36k should my cars trade value cover the difference to keep my payments around the same?
Hey hopefully you can give me a super quick answer, I’m trying to buy a manual Tacoma and trade in my 2022 Honda accord I still owe 28k on it but I could sell it myself for 30 maybe it’s only got 16k miles🤔
Vroom is offering me several thousand more than the dealership. Could I use that at the dealership to see if they will meet it?
Yes you can certainly ask for a match and if not a check to pay vroom any difference owed
@@Kryptic1046 so its kind of like I sell my car to dealership B with the help of their money so I can use the total money to buy a vehicle back at dealer A the one that gave me a check?
@@erikceniceros119 - Correct.
@@negotiationguides hey Ari I live in Massachusetts Haverhill Mass.. I have a 2019 Toyota Camry SE nightshade edition.. I leased it my lease is up in July I owe 15 g's and change on it I got a quote from CarMax they offered me $20,800 for it... So I got about five grand of positive equity, my question is I wanted to get in to like an affordable Lexus or even that Kia K5 GT... Even with putting four grand down it seems like my car payments are still going to skyrocket I only play two 10 a month for my 2019 Toyota Camry and they tried to rape me and make my payments 3:30 something and I talked them all the way down.... I just want to get into something a little sportier and more bells and whistles with three to four grand down and keep my payments in the 200s at least is this feasible?
@@benjaminbenson8914 just go to the dealer and ask. Or go directly to the bank or union and ask for the loan and negotiate the payments directly with them. Payments are based on your credit, the amount your asking for, and your history with debt and paying it. A down payment of a few grand isn't really going to make much of a difference.
I love that. “ some people don’t have a choice”
The accuracy is 100%
Yea they do. Don't trade your car in
No. Im in that position. Just got a car 4 months ago been in the shop 3 times. It’s still under warranty so it’s getting fixed and not quite hit my state’s requirements for lemon law. Meanwhile, the car has now severely depreciated and I have negative equity on a crap car.
@@tingtaijiyep I agree. I still have 10,000 and probably more due to interests but I've only had it for a year and I will have spend about 2,000 in repairs. I have a 2012 Chevy Cruze and I don't want it anymore lmao
@@icryglitter444I’m in the same boat man I’m stuck with this car and I’ll never pay it off anytime soon with all these repairs i have to fucking get done
Thank you so much. I am one of those people. I was screwed at a car dealership because I was uneducated and ignorant. I have already dished out thousands fixing this “new” car and something else that costs $3k to fix just messed up. I can’t do it anymore. I HAVE TO GET A NEW CAR.
Thank you so much.
Same here the dealership effed me uppp
Yea same here..I'm trying to get out of mine
Just to simplify everything it all has to do with having a healthy down payment. In reality car dealers could really care less what you owe on the vehicle. The less you owe the better it is for you like anything under $8,000. Plus it also depending on the value of the vehicle, what you owe, and your credit and income all makes a difference in how much they'll ask for down. But there have been people who have traded in cars where they owe $20,000 but they paid 8,000 or more down on the new car. But if you owe $20,000 and say you only have $1,000 down the deal won't happen. And it doesn't matter how nice your $20,000 car is. It also has to do with the value of the vehicle you're trying to get. If you want a $10,000 car but you owe $20,000 on your current vehicle no bank will finance that because you'll be so upside down the price of your new vehicle will be way more than what it's actually worth.
This is a bad example
Yup…just got a charger..had it for
About 2 yrs…wanted to trade for a challenger and they wanted 10k down
Great advice
@@Billyy.c_ - How is it a bad example?
Car dealership the biggest rip off
I had a 2016 transit connect cargo that I owed 12,600 on it. It was broke down for a year and a half prior to getting it fixed. Engine wiring harness was bad. At 155k miles I felt it was a ticking time bomb. Oh yeah, paint was horrible and had two accidents on its record.
They gave me 2700 for it and rolled about $10k onto new car, a 2024 Kia forte gt2. Now since it was a cargo van nobody would refinance me and my rate was 15%. The Kia is 6.7%. I feel like I came out ahead. My payment is $75 a month higher but I save that in gas going to and from work.
