Trade-in Process? How do i?

[Astyl 10+ year member]

Hey whats up guys, when it comes to the process of trading in a vehicle you currently have a loan out for, for a new vehicle, im completely clueless, so im looking to try and get some answers

im a 21 year old, i just finished up college and lookin to start life pretty much, ive owned four cars in my life so far, but all of them ive owned outright and had no commitments with any of them

my current vehicle is a 2002 trailblazer that i bought at a used car dealership that i currntly have a loan for and make payments on, i beleive the trade-in value on my truck is something like 4k right now, but i currently owe 7800 on the vehicle, im looking at new cars because i wanna get something new, something like a 2009 Cobalt SS/T / Mazdaspeed 3 / Caliber SRT4 ETC

How does the whole process go? If i go to a dealer and tell them i want to buy a car for say 20 grand and then i tell them i have a trade-in, well the trade-in is only worth 4 grand, so if they pay it off to take it from me, where does the extra 3800 go that they arent putting towards my new car? Is that extra $$$$ getting added to my new bill that i would now have?

For instance

20 Grand Car + 4 Grand Tradein = 16000 - But since i owe 7800 on the vehicle, and i assume the dealership pays off the loan for me so that they can take over the vehicle, what happens to the other 3800 that they didnt put towards lowering my payment? added on the top of the new loan price?

My stepdad had a Hummer that he recently traded in for a Audi after only having it like 2 years and he still owed like 30 grand on the thing so what happened there? did the dealership just pay off his 30 grand loan so he was free and clear and then just put the trade-in value towards the audi?

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[BASSINMYSUBS 10+ year member]

my advice is dont tell them your going to trade in until you can get them at there bottom price then once they agree and sign be like. oh yea i have this to trade in on it..

 

[RKPsk8er 10+ year member]

why would a dealership just pay off your other car loan for you? that makes no sense at all

 

[Astyl 10+ year member]

why would a dealership just pay off your other car loan for you? that makes no sense at all

because the car is no mine to give until the car is completely paid off, therefor the dealership can not take delivery of it until the loan is paid off because i cant sign over the title or do anything with it to legally give them the vehicle

 

[dbeez 5,000+ posts]

Its works like this say the car you want is $20,000..Your car is worth $4000 trade in but you owe $7,800..Your new car payment will be based on the $20,000 new car and add the $3,800 negitive equity you hve on your car new note will be $23,800.. The $4,000 goes to the bank to pay the car off but you never see it and and it does not come off the $20,000..

 

[jmanpc 5,000+ posts]

First, you have to bend over and grab your ankles

 

[Astyl 10+ year member]

Its works like this say the car you want is $20,000..Your car is worth $4000 trade in but you owe $7,800..Your new car payment will be based on the $20,000 new car and add the $3,800 negitive equity you hve on your car new note will be $23,800.. The $4,000 goes to the bank to pay the car off but you never see it and and it does not come off the $20,000..

so basically it all equals itself out if its pretty much 4 and 4, therefor if i wanted to get a new vehicle im pretty much equal right now and can start fresh like i never had a tradein to begin with, money wise

 

[ILLCRACKALUV 10+ year member]

you need to learn car buying techniques..

my advice is dont tell them your going to trade in until you can get them at there bottom price then once they agree and sign be like. oh yea i have this to trade in on it..

this

Dont go in saying omg i have 20k to spend on a car..Then they know exactly what they can get out of you..

Go in and check their cars, compare to some other prices, talk them down to 1% over dealer cost.. Then after everything is done and settled and i mean everything..tell them you have a trade in if they try to screw u over..Just say thats ok and you can get offered more somewhere else..Walk out and simply try it again at another place

 

[dbeez 5,000+ posts]

man you are still going to pay for the negitive equity just it will be put into a new loan and you will end up being very upside down real quick...

 

[clouduz 10+ year member]

i beleive the term is up-side loan they most likely will give you what your car is worth not how much you owe and like the above post said it'll basically carry to your new loan i think not to sure just trying to help

 

[99grandprixGT 5,000+ posts]

you need to learn car buying techniques..


this

Dont go in saying omg i have 20k to spend on a car..Then they know exactly what they can get out of you..

Go in and check their cars, compare to some other prices, talk them down to 1% over dealer cost.. Then after everything is done and settled and i mean everything..tell them you have a trade in if they try to screw u over..Just say thats ok and you can get offered more somewhere else..Walk out and simply try it again at another place

x2 i love when they ask. so what monthly payment would you be willing to pay? im like. let me know the final price and ill let you know if that works.

 

[jshak07 10+ year member]

imo you shouldnt buy a brand new car, because it seems like you get tired of vehicles quick and you are just going to dig youself deeper and deeper

 

[Astyl 10+ year member]

man you are still going to pay for the negitive equity just it will be put into a new loan and you will end up being very upside down real quick...

yeah dude i just hate driving a SUV, its killin me on gas milage and its completely opposite of me because i love sporty cars and i drive a bigass tank thing, i get 250 miles to a tank, i can get like used WRX's or Cobalt SS's for like 10 - 15 grand and still be extremely affordable for me you know what i mean

 

[BASSINMYSUBS 10+ year member]

you need to learn car buying techniques..


this

Dont go in saying omg i have 20k to spend on a car..Then they know exactly what they can get out of you..

Go in and check their cars, compare to some other prices, talk them down to 1% over dealer cost.. Then after everything is done and settled and i mean everything..tell them you have a trade in if they try to screw u over..Just say thats ok and you can get offered more somewhere else..Walk out and simply try it again at another place

exactly. most the time when you get up to walk out they'll be right behind you trying to renegotiate

 

[eharri3 10+ year member]

Let me give you the best advice you will hear in this thread: If the truck runs, keep it. If you aren't a baller yet, it's OK. You don't need to try to be one. You are at the start of your adult life with an itty bitty 7800 bucks to pay off. If you go the wrong route and get yourself into the cycle of accumulating negative equity and dragging it with you from car to car you significantly shorten the amount of time in your life when you'll be without a car payment. It costs you disposable income that could be working for you in other ways and can costs many thousands in interest. The longer you do it, the harder it gets to break the cycle and take a breather from car notes while you still have something new and reliable. You will look ghetto fabulous but hamper your own ability to accumulate the kind of money that will buy you fresh toys while handling your other business.

I held my first vehicle (the one I drove in college), a piece of crap, for 5 years after I graduated and wish I woulda kept it another 2-3. Bought my second one brand new, held it for 5 years (3 without a payment) and wish I woulda kept it for another 3 or 4. Wanted something new but always remember all the other things I could do with that money.

To answer your question: Your trade in amount pays off whatever it can on your vehicle. The leftover part of the loan gets rolled over into the next loan. A 28thousand dollar car becomes a 31,800 dollar car. If you pay that down to 20K then trade it when it's worth 15, whell your next 31,800 dollar car becomes more like a 36-37000 dollar vehicle. Each time you do it you pay interest on interest. Each time you do it you increase the likelihood that you will either be in a state of perpetual car payments or else when you try to pay something off once and for all you'll make payments for 6 years or something like that and by the time it's paid off it's got miles and wear and tear and not as much usable payment-free life left.

I know none of that is what you wanted to hear, but like someone else said it sounds like you're getting ready to turn around and grab your ankles. Trading to save gas money almost never makes any sense. Why take on a 300 dollar or more payment per month and play thousands in interest over the loan to save, what, 100 bucks per month maybe? If you think about it you're not really saving any money.