I know how to trade in a car that is paid off… but how’s it work when you owe money on the car, especially if the amount you still owe is the same or higher as the book value?
For example, if I have a 20,000 car that I still owe about 15,000 on and the book value for the car is 14,000, how do I trade it in?
Does the dealer make me cover the difference, or will they just not accept the trade in?
Sub-question:
If the loan on which I still owe the $15,000 is actually thru the dealership (or their financial parent) I plan to buy another car from, would it make this chore any easier?
Also, you may get a better deal if you stay ‘in the family’.
Some months ago, the lease on my Chevy Tahoe was up. I decided that I wanted something efficient, so I leased a Grand Am.
Great little car, but once a SUV’er, always a SUV’er, so I went back to my local GM dealer, and asked them what could they do to take it off my hands, and get me into a new truck. I only had the car for 4 months, and technically, I still owed 20 months of lease payements on it.
The dealership ‘bought’ the lease from me at blue book plus a little. All said and done, terminating my lease early cost me just under a thousand dollars. (Which was rolled into my next lease).
Dealers want buisness, and if you are confident enough to wheel and deal, you can get a good deal if you will trade in and get a new car, from the same dealer.
If you still owe, you usually don’t have title. So the lienholder must be paid first. I’ve heard of dealers who promise to pay off what is owed on the car.
This is called being " upside down". I have traded this way on the past three vehicles. I do not want to drive a car that is not under warranty but I can never pay them off before the warranty runs out. So… I trade in this fashion thinking that if I do this upside down thing long enough, I will eventually get right side up again. Ha. Heck, sooner or later they may pay me to take the auto off their hands. Seriously, you can make a deal this way but I think the thrifty and reasonable side of your brain will not be pleased.