And this car is dependable and sooo much nicer.
This was the most helpful trading information on negative equity. I found so far online.!
This is really 100% well explained......this is how everyone should have done their content straight to the point ❤
I have a 2016 ford edge sel that my wife and I are trying to trade in. We’ve been to several dealerships and none will finance the trade because of our high upside down balance of 5k, they want us to pay it off. Also dealership offered 15k for my car where as car max appraised it for 17. Definitely know your cars worth
Thank you for this info.😊
Do they want you to pay the 5k upfront? I’m in the same situation but I’m only looking to sell
Sounds exhausting going back and forward. It already takes for ever to get approved and get everything going. Specially when you don't have much free time.
Rebates, rebates, rebates. Look for a vehicle that has a lot of money in rebates and have a healthy down payment. A good interest too, and you'll come out pretty good.
im going to use this advice... I'm going to turn my bmw into a porche through car max and idk the buyers yet but im On my way!.
Great information! And the bit at the end. Super necessary! Thank you for meeting people where they are in their current situation.
What if your in positive equity, credit is good,never missed a payment and the vehicle you want is $7,800 but the balance of your current vehicle is $6,900 with a estimate of 20 months left?
I got Stoneacre with a dodgy finance deal I'm at the point now where I can sell it add a little bit of money to get out of the trap.
Im very thankful for this video. Im someone who is im a position where I have no choice. Been stuck and lost on what to do and this helped a tone thank you.
To add to this I felt the same way as I’m at the bank trying to figure exactly that!!
Can you discuss the difference on the taxes difference on trading in an older car with a newer one and getting a tax credit ?
No tax credit. Sales tax is not refundable. You pay the sales tax rate in your state every time you purchase a vehicle.
What if I’m not upside down on the loan and I wanna trade it in to buy a cheap car in order to be debt free?
That's exactly what I'm thinking about doing I currently drive a 2018 Nissan Altima and I currently want to trade it in for a 2008 Buick Lacrosse
You positive equity will go to the new car for smaller monthly payment
Right now I got a 2020 SUV and I wanna downgrade at least to a 2016. This was a very impulsive purchase 😅
So a trade in with positive equity is essentially a down payment or cutting the price of the new car by whatever the loan to equity ratio is on your trade in right ? Example trade in value is 18k and I only owe 14k. The dealership pays the loan for me and takes of 4k of the new car I’m buying ?
essentially, yes.
This is great for people that bought a car and the car appreciates in value. If it depreciates trading in a car is a waste of money and time. Trade in is a what of money especially, if you have negative equity.. I thought different lol. But I’m so glad your comment broke it down to make way more sense. I’d rather pay my loan off and run the miles up for 4+ years and then sell it and get all or at least more than half of my money worth.
@@tallkekepink95 makes a lot of sense. I’m in between right now I only owe 4000 left on my car that I bought brand new. I need a bigger car and was going to trade it in for a down payment . I’m
So up and down
Very simple and concise explanation. Great job!
I work as a Fleet Auto Technician for a rental company (which I won't say at this point). Long story short, knew what I wanted to buy, also knew what cars had common issues, which ones to buy, and not to buy. Got my employee discount as well as an additional discount since the car was sitting at the lot for more than 2 months, yes I stalked the lot since the shop is next door 😆. As of today, I still owe roughly 7k on the loan. According to KBB, the trade in value is 13-15k. I do understand the lower resale value since it was a fleet vehicle, but I do not know how much lower it really will be. Is it still possible to get a good deal at this point? Should I consider refinancing, lowering the balance, etc?
@cj reyes Greetings, I am currently seeking to make a purchase of a new luxury sedan automobile. I would kindly request your guidance in determining the comparative merits of select vehicles, namely those of the Cadillac, BMW, Audi, and potentially the Mercedes-Benz. Specifically, I am interested in evaluating factors such as their liability, maintenance cost, and comfort amenities, among others.
Thank you for this valuable info. I have learned today.
