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hdtvtechno22
join:2008-08-22
Chicago, IL

hdtvtechno22

Member

Trading a car that has a loan on it still for another car at

what haoppens if you want to trade a car that still paying a loan payment on it and want to buy another car from the dealer?

how does that work
does the car dealer take over your the payments on the remaining loan payments or what?

CylonRed
MVM
join:2000-07-06
Bloom County
·Metronet

CylonRed

MVM

I don't see how this can work as for the title to be switched it generally has to be free and clear.

I suppose the car dealer can pay off the car with cash and then switch the title. Then let you buy the other car. I don't see this happening in the same day.

Real question in my mind is - are you upside down on the first loan? Do you owe more than it is worth?

If you have entered this agreement - it seems to me that would be the first question I would ask the dealer.

hdtvtechno22
join:2008-08-22
Chicago, IL

hdtvtechno22

Member

no i dont have problems paying the loan it just i dont like the car and want to get a new one!

Mospaw
My socks don't match.

join:2001-01-08
New Braunfels, TX

2 edits

Mospaw to hdtvtechno22

to hdtvtechno22
It's easy.

The dealer calls for a payoff on your car loan and gets your balance. This amount is added to the cost of the new car, minus your trade's residual value, of course.

Since this happens all the time, there is paperwork to cover transferring ownership to the dealer, so they know they will own the car once it's paid off. It's usually a power of attorney, but can vary from state to state.

Really simple examples that exclude things like taxes and down payments:

1) You owe $3,000 on your car and it's worth $4,000. If you're buying a $10,000 car, then you'll have a balance of $9,000 on the new car (3,000 - 4,000 + 10,000).

2) You owe $4,000 on your car and it's worth $3,000 (called "upside down"). If you're buying a $10,000 car, then you'll have a balance of $11,000 on the new car (4,000 - 3,000 + 10,000).

There's no freebie and the dealer doesn't do anything special beyond what I mentioned here. Some dealers advertise "if we make a deal, we'll pay off your trade no matter how much you owe!" kind of stuff which sounds great, but really means exactly what I said wrapped in fancy ad speak.

No dealer is going to pay off any loan for you without adding it to the price of your new car somehow. It might not be explicitly set on the buyer's order, but it'll be there. I promise.

PS: Added ... And the dealer will take car of getting the title in hand and from the lienholder. If you have the title in hand (unlikely if you owe money on the car) then you will need to hand it over when you make the deal.

hdtvtechno22
join:2008-08-22
Chicago, IL

hdtvtechno22

Member

thanks everyone that explains it much
makes sense

sapo
Cruising Down Memory Lane
Premium Member
join:2002-09-16
Sacramento, CA

sapo

Premium Member

You should consider selling it yourself especially if you are upside down a significant amount.

ttiiggy
Premium Member
join:2001-03-27
Bozeman, MT

ttiiggy to Mospaw

Premium Member

to Mospaw
said by Mospaw:

The dealer calls for a payoff on your car loan and gets your balance. This amount is added to the cost of the new car, minus your trade's residual value, of course.

Since this happens all the time, there is paperwork to cover transferring ownership to the dealer, so they know they will own the car once it's paid off. It's usually a power of attorney, but can vary from state to state.

There's no freebie and the dealer doesn't do anything special beyond what I mentioned here. Some dealers advertise "if we make a deal, we'll pay off your trade no matter how much you owe!" kind of stuff which sounds great, but really means exactly what I said wrapped in fancy ad speak.

No dealer is going to pay off any loan for you without adding it to the price of your new car somehow. It might not be explicitly set on the buyer's order, but it'll be there. I promise.

PS: Added ... And the dealer will take car of getting the title in hand and from the lienholder. If you have the title in hand (unlikely if you owe money on the car) then you will need to hand it over when you make the deal.
How does one make sure the dealer really pays off the old loan and doesn't leave you with one new car and two payments?

(Seems I remember a story about a dealer going out of business and leaving some owners owing for vehicles they thought they were clear of...) ? ?
jhh
join:2005-05-25
Fargo, ND

1 edit

jhh

Member

Happens, called being screwed.
sailor
Premium Member
join:2003-10-21
Long Island

sailor to hdtvtechno22

Premium Member

to hdtvtechno22
This is from GA but the same caution applies across the country.

»georgia.gov/00/article/0 ··· ,00.html

hdtvtechno22
join:2008-08-22
Chicago, IL

hdtvtechno22

Member

thanks for the article!

way2evil
Premium Member
join:2007-09-14
New York, NY

way2evil to ttiiggy

Premium Member

to ttiiggy
It doesn't matter as the dealer assumes the loan as soon as you sign the paperwork.

Make sure you are getting the right amount for your trade. Go to galves.com to find the price an do not accept a dollar less than what it says.

Mchart
First There.
join:2004-01-21
Kaneohe, HI

Mchart to ttiiggy

Member

to ttiiggy
said by ttiiggy:

said by Mospaw:

The dealer calls for a payoff on your car loan and gets your balance. This amount is added to the cost of the new car, minus your trade's residual value, of course.

Since this happens all the time, there is paperwork to cover transferring ownership to the dealer, so they know they will own the car once it's paid off. It's usually a power of attorney, but can vary from state to state.

