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Question for those more experiened with car dealers:

Discussion in 'The Lounge' started by BottomBouncer, Jul 11, 2005.

  1. When you trade a vehicle in, to the take the difference of the amount owed and the trade in value and add it to the amount of the car you want to get?

    How do trade-ins work?

    Thanks for any info.........
     
  2. LakeRaider

    LakeRaider EEEEEK!

    Take the price of the vehicle you want. Take the payoff on the vehicle you DON,T want. add them together. Then ol' slick the sales man will tell the bank you put X amount down on the vehicle You Want ( which they will happily finance for you) which you really didn,t put down (read-mumbo-jumbo-poof) and you drive off with the upside down equity vehicle You Want that you will Not Want next year and will trade in! Therefore you will never pay the dang thing off and should have bought a new vehicle at a lower interest rate for a lot more years at a lower monthly payment, so you can trade it in and be upside down in that vehicle and be totally happy with your purchase of a vehicle you hate in six months!! So why wait? Buy the vehicle you don,t want and get it over with now!!!! LOL Hope that helped?
    Just kidding! Invest in property and drive some gas miser. You'll be happier! (and wealthy with these fuel prices) :) Raider

    Dang, that was pretty good eh! LOL
     
    Last edited by a moderator: Apr 30, 2015

  3. LOL......thanks for clearing that up for me. I HATE going to dealerships.
     
  4. Whaler

    Whaler Whaler

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    All car dealers are liars and scam artists, and they have years of experience. No matter how good a deal I make I always feel I've been taken to a certain extent.
     
  5. Reel Lady

    Reel Lady Dreams DO come true!

    Bottom Bouncer..
    You would end up in what they would call a "Negative Equity" situation. Even though the salesman will convince you that this is a good thing, it really isnt. For instance... here is a (worst case) scenerio... You end up buying this new car using your old car for trade. Lets say that this new car is worth 10,000.00... lets also say that you still owe 5000.00 on your trade in. Total amount financed is 15,000.00 on a vehicle valued at 10,000.00. Here is where it could get ugly.... Lets also say that this new car was involved in an accident and was considered a total loss by the insurance company. Ok... so the insurance company issues you a check for the replacement value of your car. BUT you are left owing the negative (5,000.00) equity from your original trade in. Insurance companies do offer "Gap Coverage" which would basically cover your negative equity situation for situations where the payoff amount is greater than the present value of your car. If I were you I would definitely consider that if you do end up in a negative equity situation.
    Something else you may want to consider is paying more than your monthly payments and have the additional dollars be applied directly to principal. Read the fine print of a contract to make sure that you can do this as not all lenders will allow this. If you do pay more than you are supposed to for your monthly payments, make SURE that you write in the memo of your check to "Apply $$$$ to principal", otherwise they legally can apply it towards interest (which doesnt help you one bit!!!!!!)
    Good luck to you.. I know that car dealers can be intimidating for a first time buyer. But just remember.. YOU are the one calling the shots... not them. You tell them what you want/need. Either they will oblige or you can take your business elsewhere. Remember... ANYTHING is negotiable. I mean, you can ask for anything.. you may not get it, but you can still ask for it. (things like Valet Service, Free loaners, 1 year free oil changes, etc...)
    Have fun with it!
    Marcia
     
  6. shuvlhed1

    shuvlhed1 Banned

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    more money on your trade in than a dealer will give you for it, better off selling it yourself or just try to live with it until you can at least break even. Negative equity is seemingly never ending cycle for some people. Don't be one of those people.
     
  7. AndroDoug

    AndroDoug Duke of Bucketmouth

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    Shuvlhed had alot of correct things to say.

    I regret it now, to a certain extent, but I was a car salesman for 3 1/2 years. I was very good at it, and it got me my house bought and paid for. I now am a self-employed subcontractor for Direct Tv and Dish Network.

    The trade in "values" that are in the "blue book" are not what you are going to get. You have to take into account what they have to put into it to make it sellable plus the market value for your particular type of vehicle, ie - gas guzzling SUVs and dime-a dozen mini vans are worth less than the book says because they are harder to sell. However, if you have an economy car, especially a highly thought of brand, then it might sell at a premium now with gas the way it is. But if you add in the potential sneakiness of the salesman, you will get a fraction of what you think you might. In addition, people tend to "over-rate" their own vehicles. People many times think their vehicle is in a higher rate level than it actually is.

    Sell it your self.

    The biggest peice of advice I can give you is to be EDUCATED in the price of what the dealership actually pays for a car, and have the paperwork printed off the internet with you. Make sure you add in the delivery costs that the dealer has to pay. From there, nogotiate a fair PROFIT margin for the dealership on your TRANSACTION. Don't negotiate over the car, but negotiate the profit over the COST of the car. This will end all tricks. Also, ... by all means, once you get the dealership's "best offer", PHYSICALLY GET UP ONCE YOU ARE DONE, SAY THANK YOU, BUT NO THANKS. TELL THEM YOU WILL CONTINUE TO LOOK AND PHYSICALLY LEAVE, OR AT LEAST TRY TO LEAVE THE DEALERSHIP!!! THE SALESMAN WILL TELL YOU TO WAIT AND HE WILL GO GET THE FLOOR MANAGER. YOU WILL THEN GET THE BEST DEAL, OR AT LEAST FIND OUT YOU DID INDEED GET THE BEST DEAL. THEN SIGN THE PAPERWORK.

    I can't stress enough how important it is for you to try to leave. The salesman ABSOLUTELY CANNOT let a prospective buyer just leave, at least without one last attempt by the sales manager. That it what he is there for, to make sure every person that walks in, leaves with a car. The salesman will get effing REAMED if a prospect just leaves without talking to the boss.