I just feel like there is no way I’m getting a new lease or loan from the dealership without amazing credit . And getting a check from them to pay off the other loan to add it into a loan or lease that I can’t even get smhh😅
Is it possible to trade in a car that not only is not paid off BUT...is crashed and not repaired?
Short story: Some asshole hit me and ran away...the police claims they were not able to find him even though there were like 12 cameras at walking distance from the crash. Called my insurance...turns out they canceled the policy just two days before for a credit card payment issue. I have negative equity of $4,600 and fixing the car would cost me about the same.
I'd rather trade it in and get another vehicle. Is it possible to trade in the crashed car?
Thanks
Can you give us an update? Sounds like really bad timing with the insurance policy.
What did you end up doing?
What if I have missed payment on the car I wanna trade in and also haven't paid off yet???
Depends on the banks loan to market value
Thanks so much for this video it made so much sense and like you said I don't have a choice but I need a bigger vehicle. It'll be paid off in the same amount of time I hope thanks buddy!
My last Nissan was having transmission issues and I had to trade my car in quickly and ended up 8k under water. I am really wanting to trade my Nissan for a Camry, but I am iffy about the negative equity and the Nissan I bought definitely wasn’t worth what in financed it for
What year/model is the nissan
Very interested information to know
What did you end up doing?
What did you do I’m in this EXACT position down to the Nissan & the 8k I have to trade asap but I’m not sure which way is best
What the result what you did?
I just put 20k down on a new 24 Tacoma . I’m financing 25k. Say I want to trade in a year or so and I owe less than 20k on my loan. How would that work and would I get a good deal.
Toyota cars usually hold value well, assuming you got a good deal @45k for it new i.e discounts, rebates bringing your cost of the loan less than the value at the time of purchase I'd say you should have some positive equity. All depends on market value of the car in a year a so time.
So if I wanted to trade in a van. I owe $25,000 on. KBB trade in value is 23,000-25,000.
Looking to trade in for a Tesla.
Would I be better off trading in directly to Tesla or trying to get a full cash offer from kbb, vroom or another comapny to match what I owe?
This helped if the car lot DOESNT match your cars worth but what if they do??
Your car is worth 14k, you owe 18k, you trade it in for something 14k, would you still need a down payment for that or would the 18k just transfer over onto the new one that’s paid off so you’d only really owe what you did in the beginning?
Wow, I should’ve did that with my trade value. I’m still happy with my purchase, but if I would’ve known, I can ask the dealer to cut me a check and go pay off the little bit that I owe because honestly all I needed to do is wait one more month and I would’ve had all the money, but I didn’t want this specific Car to get taken off the lot, but this information was very very useful for in the future
Made an impulse buy for a Mazda miata. 1 year later I hate it because there is not space. Can’t even do grocery. I’m willing to own my mistake for taking in extra debt but need a more practical car that I can actually do groceries with.
is this still possible to do if you’ve co-signed and the co-signer has never made a payment/ doesn’t live in the same state as you anymore?
Ok so i just say this video cuz im looking to trade my vehicle cuz im just not liking it. I only bought it 1 yr ago. The loan is 35k and was offered 28 through carmax but the car i want is at ford and they only offered 26k. So i go to ford and show them the other offer if they dont match it ask them for a check for the negitive balance then take that to carmax to pay it off and then go back to ford for the one i want? Im still a bit confused on how that works.
Question, what if the if your car is worth 27 and you own to the bank 23 , and the car you want is 20, what happen?
I have an Infiniti 2016 QX60 financed a few months ago, great condition and seeking to trade for a Mini cooper or Fiat. Any suggestions would be appreciated.😎
So if I have a car loan I got for 10k can I trade it in for a car around 7k? Had the car for about 2 years
Would gap insurance cover that difference?
Okay dumb question … but what if this cars engine is messing up and I still owe 20k ? Is there a way to somehow get out of it ? Is there a way to somehow settle with a bank ?
