Serious question. Trading Car in FAQ's - FMVperformance.com : The site for all your Ford Mazda and Volvo needs
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post #1 of 16 (permalink) Old 03-17-2006, 09:25 AM Thread Starter
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Serious question. Trading Car in FAQ's

Okay, I tried google, but all I really got was mostly information on buying a NEW car. Stupid info below, skip next two paragraphs if you don't care

I've had my Mazda 3 for 1 year now. I know mileage effects the price greatly. I am not realistically considering trading my Mazda 3 in right now. But the Mazdaspeed 3, Subaru WRX, or maybe even a one year or two year older car just to get some lower payments are a possibillity.

Two things. I make about $17,000 a year and still live at my house. My only real monthly bills is about $50 a month for dentist for awhile (my preimum on my insurance was met, so now im paying out of pocket) lots of work down, fillings, extractions, root canal >_<
and $40 for Cable.

So how exactly does trading a car in work? I know the main rule is to be ahead on your payment not under.... or something or other. When you trade a car in, does the rest of what you owe on the car get added onto the new car?

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post #2 of 16 (permalink) Old 03-17-2006, 09:36 AM
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Re: Serious question. Trading Car in FAQ's

You have to pay off the old car before you can get the new car. In other words, whatever they give you "towards the new car" first goes to pay off the old car... any remainder then goes to the new car.

Generally trading in a car that you don't own outright is not going to lower your payments, because the loss of value on a used car is greater than any slight difference in the cost ofthe new car.
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post #3 of 16 (permalink) Old 03-17-2006, 09:45 AM Thread Starter
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Re: Serious question. Trading Car in FAQ's

Ohh. So say. This is all theory here:

So say I still owe $14,000 on my Mazda3

Dealership will pay $10,000 of it.

I still owe $4000

I buy a new car for $24,000.

That $4000 is then added into the financing for the new car?

Is that generally it?
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post #4 of 16 (permalink) Old 03-17-2006, 10:03 AM
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Re: Serious question. Trading Car in FAQ's

That is exactly it. And one thing to remember is that the more negative equity you roll into the new loan (that 4k left over) then the higher your interest rate is going to be. That means higher payments.

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post #5 of 16 (permalink) Old 03-17-2006, 10:18 AM Thread Starter
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Re: Serious question. Trading Car in FAQ's

So is it better to trade in super early, or really late after you made lots of payments?
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post #6 of 16 (permalink) Old 03-17-2006, 10:23 AM
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Re: Serious question. Trading Car in FAQ's

The best bet in trading in your car would be to wait until you owe less then what the dealership will give you for it. So say you owe 10k on your car and the dealership will give you 12k. That is 2k you can put as a down payment on a new car.

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post #7 of 16 (permalink) Old 03-17-2006, 10:39 AM
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Re: Serious question. Trading Car in FAQ's

although, in all honesty, you will get more money selling the car yourself, paying off the loan, and giving the dealer the remainder as a cash downpayment.

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post #8 of 16 (permalink) Old 03-17-2006, 12:46 PM
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Re: Serious question. Trading Car in FAQ's

my mazda dealer wanted to give me $4000 for my 2002 focus with 26000 miles. i walked out put it on autotrader and sold it in 2 days for $6300.


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post #9 of 16 (permalink) Old 03-17-2006, 01:08 PM
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Re: Serious question. Trading Car in FAQ's

[quote author=m3rz link=topic=42344.msg621955#msg621955 date=1142606716]
Ohh. So say. This is all theory here:

So say I still owe $14,000 on my Mazda3

Dealership will pay $10,000 of it.

I still owe $4000

I buy a new car for $24,000.

That $4000 is then added into the financing for the new car?

Is that generally it?
[/quote]

This type of "deal" is no "deal" at all. You're getting bent over BIG TIME. Never. Ever. Roll over negative equity to another car note. This put's you "upside down" as they call it. In your example, you are upside down in auto loan speak; you owe more on the note than the car can be sold or traded for. Never trade until you have positive equity in deal. This could take 3-4 years.
Trading a car ALWAYS results in you getting screwed (that's versus selling it outright yourself).
I would highly recommend that you sit back and enjoy your car. What your talking about doing is a financial disaster.

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post #10 of 16 (permalink) Old 03-17-2006, 03:12 PM Thread Starter
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Re: Serious question. Trading Car in FAQ's

Just out of curiosity, why is it a disaster?

Im not doubting it is, just not sure. Is it because you're paying off the extra $4000? Just curious cause Im a noob, and it's the only way to know for sure.
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