Rep Power: 0

Okay, here's the situation. I'm paying quite a bit of money on my car right now, and with a baby on the way, I'm trying to figure out a way to minimize my debts.

My question is this, if I trade in my car for another, how does the financing work out? I currently have a loan through a bank for my car, but if I trade in, I would get financing through the dealership (pretty good interest rate.) Now does the dealership take my civic, give me a value for it, and pay off my bank loan. Or do they transfer the balance to their financing dept., after of course giving me the value of my car?

Has anyone done this before? Any help would be appreciated. I don't want to go and ask about all this without some idea what I'm talking about, cause I don't want to sound like a complete loser.

 
Rep Power: 433

when i traded in. dealer paid off my old ex then i had go through dealers finance option, which was only 1.9%.basically. if dealer give you 13000 for your car. and new car costs 19000. you pay difference 6000.+ 19000=25000 then get new payment.with new financing percentage

for me. i paid 355 everymonth for my 02 ex with 8 percent interest. now im paying 342 with 1.9% interest.. for my 03 si

 
Rep Power: 0

What he said. I'm going through a similar process right now. The technical term/phrase that car dealerships use for what you are describing is "rolling over negative equity." It can be done. You might want to consider gap insurance, especially since 1)your trade-in value is significantly less than what you owe, and 2) the borrowed amount is significantly greater than the value of the new car.

 
Rep Power: 0

wouldnt it be bettr to just sell your car:?

 
Rep Power: 0

Try selling a Honda in this economy in an already saturated Honda market.

 
Rep Power: 0

Basically the dealer will give you a certain amount for your trade in. If it is less then what you owe the bank, you have to pay that difference. Either by paying the bank the difference or adding that difference to the price of the car you want to get.

 
Rep Power: 0

Okay. So if I figured things out properly, the value of my car, in current blue book value, is pretty much what I still owe the bank, give or take 500 or so. The difference is, the bank is charging about 7% interest, and the dealership is offering 0%.

hmmmmmmmmm..........
Thanks for the answers guys. I'm gonna have to check into this more.

 
Rep Power: 0

A trade-in works like this, you bend over and take it like a man. sorry to say it, but it sucks, you get raped. I've had many experiences with trade in's and you always get screwed over. My sister just traded in her '91 saab convertible for a 2002. they gave her $1650, we just saw it on the lot yesterday for 6 grand. thats just how it works. Id like to tell you to sell it on your own but with the economy being shitty you wont do too much better out there, but you may want to give it a swing.

 
Rep Power: 0

yeah with trade ins you get wholesale value not bluebook value

 
Rep Power: 308

Indeed. . . at most you'll get trade-in value according to what Edmunds says. No dealership uses KBB anymore.

 
Rep Power: 0

have them appraise your vehicle so you know how much they will give you

 
Rep Power: 0

I got $9000 for my 2001 LX. Saw it on the lot for 17K. You can get brand new EX for 15k, there's just no way. Also, at the time I just wrecked the LX and had it repaired but it had not yet made its way to the carfax report yet. I hope it did doing their ownership, evil bastards.

 
Rep Power: 317

If you're trading a car, always wait until you have a rock-bottom price on the new car first. That way you know exactly how much you're paying and how much you got for the old car.

Read this, it'll save you from making any rash decisions:
Edmunds 10 Steps to Buying a New Car...

I posted a long-winded bunch of tips in THIS THREAD awhile back that might help you. Look for my big post at the bottom.

 
Rep Power: 0

well...while this is all very good info...here is how a trade in works (in a nutshell):

1) Your car = Trade in value according to NADA (North American Dealers Association) Yellow Book - adjustments (paint dings, tire wear, dents, wear and tear). That value - what you owe = Trade

2) Dealer's Car = Edmunds Fair Market Value. If you pay sticker you are a sucker. Do your homework, know what you want and how much it is worth on today's market. This price will go up the more protection stuff you add during the financing portion of your car buying experience.

3) (Dealer's Car) - ((Trade) + (Down Payment)) = Amount Financed

Now the payments are going to vary with interest rate and term, but that can all be figured out with a Business Calculator. Finance guys HATE those. They can't just tell you.."Oh yeah, that'll be 1.9% at 48 months..$500 per month" You can call bullsh1te if you have the numbers in front of you. The more information you have...the better deal you are gonna get.

 
Rep Power: 398

I traded in my 2001 honda civic ex 5 speed coupe for $10,300 and the dealer paid of my loan of $7800. I then took the balance and put it toward the prizm. Its worth it to trade in your car because you dont have to go through the hassle of selling it, and you also save tax on your next purchase. I was paying $230 a month on the civic and I now have a 2001 chevy prizm lsi auto with 19k miles on it. I pay $130 a month.

 
Rep Power: 0

Well, for the car I am looking at, any money that I save on the payments per month, I will end up spending almost the equal amount on insurance. So I would end up no further ahead. I love my civic, and I don't want to sell it, and now that I see I wouldn't save much, I get to keep my car. YAYYYY!!

 
Rep Power: 317

Trust me...if you like the car...and can afford to keep it, KEEP IT!!
I traded my Prelude years ago to save money, and it's the biggest mistake I think I've ever made.

 
Rep Power: 0

good decision to keep the car