The dealers still going to go thru the whole spiel signing you up with a loan with like 10 grand off because they’re gonna expect that you’re gonna give them the amount you get for your car from the other dealer. But it will make your payments. A hell of less than you got now, even with the three or $4000 check that give you, but they’re not gonna give you a $4000 check without signing you up for a new loan seeing if you’re approved first
I have a 2016 Honda CRV that I got in 2019 because at the time I needed another car. Old one was on its last leg. I'm still VERY upside down on it as I owe 23K on it. MY(notice I said "MY") dream car is a 2020 or 2021 Toyota Highlander. How good is resale value for used CRV's? Mine has about 42K miles on it. Is it even remotely possible to trade that in with such a huge balance remaining?
What did you do
I financed a 2014 qx80 in November but want to upgrade.
This mam just gave you all a lesson of what it's like trading your vehicle if you know you know
Hey Ari, I have a Kia Rio with a payout of 16.3k, my local Kia is offering me 12-13k trade in, (bought it for 12.6). My question is, if I want to trade it in for a K5, can I still shop around for my own auto loan rate or am I obligated to finance at the dealership since I’m doing a trade in considering I’ll have about 3k rolling over.
You can most certainly bring your own rate
@@negotiationguides thanks, just found you today. Earned my sub
Why would you buy another car and take a hit on the trade in? That’s ignorant. That’s why everyone in America is broke
Hello it’s been around 8 months since I financed a car for 36k new and now I want to trade it in for a car that’s 30k. Can I do that how will it work?
what if a person is leaving the country, my friend is, and does not need to buy a new car. Will in this case car dealership still pay the negative balance for you?
i got a car from enterprise i believe i was leasing to own something like that, ok so i got plowed into t-boned... isn't there a way i don't have to pay the remaining balance, but just a portion ? i was like halfway through my payments but isn't there a way i don't have to make payments anymore... like where i can just pay a portion of the 12,000 i owe?
I honestly don’t know if anybody will ever see this but here’s hoping. I have a car that I just got a year ago and currently I’m unhappy with its mpgs and my monthly payments. The car is worth around 5.5k and I owe 11k on the loan, the dealership that has the new car I’m interested in does not handle any kind of financing at all and I feel stumped as to what I can do. I want to avoid having to take out too much money or do multiple loans just to pay the car off and trade it in and then get another for the new car.
What did you end up doing?
I have a 2013 Tahoe and I have 9000 left on it how would I go about getting another vehicle that's maybe also around that 9000 dollars?
I have a nissan altima 2017 I want to trade it the dealer is asking me for 1000 deposit when the car has low mileqge.What should I do should I give 1000.
what if you owe 13k off a 20k loan and you want to get something a little older to save you money. Say you get something around 10k? Do you get the extra 3k down towards the 10k car you purchased?
It all depends on how much your current vehicle is valued. If your car is valued at 13k and you want something that's 10k then yes you'll have positive equity of 3k but if it's worth 9k then you'll be in negative equity
@@giobarajas3654people really buy cars and don’t understand depreciation?
What about when you have equity in the trade. Does the dealer cut you a check right there or do they mail you a check?
Either .. I’ve seen both
The equity can be used as your down payment.
@@kate60 - Sometimes, yes. Some lenders will still want a down payment regardless of your trade equity.
@@Kryptic1046 Correct
What you have positive equity? My car's KBB is worth almost twice what I owe. Does the extra go towards my new car as a down payment?
I’m wondering the same thing. Toyota is offering me $15k on my 2017 Corolla and I owe $4,776 left on it so it’s way higher than what I owe. I can’t figure out what happens the money I owe since it’s not negative equity?
My daughter couldn't wait to get a car so she went to Auto Now, $99 down, longer story rven shorter 2010 Mazada 3, no working ac, compressor had it barely 2 years, it had 121,000, $600 monthly, every 2 weels $30, she may still owe about $18,000, the car is going to breakdown before she fets to pay it off in another 2-3yrs, WHERE CAN SHE GO TO TRADE IT IN???
