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How do you trade in a vehicle you still owe money on?
We have a minivan we bought from a dealer, but we need to downgrade to a smaller vehicle. Unfortunately we apparently bought it for more than it's worth, so how can we trade it in or sell it so that we are free and clear to get another car?
3 Answers
- Anonymous1 decade agoFavorite Answer
If you trade it at the dealer you have to pay it off first. Best thing, sell it privet, then buy the other.
- Anonymous1 decade ago
This same question gets asked here about 10 times a day and the answer is always the same. If you owe more than the car is worth, you are "upside down" and have no equity to trade or sell. There is no way you can be "free and clear" of money you owe, except to pay it off.
If you trade, a dealer will offer to "help" you by rolling your negative equity into a new loan on a new car. However..........lenders will not lend you more than 100% (or less) of the value of the new car.
So, if you have $5000 negative equity in the old loan and want to buy a $10,000 car, the loan would be for $15,000. No lender is going to give you a $15K loan on a $10K car. You would have to come up with $5000 cash down payment to buy the cheaper car.
- 1 decade ago
well since you wont get what you owe on it, when you trade it in the will minus they trade in value from what you owe and add it on to the car your buying. for example...
a dealership offers you 10,000$ for your minivan but you owe 15,000$ dollars on it. if they new car you want costs $20k, you will end up paying $25k for it.
