How do car trade ins work?
If I’ve had my vehicle for a year and a half, and still owe money on my loan. How can I trade in my car? I’ve never done it before but just curious as we need something a bit more spacious
- River EuphratesLv 76 months agoFavorite Answer
You take the vehicle you are planning on trading with you to a dealership, select the car you want to buy, and they will go about trying to give you as little for the old vehicle as possible.
Their first attempt will be to tell you they will 'pay off the old loan', but will actually try to roll that 'payout' into the cost of the new vehicle.
If you try to convince them to give you more for it, they will start to balk about the condition of the old vehicle, and cry about things like 'how much it will cost to put new tires on it' (even if the old tires are nearly new), etc.
Next, they will attempt to negotiate a car payment - this is a trick. Negotiate the *sales price* of the vehicle, and only then worry about payment/interest rates.
Car salesmen are not your friend, they only exist to sell cars to people for as much as possible, putting as much money in their pocket as they can. They can sense if you are a sucker, are uncomfortable/inexperienced with making large purchases, and will take you for a ride if you let them.
- ANDRE LLv 76 months ago
Wow, you are utterly clueless. You really should not have a car, since you clearly know nothing about handling such matters.
It works like this: If you owe MORE money on the current car loan than the wholesale trade in value of the car is, you can't, unless you pony up money from YOUR pocket to cover that difference. So, if your car is worth as a trade in, say, $10,000, but you still owe $12,000, YOU would have to PAY $2,000 just to be rid of your current car.
The fact that you don't say, likely because you don't KNOW, the current trade in value of your car, and what your current loan balance, further suggests that you are clueless about such matters, and should just stick to riding the bus, where someone qualified will make the decisions for you.
- 6 months ago
When the amount you owe on the car is less than the trade-in value, the process is pretty straightforward. Say you still owe $5,000 on a car, and a dealer offers you $6,000 for it as a trade-in. The dealer pays off the $5,000 loan for you, which releases the lien. Then, you transfer ownership of the car to the dealer.
- thebax2006Lv 76 months ago
Just go to the dealer and I'm sure they will fix everything you need to do so that they sell you a new car.
- How do you think about the answers? You can sign in to vote the answer.
- GabeLv 66 months ago
It is not a question of how but a question of why young grasshopper.
- AlCaponeLv 76 months ago
If you are upside down on your old loan, you probably are not in a position to trade -- because that loan has to be paid off in full as part of the trade process.
- regeruggedLv 76 months ago
Decide what you want to buy. Find out your trade in value. See if you can afford to borrow money to pay for the new vehicle and pay any additional payments if you are upside down on your loan.
- R KLv 76 months ago
they have to give you enough money on the trade in to pay off the existing loan. any money above that would be used as a down payment for the new car.
- NeverLv 76 months ago
You lose a ton of value whenever you trade because of the large wholesale to retail spread. Therefore, most people should never trade cars. (setting aside the fact that you may be unable to)
- I Like StoriesLv 76 months ago
If you still owe money on the current car you can either pay it off before you trade it or roll the balance owed into the new car loan.
I HIGHLY recommend against the later. You will end up owing significantly more on the next car than it's worth.
It would be better to try and sell the current car yourself, take the $ from the sale to pay off the current loan.