GEE-OTTO Posted January 10, 2011 Share Posted January 10, 2011 Hello again, My friends and I were chatting about cars and such and one wants to buy/trade his car for another used that is $100 less than what he owes on his current car. Now i told him that Im sure that won't work as dealers are snakes first and the Banks are more slimy than the latter. But in common talk:) Im pretty positive you cant take a car that is worth more than he one you want and trade it for that car. If that is the case wouldn't they owe you or something? Then the convo shifted to: what if they are the same value and amount owed? Like I own a car that I owe $13000 to the bank on and I want to trade for a car that is $13000how does that work ? I told him to wait since his Acura is at market value, and sell out right and start from scratch OR not do it at all Link to comment Share on other sites More sharing options...
BAC5.2 Posted January 10, 2011 Share Posted January 10, 2011 What you owe for a car isn't necessarily what it's worth. If you owe $13000 on a car, and the dealer is only going to give you $7000 for it, then you are -$6000. If you sold the car, you could pay that $7000 to the bank and still owe $6000. If you wanted to buy a car that costs $13000, then you'd add the amount you owe, and take a loan out for $19000. It's called being upside down on a loan, and banks and car dealers will simply roll the amount remaining into the new loan. If, for some odd reason, you owe $13000 and the car is worth $13000, then you start at ground zero. "Trading a car in" isn't actually trading. You are selling the dealership your car. So they'll give you $13000, which they can apply to your old loan (thus zeroing it out), and then you'll have to take a new $13000 loan out for the "new" car. Happens all the time. I sold Nissans for a while in 2006. One guy came in with an 04 or 05 Audi A8, and wanted out of it. He wanted an "SUV" that he could use as a winter car so he could garage his 'vette. He took a liking to the Murano. At the end of the day, our dealer cut him a check for $1300 because his Audi was worth more than the Nissan. How disappointed the used car guys were when it turned out the trans needed to be replaced. [URL="http://legacygt.com/forums/showthread.php/proper-flip-key-interesti-159894.html"]Flip Key Development Thread[/URL] "Genius may have its limitations, but stupidity is not thus handicapped." - E. Hubbard Link to comment Share on other sites More sharing options...
wpmarky Posted January 10, 2011 Share Posted January 10, 2011 It works, my friend recently traded his GTR for a 2011 STI. EZ explanation: The dealership will pay off the remaining loan amount, and will start a new loan for the new amount for the new car. Realistically, It would have to benefit the dealership a great deal for a straight up trade. That's why it's better to sell private party before buying from the dealer. I went to the Nissan dealer with my friend, who tried to trade is fully optioned out g37s and trade it for a new 370z base model. They wouldn't do it. Link to comment Share on other sites More sharing options...
GEE-OTTO Posted January 11, 2011 Author Share Posted January 11, 2011 No my bad I meant to say it is WORTH the same as the car he wants. I know they will easily tack on the negative interest to the next loan.The car he wants and the car he has are worth the SAME in value Link to comment Share on other sites More sharing options...
shutterbc Posted January 12, 2011 Share Posted January 12, 2011 Same value as in the car he's trading has the same trade-in value as the "new" car's dealership sale value? My general approach to trading in a car is to avoid doing it unless I have a real pressing reason to do so. Any way you slice it you stand to lose money in the transaction (fees, interest, taxes, etc.) unless of course you know you'll have to put significant money into the car you're trading. Link to comment Share on other sites More sharing options...
Drift Motion Posted January 12, 2011 Share Posted January 12, 2011 No my bad I meant to say it is WORTH the same as the car he wants. I know they will easily tack on the negative interest to the next loan.The car he wants and the car he has are worth the SAME in value only works if its worth the same value in the dealer's mind aka auction price not in your mind or KBB or whatever estimate site you use Link to comment Share on other sites More sharing options...
AZZMAN Posted January 12, 2011 Share Posted January 12, 2011 Save. Pay cash for the car it's cheaper in the long run and you don't need to deal with the slimy bank. Link to comment Share on other sites More sharing options...
GEE-OTTO Posted January 12, 2011 Author Share Posted January 12, 2011 Yeah MY thoughts were, sell the car, take proceeds and apply to the one he wants. Link to comment Share on other sites More sharing options...
BAC5.2 Posted January 12, 2011 Share Posted January 12, 2011 Does he owe money on the car? If he owns the car, and the dealer says it's worth $13000, and they have the car he wants for $13000, then all he will end up having to pay is taxes, titling fee, and tag processing fee. [URL="http://legacygt.com/forums/showthread.php/proper-flip-key-interesti-159894.html"]Flip Key Development Thread[/URL] "Genius may have its limitations, but stupidity is not thus handicapped." - E. Hubbard Link to comment Share on other sites More sharing options...
spec.B Dream Posted January 12, 2011 Share Posted January 12, 2011 Not sure if any other states are like Nebraska, but here you only pay sales tax on the difference of the purchase price and the trade value. When the tax savings are figured, it often ends up being the better deal to trade in than sell to a private party. Link to comment Share on other sites More sharing options...