Wow it’s like you knew i had a 2015 accord and i owe 15000 on it😭
I don't know what to do. I have a car I've been paying on with a 11.99% interest rate. I bought it for 12,000 and after almost 2 years of paying 491 a month I still owe 11,400$! It has 142,000 miles on it and if I don't get rid of it now I'll be paying for it 10 years after it's broke down. I don't know a price range for a new car I should pick or anything. The kbb value of the car I have is only about 3-4,000... so if I go trying to trade my car in for a 20,000$ car and they give me 3,000 for the car I have I'll add like 8,000$ onto the 20,000$... I really don't want to mess up this time.😢
I have a vehicle I want to trade in I still owe 7300 on it but they only want to offer 5/6 grand for it so I’m in Negative Equity at the moment and every time I try and trade in my car they want a down payment is there anyway to trade in my vehicle and pay no down payment?
Wow, my dealer reach out to me about that and I wasn't sure if this were for real.
Definitely for real
Okay so the dealership I bought my 2017 Hyundai Elantra GT called and ask if I would be interested in trading in, which I am. So according to KBB my car worth is 7809, so I’m concerned about the roll over amount. Will I end up paying more on a car note if I trade in for a newer vehicle that is more than my current vehicle value? Or would it be less if I look at something closer or less than my current cars value? I hope my question makes sense.
You subtract how much your car is worth from how much you owe then add that sum onto your new loan
What happens if the requirements is 3 years they told you but ends up maybe 4 years to finish paying off ,can you get in trouble or they can take your car or at least they receive money still
Ok so question? Am im going to get the check from the third party to give to the dealership
Ok got it , so the current dealer will rolled in the remaining balance however if we shop around that balance could be less .. ??
I want to trade in my truck. I"m sure I can afford to pay the truck down to whatever the dealership/bank offers me for my truck. Should I do that and go into the new loan without being upside down?
What if the engine is bad wat to do????
I have a 2017 focus. They sell this car for 14k. My loan amount is 18k. The trade in value is at most 11k what sold I do next? I told the dealer that I needed a bigger vehicle before accepting the loan and they told me they will trade it in for me and now no one wants to respond or help me 😢
Pay your car off ... trading under negative equity is not a strong negotiating position to be in.
I’ve done this a few times and it can be in some instances. I was able to get $4K over trade value on a car. The dealer agreed to pay off my loan completely and I got out from under it with no negative equity
@@1LElife omg that’s amazing! I hope that happens for me. May I ask now much you were upside down?
@@MsMalina24damn he never answered lol
@@cesar-lf1jwright Lmao 🤣 smh 🤦♀️
I have a 2015 Dodge Dart GT with like 84,000 miles on it the price I’m paying monthly I can get a newer and better car and pay the same I was thinking of a 2020 Toyota Camry TRD will that work I also just got it and august
I got a question. If I owe more then my car is worth, but I have the money to make the difference should I pay the bank or the dealer. Is there a difference?
Use that amount as a down payment
Sell it privately (fb marketplace, online websites) and pay the bank the remainder payoff balance out of pocket… you’ll get more money from a private buyer than what a dealer would normally offer.
@@byroncortezmusic1327 what about the title ?
@@M0DFATH3R as soon as you pay off the loan the title will be released to the buyer. You have to make sure to pay off the balance first before taking this big step… may need to match up the end price with your own out of pocket money.
If I owe 33 thousand but trade in for a 26 thousand dollar car do I just pay the difference of 7-8k?
So I have a question I have a Honda Civic 2017 & want to trade it in for a Honda Accord 2018 their offering me 14k & I have a balance of 18000k would it be smart to make that trade?
If that's what you want make it happen but shop around for a better deal
I have a question so if my honda civic 2014 is owed a balance of 6200 and the dealership wants to value my trade in for 5500 can i pay the difference of whatever is remaining. ? Would they start a whole new financial 4 or 5 years with me again i want to trade in my 2014 for a 2017 for fewer kilometers. My civic stands at 222000 km
Greetings ,I live here in Texas, I Just started trading last week, I am a beginner I never believed I’ll make upto $18,000 in just 1 week from trading but when I met Mr Raini he guided me for free with his strategy and he guides me with the exact time frame to trade and now I just received my first withdrawals $18k in my bank account today I’m very happy I recommend you contact him.,he is very honest and trustworthy he will guide you to make consistent profits
Rainititan@gmail.com)
Okay, so let me ask
I got a GMC Sierra payoff of 50,000 (just got it about 5 months)
I want to get a new one, which is valued at 58,000 at my local dealer.