There's no freebie and the dealer doesn't do anything special beyond what I mentioned here. Some dealers advertise "if we make a deal, we'll pay off your trade no matter how much you owe!" kind of stuff which sounds great, but really means exactly what I said wrapped in fancy ad speak.

No dealer is going to pay off any loan for you without adding it to the price of your new car somehow. It might not be explicitly set on the buyer's order, but it'll be there. I promise.

PS: Added ... And the dealer will take car of getting the title in hand and from the lienholder. If you have the title in hand (unlikely if you owe money on the car) then you will need to hand it over when you make the deal.
How does one make sure the dealer really pays off the old loan and doesn't leave you with one new car and two payments?

(Seems I remember a story about a dealer going out of business and leaving some owners owing for vehicles they thought they were clear of...) ? ?
By checking with the bank of the loan in question. Just call up / go online and look to see if it's been paid off or not.

thegeek
Premium Member
join:2008-02-21
right here

thegeek to way2evil

Premium Member

to way2evil
forget galves.com, that costs you money. just use the free pricing sites like kbb and nada, etc. plus look for your same car for sale in various places to see what they are selling for. take these figures and subtract what you think is a reasonable amount for what the dealer will have to put into your car to sell it and make a profit.

don't even mention to the dealer that you have a trade until you have negotiated the price of the vehicle you are buying. they will ask you several times if you are trading. don't answer the question, say you want to focus on the purchase price of the car you are buying. say whether you trade or not depends on the deal you make on the car your buying.

check with the bank of the loan to see how to handle the trade off. arrange financing for the new car through that bank, or another bank BEFORE you step one foot on the dealer lot. if the dealer can later offer better financing go for it. but if a bank won't finance your new deal then you have no business buying a new car.

way2evil
Premium Member
join:2007-09-14
New York, NY

way2evil

Premium Member

Anyone who says kbb does not know how to buy a car. Kbb is the most usleess tool you can use. Galves is worth the 5 dollars simply because it is what every dealer uses for pricing. The price you get on galves is the price your dealer will go and sell the car for.

fatalz
Premium Member
join:2003-05-11
Fayetteville, NC

fatalz

Premium Member

said by way2evil:

Anyone who says kbb does not know how to buy a car. Kbb is the most usleess tool you can use. Galves is worth the 5 dollars simply because it is what every dealer uses for pricing. The price you get on galves is the price your dealer will go and sell the car for.
Finally someone who realizes the free websites are useless.

VegasMan
Living the Vegas life.
Premium Member
join:2002-11-17
Las Vegas, NV
·CenturyLink

VegasMan to way2evil

Premium Member

to way2evil
said by way2evil:

Anyone who says kbb does not know how to buy a car. Kbb is the most usleess tool you can use. Galves is worth the 5 dollars simply because it is what every dealer uses for pricing. The price you get on galves is the price your dealer will go and sell the car for.
KBB isn't useless but you should never set your price by them. Here in the Chicago area the only way to know what you are going to get for a car is to find out what the auction site going rate is.

Every dealer around here has access to these prices and will only go by those prices.

GTJiga
06 GT
Premium Member
join:2002-02-02
Azle, TX

GTJiga to hdtvtechno22

Premium Member

to hdtvtechno22
hdtvtechno22, you can also go to any dealer you want. You don't have to go back to the same dealer. You are the buyer, haggle for the price you want on your trade in and on the vehicle you want to buy.

way2evil
Premium Member
join:2007-09-14
New York, NY

way2evil to VegasMan

Premium Member

to VegasMan
Galves is the average auction price for that vehicle.

hdtvtechno22
join:2008-08-22
Chicago, IL

hdtvtechno22 to GTJiga

Member

to GTJiga
said by GTJiga:

hdtvtechno22, you can also go to any dealer you want. You don't have to go back to the same dealer. You are the buyer, haggle for the price you want on your trade in and on the vehicle you want to buy.
I knew that!

CylonRed
MVM
join:2000-07-06
Bloom County
·Metronet

CylonRed to VegasMan

MVM

to VegasMan
Shouldn't auction price be lower than what it will sell for though? Since those cars are going to be resold - the auction price is not the final selling price and I would rather know the final selling price or average final selling price.

If the above is true - the Galves price is only useful for those trading in a car and virtually useless for a private individual selling a car.

way2evil
Premium Member
join:2007-09-14
New York, NY

way2evil

Premium Member

said by CylonRed:

Shouldn't auction price be lower than what it will sell for though? Since those cars are going to be resold - the auction price is not the final selling price and I would rather know the final selling price or average final selling price.

If the above is true - the Galves price is only useful for those trading in a car and virtually useless for a private individual selling a car.
Yes. The auction price is a wholesale price. When a dealer buys a car at auction they buy it knowing it could need work (oil, tires, brakes, etc). The final selling price (retail) is useless to someone trading in a car as a dealer will never give them a price close to that. Selling a car privately vs trading it is almost never worth it due to the tax savings you get for trading a car in.

CylonRed
MVM
join:2000-07-06
Bloom County

1 recommendation

CylonRed

MVM

I have always heard the opposite- mainly you get so much more privately that the majority of the time - far better to sell outright and pocket the extra.

It also looks like any state tax savings would entirely depend on the state...