    This is valuable advice from a car sales veteran. Follow it and you will not be taken. Trust me (that is an oxymoron if i ever heard one!). Do these things and you will get the best possible deal. I HATED people that followed this routine!

    DO IT!!!!
     
  8. jwg299

    jwg299 jusluv2fish

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    well bottom ill give you an example:
    lets say the car you have now cost 20,000 new, and you owe 10,000 on it.
    the car you want cost 30,000.
    they give you 7,000 for your trade, which leaves 3,000 left on the 10,000 balance.
    they will then add that 3,000 to the price of the new car "30,000" to give you a total of 33,000.
     
  9. Fastlane

    Fastlane Fishless as usual

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    Good luck bottom. You have gotten some pretty good advice along with some that is fair at best.
    and
    Is some of the best advice so far. Like I told you in the PM, I work for a dealership and for the most part, everything I told you has been touched on in here except for Marcia's advice on the gap protection. If you trade in negative equity or buy with no money down, no rebates, etc. you should really investigate it. It will save your backside if something should happen. You may even be able to get it from your own insurance company.

    Funny thing is about this post is that if I had posted openly what I pm'd to you, I would have been flamed and this post would have turned into a pissing match. But a few of the post are almost verbatim to what I told you but because I work for a dealer, certain people (person) on this board would have opened up an all out flame war.

    Oh well, good luck with your intended purchase and again, if I can help you in any way, let me know.
     
  10. rockbass

    rockbass Banned

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    I had a 02 Dodge Neon I bought new and owed 10000 on.....I traded it in and they paid it off......I was surprised to say the least. Of course it did not come easy. I had to bargain with them, but they did pay it off.
     
  11. Check your PM's F.L.

    I'm getting a couple different messages from people and want to get the facts.

    On one hand, people are saying the amount owed + the amount of the car you are buying.


    On the other, people are saying that the amount owed minus the trade in value is added to the car.


    SO IS IT: For example, I owe $16000 and the trade in value is $14000. The difference of the two = $2000. Do I add that $2000 to the price of the car I am buying?

    OR, do I take the $16000 and add it to the price of the car I want?
     
  12. Fastlane

    Fastlane Fishless as usual

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    Owe 16000
    -Trade 14000
    Neg equity 2000
    New Vehicle 7995
    Finance 9995 plus tax title and fees est @ 850
    Total loan 10845

    I am working on some better figures for you in a pm. Is it the green 97 4X4 on their site?
     
  13. Yeah, thank you cary much. That is what I thought, only made sense....otherwise, why would I trade in a car and still being paying the amount I owe on it plus a new car? Might as well have both cars and have something to show for it. What dealership to you work for?(you can pm it to me if you prefer) Obviously you now know the price and type of vehile I am shooting for, do you know if the place you work has something of the same?

    Thank you, and all the other folks who helped out. It's almost like having a second family on here ;)
     
  14. Fastlane

    Fastlane Fishless as usual

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    PM'd you a couple messages.
     
  15. rockbass

    rockbass Banned

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    I thought the Gap protection was for if you total the car and you owe more than the insurance will give you for the car. That is the way I understood it when I bought my 02 new back then. They told me it really would not do much for me in several years but in the first year or 2 when what I owe is way more than what the car would be worth on the books. they said if I happened to total it and the insurance would only pay 9000 and I owed 10000, the gap would cover the extra 1000 bucks.
     
  16. Fastlane

    Fastlane Fishless as usual

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    Gap insurance pays the "gap" between what you owe and what the insurance company settles for. If you roll negative equity into a new loan, your "gap" will be greater for a longer period of time than if you put money down without a trade. A good rule of thumb is to know what the NADA trade in value is. If you are financing more than that, you should consider gap. This is especially true if you are on a tight budget and do not have a few grand laying around to play with. Here is a prime example of why you should get gap:

    Young lady, single mom, buys one of the most rapidly depreciating autos know, a Cadillac Catera, Really doesn't like the car, has some trouble with it mechanically, etc. etc. etc. Comes in to trade for a new used car but she owes 11,000 on the Caddy. Car is worth $5000 on trade in due to miles and the check engine light was on along with some cosmetics. She decides to look at new Jeep Wranglers to get the Chrysler employee pricing and rebates to help with the negative equity. Buys a $23000 invoice Wrangler for $1700 +/- under invoice and took the factory rebates of $1000 so the Jeep was $19300 but has to roll the $6000 negative equity into the loan. So after taxes and fees she financed around $27500. This was about 2-3 weeks ago. She goes on vacation this week and gets into an accident and totals the Jeep. Insurance says it is worth about $19500 (because it is used now even though it has less than 900 miles on it) and she owes $27500. But she is a smart gal and bought gap from her insurance agent which is paying the balance for her. She is coming back to buy a new Jeep in a few days now and guess what? Her new loan is only going to be for about $22000 saving her about $120 a month in payments and she is upgrading a few options she could not afford before. She never made a payment on the Jeep and gap improved her situation.
     
  17. Sounds like you are getting things worked out on your question but for anyone else reading this Andro had some good advice. Twice I have given a salesman my bottom line price nad been told they couldn't sell the car for that low of a price. I left and both times before the end of the day the salesman had called my house and told me that now they could sell the car for what I was willing to pay. No doubt the salesman got reamed after I left and was told to call and accept my offer.

    Scott
     
  18. Nickadams

    Nickadams goenfurshen

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    That was an interesting story Fastlane. I thought it ws going to end BADLY though...She must be very smart :)