BAC5.2 Posted January 12, 2011 Share Posted January 12, 2011 I believe that's true everywhere, actually. Good thought! It's much easier, in general, to pay cash. Plus, then you have no debt! [URL="http://legacygt.com/forums/showthread.php/proper-flip-key-interesti-159894.html"]Flip Key Development Thread[/URL] "Genius may have its limitations, but stupidity is not thus handicapped." - E. Hubbard Link to comment Share on other sites More sharing options...
CTATV Posted January 12, 2011 Share Posted January 12, 2011 Does he owe money on the car? If he owns the car, and the dealer says it's worth $13000, and they have the car he wants for $13000, then all he will end up having to pay is taxes, titling fee, and tag processing fee. Link to comment Share on other sites More sharing options...
Nflea7 Posted January 16, 2011 Share Posted January 16, 2011 I just traded my car for a 05 LGT similar to the situation you are talking about. The bank owns the title until you pay it off. If your friend wants this car he needs to take his trade to the dealership and see what they will pay him for it. Typically depending on the dealership your friend would get around fair to good KBB trade value for his car. It works like this, IF the dealership says your friends car is worth the price of the one he wants they will buy his car and pay off the loan, then your friend would basically get a new loan on the car he wants. They won't swap cars. If there is a difference in price he will wind up paying sales tax on the difference plus title reg docc fees etc. That he should be prepaired to pay in cash. The drawback to selling it privately is he will have to take the buyer to the bank for the title etc, long story short most cash buyers or people who will finance north of 13k privately want the seller to have title in hand. I just sold a 14k lexus private sale on craigs list, only way I could do that was I had title in hand, he got a loan for the car the bank wouldn't approve the loan if I couldn't give them a copy of the title. Link to comment Share on other sites More sharing options...
Magic Marker Posted January 16, 2011 Share Posted January 16, 2011 I traded in my 08 Impreza for a 2011 Legacy. I actually had $5k in positive equity based on the Guaranteed Trade in Program and what I owed on the loan. I just rolled the $5k as the downpayment for the Legacy. Easy transaction. I could have tried to sell the Impreza private party, but it was worth ~ $17.5 and from my personal experience that is hard to do private party w/o a lot of paperwork. 2011 Volvo S60T6 & 2013 Volvo XC60T6 Polestar Link to comment Share on other sites More sharing options...
Lojasmo Posted January 30, 2011 Share Posted January 30, 2011 If the dealer is willing to give you, in trade value, what you owe on the car, it is a good deal. At least in Minnesota, the car you buy will be tax free (because the dealer is paying the tax on the trade) If you can swing it, do it. Edit: already said. Link to comment Share on other sites More sharing options...
cypher0117 Posted February 17, 2011 Share Posted February 17, 2011 That's why it's better to sell private party before buying from the dealer. Some situations (although rare) it is better to sell to the dealer. I bought a honda for $1000 that needed a new $40 transmission bearing, fixed it myself in a weekend, beat the hell out of the car for 6.5 years and multiplied the things wrong with it by at least 15 and trade it in to a dealer for $3500 towards a LGT. I loved that car.... Link to comment Share on other sites More sharing options...
wpmarky Posted February 17, 2011 Share Posted February 17, 2011 Was that during the cash for clunkers period, and how much off the sticker price did you pay? Was the LGT new or used? Just cuz they write $3500 in the trade in value box, doesn't mean you're getting a good deal. Sure they might've given you a high trade in value, but if your new car price didn't drop much off sticker price, then they're still making alot of money off you. If you could've only sold the honda for $1000, but were able to take $3000 more off the LGT's price, then that would've been a better deal for you. In my experience, all the dealerships I went to were willing to take more off the sticker price after I sold my car and didn't have to deal with trade in values. Link to comment Share on other sites More sharing options...
cypher0117 Posted February 17, 2011 Share Posted February 17, 2011 this was about 8 months ago. My old honda didn't qualify for cash for clunkers either. I would not have been able to get $1000 selling on my own. The windshield had a crack spanning the width of the car, half the windows didn't work (wood blocks in the door to keep them closed), 200k+ miles, rusting having a hay day on the rear quarter panels, a/c broken, and beginning to consume a lot of oil.. not worth much more than a few hundred bucks. The LGT was an 05 with 40k miles on it. after the $3500 off on my trade in i paid $15250. I'd say I paid a fair price, not great, but not bad. But after all was said and done, I probably could have hagled more had i sold the car on my own for much less. Link to comment Share on other sites More sharing options...
Epperson Posted March 9, 2011 Share Posted March 9, 2011 I believe that's true everywhere, actually. Good thought! It's much easier, in general, to pay cash. Plus, then you have no debt! It's true most places, but in a handful of states, including Virginia, the sales tax is on the entire purchase price of the new car. Link to comment Share on other sites More sharing options...
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