Does it mean that if the trade value is 39,000 would only owe 19k on the new vehicle?
yes
I have a 2018 Honda Civic Kelly Blue book value says it’s worth $19,000. I got low balled for $17,000 from a dealership and $18,000 carfax I’m in negative equity my balance $22,000. I want to sell it without a trade in I will have to basically come up with the difference?
What if I am selling to CarMax with a current balance on the car loan that is behind with a settlement amount. CarMax offered me $3600. My settlement amount (to get the title and be satisfied) is $2087. The actual account balance though is 4k?
So you’re saying that instead of selling it with the dealer who you’re doing the deal with, you can say no I’m doing a deal somewhere else for more but can you write me a check for $30k to pay off the loans and you just roll it into my new car balance??? Instead of them putting the whole balance of what you owe on top of the new car? Please let me know I’m trying to trade two Porsches
What if I have 23 silverado not paid off but want to trade in for a 19 raptor we’ll say the pay off on silverado is 57 with 13k miles. Raptor 40k miles at 56 pay off, do I have a chance?? Anybody?
what should you do if you don't like a car that you just bought new?
Sorry to hear that. If you trade now you will take a big loss 20% or more plus your taxes and fees.
Lord, why didn’t you rent it first? Turo etc... your going to take a huge loss
@@justshady honestly that is some good advice.
The huge loss people are talking about with buying new and driving it off the lot and instantly losing a lot of resale value is dependent on the vehicle.
For example, I bought a fully loaded 2020 Subaru Ascent Touring in July of 2020 for 47,099 (not including taxes and fees), and I have my appraisal and will be selling this vehicle to CarMax tonight for $43,200 after 9 months of ownership and like I said I bought the car brand new.
@@firnameweren5311 Good for you. You happen to have an in demand model in a market that has very low inventory/ high demand for used vehicles. It's all about timing, how much you paid and your interest rate. You lose on processing fees and sales tax.
what if you’re trading with a private dealer? such as a car on the street for sale owned by that person while still owing money on your car
Okay so the way I always understood it was, let’s say I have a Kia optima worth 14k but I owe 18k, and I want to trade it in. So, I find a Chevy Malibu that cost 14k, I trade it in and essentially the 14k that my Kia was worth, is what I use to pay off the 14k Malibu, and then I only carry over the 18k that I owed in the beginning. Or maybe I’m wrong?
AWSOME INFO!! Thank you.
I'm trying to get rid of my 07 nissan murano for 2021 honda accord sport and I was pre-approved for the one I want. I have a loan that I took out with One Main Financial and my balance is $11,515.24. I know that they will add that balance on to my new loan if approved for what I want. Is it likely they will be able to get me into something.
I’m in the same boat with 2013 but I owe 10k n I’m tryin to get a 2019 but my credit is good
Quick question I have a 21 altima which I only had a year. I owe 30k I been looking at 21 chargers but I know I’ll have negative equity from a previous trade prior to getting this 21 altima should I continue look at the 21 charger or look at something older like 2018 through 2020 and possibly like a bmw or maxima?
You should get a 5k used car, save money, and stop trying to flex
@@monkeys123lolHey this the best thought process ever seen since researching this lol. I felt the same way. That roll over loan amount is gonna be a monster unless the car is super cheap.
you had the altima for 1 year and still owed 30k ??? how ??
@@Brian-nn1tf it was 35k when i got it i traded another car before I got the 21 Altima.
What if i want to consolidate my loan Into a more expensive car?
