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Getting rid of a car I owe money on.
Lankysean
Registered User regular
Registered User regular
So I have a car that I want to get rid of but I own money on it. If you care to read the details they are in the spoiler section. Am I limited to trading it in at a dealership for the car I want? Can you just sell a car to the dealership and pay off the remainder of the loan so I can go buy the car I want privately? If I do trade the car in for the new one the difference can just be rolled from one loan to the new loan right? Does that mess with the new interest rate or anything? Any advice would be awesome, thanks as always PAH/A.
My car's book value is between $20,000 and $23,000 depending on if you are looking at KBB, NADA, trade in, or private party. I own roughly $24,500 on it. I want to get rid of it for a bunch of reasons; it's expensive (almost $500 a month, 4.9%apr, gets shit mileage, expensive insurance, etc.) and it's unreliable (has electronic issues, stalls out occasionally, engine revs slightly for no reason in lower gears) and frankly it's just not "my type of car" which sounds silly but I really hate driving it and never should have gotten it in the first place. I'm looking at a 2009-2011 Nissan that can cost between $10,000 and $15,000 depending on year, mileage (under 40k), options installed and if I'm buying it private party or from a dealer.
Lankysean on
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It’s not a very important country most of the time
http://steamcommunity.com/id/mortious
If you do the trade-in route at a dealership, they will essentially just have you do extra financing to pay for the difference between the value of the car and the amount owed on the car
1) This is much easier if you do it at a dealership. Unless you know your stuff. It doesn't seem like you do.
2) You will probably not get book value unless you take it to a dealership of the same make.
3) You can roll negative equity into another car. It is possible, but there are limits. Fortunately it sounds like you've only got about 3-5 grand worth of negative equity. The problem is the cheaper car you try to get, the less you can roll into it. You can't get a 10 grand loan on a 5 grand car, you dig? Or a 25 grand loan on a 17k car, if it helps to paint the picture. Well you can, but you need impressive credit to do it.
4) Negative equity = higher interest rates. You've already got a decent rate anyway, if your credit has gotten better then maybe it will stay even or even go down. Frankly, every time I've traded in a car, regardless of how underwater I was, my interest rate went down. Usually with banks it's all about the value of the loan versus the value of a car. You can walk into a dealership with a 750 credit rating. If you try to buy a Fiesta with a 20k loan, 90% of banks will turn you down flat. And then one bank will jump on it and give you a 5% rate.
TL;DR: it is possible, very possible, but you will pay a price unless your credit is good/excellent, and there is a FLOOR on how cheap a car you can jump into. You need to buy enough car to absorb the blow of your trade.
we also talk about other random shit and clown upon each other
I have a 800+ credit score so I'm not so worried about that. Is there a way I can figure out what my floor would be without going to the dealership? If I can keep the price of the new car under $15,000 out the door I should be cutting my monthly payments by $125~$175 which would be nice.
Zepherin: I've brought it to the dealership any number of times, which costs me $125 deductible each time. Generally I bring it back and they fix one problem but start another. Last time the car wouldn't start they repaired it, which took almost a month, and when I asked them what happened they responded with "we don't know, we replace a bunch of parts and now it works"... brilliant. I plan on bringing it in again this weekend so it can be in the best possible shape before I trade it in. Honestly at this point even if they fixed the car 100% I wouldn't want it. I just don't trust it and it's costing me too much money.
Obviously trading it in at a dealership is much easier.
What I would do, depending on your income situation, is to pay off as much as possible on this current car to the point that you have positive equity so when you trade it in you're only making payments on the new car instead of the new car plus a nonexistent car.
Best financial solution - talk to your bank, get a personal loan for the shortfall lined up if neccessary, and sell the car yourself. Get a great rate on the new car loan and a less great rate on the personal loan if you can't cut a check for the balance. Pay the personal loan back asap if you get one.
As for selling your car, if you want easy there Carmax is where its at.
with an 800 score, -5k equity, and a 15k target vehicle, I'd say you have a very strong chance of being financed
even stronger if you can take about 1-2k of that repair money and put it as a down payment instead
Ask the finance guy if they work with Alphera (BMW auto financing). they did my last loan with a similar interest rate to what you are already paying, and I'm only in the mid-700's
we also talk about other random shit and clown upon each other
Thanks for all the help!