As crazy as it sounds hear me out
I did car rentals for 3 years but i now want to get out of the business I bought all my cars and 2 years ago and of course they have lost value and i still owe on them. I want to trade 3 of my cars for one decent car that i can just focus on paying for. But i know my 3 cars have negative equity. Lets say eg all my cars are 100k would it be better to get a $120k car so the loan can blanket the equity. Then i just focus on fincing 120k car. (My credit is not an issue).
Will it be possible to do that?
Hi quick question. Does it hurt your credit score? If you trade in your loan car for another car that you have to get another loan for?
No
I trade a 2018 dodge ram for a 2022 chev silverado so I still owe 15 k from the ram so now the total is 85 k
now I not sure it was a good deal
I have a 2015 Chevy Malibu I paid 5k on it already the car is worth 10k but I want a dodge challenger 2012-2022 is it possible for me to get it still
This does. T explain how to take a car with negative equity directly to a Dealership though. I don't want to deal with appraisals from multiple places.
Can I trade in my vehicle with another vehicle with the same loan amount?
i’m trying to trade in my 2019 nissan with 103k miles for an older toyota/honda i still owe 15k after having it for a year the highest value i’ve seen for my car was 8.6k
Similar issue here.. 😣
@@stephensmith6727 well trading is pretty much out of the picture as i’ve gone around dealerships so unless i have an extra 5k to cough up i have no choice but to refinance, stick with the car, or make extra payments that are interest free
Is it debt if you’re car is running out of time? Or you got sold a car that is easily turning into a lemon
Ari, I need advice. I have a nice 2018 pick up truck was offered 32k as trade in but I’m still upside down 18k. Lost my old job due to covid and with my new one I can no longer afford my 1k monthly payment and I’d be comfortable more around 6-7 hundred. The car I’m interested in is brand new and has a msrp of 34k and sale price of 30k. My Credit is fine but I want to get out before I start falling behind on payments and Ruining my credit.. looks like it may be coming soon. Making principle payments , or saving on the side is nearly impossible. I’ve already cut back on a lot habitual expenses, eating out, junk etc.
Based upon Ari's knowledge passing in the video:
I would get a pre-qualification for the car that you're looking to purchase. Ideally you can push the payments out to anywhere from 60 to 72 months with 0% interest. I would then sell the truck to the highest bidder (Carmax, some other dealer, whoever...) to payoff as much as you can on that loan. Then, I would ask the lender for your truck to refinance that remaining balance (18k or whatever it is) for a few years without a ridiculously high interest rate. This would reduce your monthly payment on the truck from 1k to something more reasonable, most likely between $250 and $300 per month. Assuming you can get a $30k new car loan at 0% interest for 72 months, that would bring your new car loan payment to around $417. Remember, if you want to achieve the *lowest* monthly payment while extending the duration of the loan, you *must* put as much down payment on the loan with the *highest* interest rate. If the new car dealer will give you a loan that will roll in your equity at really low interest (1.99 for 72 months, for example) it would still make sense to separate out the loans to get that 0% on the new car, unless you just want the convenience of a single loan payment. But, I always have auto-draft on my payments so I never think about it until it's done. A simple equation to look at regarding when you should take a negative equity carry-over into a new loan at whatever interest rate is:
[(OldCarResidualLoanValue) / (OldCarResidualLoanValue + NewCarLoan)] = PercentOfLoanFromOldCar
PercentOfLoanNewCar * NewCarInterestRate = Effective Interest Rate Proportional to Loan Ratio (If new car is 0% interest, effective interest rate is 0)
PercentOfLoanFromOldCar * RefinanceTruckInterestRate = Effective Interest Rate Proportional to Loan Ratio
Scenario1:
If bank will refinance your truck carrying a balance of 18K with an interest rate at 3.49% for 72 months (About $277/month) and...
If new car loan is 72 months at 30K with 0% interest (About $417/month).
Scenario2:
OR, New Car Dealer says they will pay off your truck AND finance your new car, but with an interest rate of 1.99% for 72 months, then you're probably better off keeping them separate as the payment would be $708, which is $14 more you're paying per month, at $168/yr, with $1008 over 6 years.
Your example could be:
(18000 / (18000 + 30000)) = 0.375 (Truck Loan Ratio)
(1 - 0.375) * 0% = 0 (This is the New Car Loan Ratio * interest rate)
100 * 0.375 * 3.49% = 1.30875%
That means if the new car dealer says they'll carry over your entire balance of your truck and they charge you an interest rate greater than 1.31% then you're better off keeping the loans separate.
This is just a quick/dirty example, but it'll be much easier to navigate if you have a car payment calculator accessible to you when you start negotiating. I would probably call your lender and ask what rate they would refinance you at if you had a residual balance of 18k (or whatever the remaining balance would be to the highest bidder). It probably depends upon the duration of the loan as well. Obviously it's cheaper to pay off earlier unless they give you 0% interest. That way you have an idea of what your negative equity payment would be and it will help you navigate the second step, which is would it make sense to let the dealership cover your remaining loan if they're willing to do so. At least then you'll have all the numbers at your disposal and you can see if you're going to be taken for an extra $30, $40 or $50/month for however many years.
I would probably look at a good CPO if any dealerships offer 0% on CPOs, as they're usually a bit cheaper than new, but that 0% helps a lot, unless the sales price on a pre-owned is much lower.
Hope that helps.
Good luck!
I'm im the same boat
You are already hosed on a 50K car and now you want to buy a 30K one? Your best bet is to try and scrape together 10K, get a personal loan for 10K, and buy something under 10K. I make 100K a year and drive a 4K car because my finances were about messed up as yours. And I'm not going to end up back there again.
Good lawd. Who the heck gets into a truck for a $1K a month payment anyways? Unless you are make $250K annually, you have no business in that much vehicle. Then you state that you’d be more comfortable in a 6-7 hundred a month payment? Well, there’s your problem. You’re worried about falling behind on payments and you even considered buying a BRAND NEW car? Dude, you’re broke. Do you not get that? You’re sacrificing your financial future over a flipping car. I just bought a brand new Honda CR-V with an MSRP of $31K. Guess what- I used my PAID FOR 2104 Acura TL as trade in and wrote a check in full for the difference. I could do this because I’m not over my head in cars. If you don’t change your behavior with regards to cars, you’re pretty much doomed financially.
@@aeromedical6750 you’re not helping. He asked for help not judgment after the fact.
You lost me on the part about the $3000 check the dealer gives you. They’re are required to give you a check? I would just like a little more information to understand better
Can I trade in a Malibu that I owe $18,258 on? Loan was $24,500. Bought in march 23’. Would trade for truck around that price. Credit was 776 now it’s a 751. It’s possible?
Hello I have brand new Honda Accord 2022 with 3 k miles only ! unfortunately was involved in an accident ! Honda fixed the car paid by insurance. By now I owe 30 k on this car in payments ! Should I keep paying this car at least for an year more, and trade in for a lower price car ,or pay the total right now to avoid more depreciation ? Ps : I have ways to pay off the amount owed !
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I currently own a 2020 Chevy Camaro that has a value of $27000. However, I still need to pay off $12800 for it. My intention is to trade it for a 2023 Cadillac CT5. Can you please advise me on what to do based on your experience?
I have a 20 Camaro SS and I'm ready to trade in mine too 😩
@@LovelyBriMay k ask why? What’s wrong with Camaros ???
I'm thinking about trading in my car in which I owe 30k for a car that's going for 36k should my cars trade value cover the difference to keep my payments around the same?
Thanks to *patriciawillams0* she funded me so I could use to pay my loan. I’m so grateful for the job she did for me, she is the best.
Hey hopefully you can give me a super quick answer, I’m trying to buy a manual Tacoma and trade in my 2022 Honda accord I still owe 28k on it but I could sell it myself for 30 maybe it’s only got 16k miles🤔
So if I still owe money on the car and it’s not running it need repair, will it most likely be able to trade in or no?
How to trade my new 2020 for a new 2021 same car Nissan Maximum SR
Love you and your info ❤