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Is there a way to trade in your car if you are upside-down on the car loan?

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βˆ™ 2012-08-02 20:22:54

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Well that is going to depend on if you mean upside down like with a mortgage where you owe more than the car is worth, or upside down as in you have been missing payments. If you simply just owe more than the car is worth and have descent credit then yes you can trade the car in. If you have been missing payments then you probably wont be able to trade it in, because the missed payments will have affected your credit and a creditor surely isnt going to give you a line of credit on a trade in, where you are actively taking on more debt than you had previously that you couldn't afford to pay consistently. Hope that makes since.

The best advice would be. If you are upside down on a vehicle. Hold on to it, because in order for you to trade you will have to take on significantly more debt. Basically you are taking on the debt from the difference of what you owed on the car vs what the dealership paid you for the car, plus the debt of the interest and fees of the new car. So Id suggest hanging on to it until you pay it off or try and pay more on it every month until you get to a point where the cars trade in value is more than what you owe. I say trade in value because its very important to look at trade in value, rather than private party value if you plan to trade it in.

2021-01-21 15:22:44
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2012-08-02 20:22:54
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Yes, but the money you still owe (negative equity) must still be paid. Example: you owe $10k on a car and the dealer will only offer you $8k in trade - the $2k difference must be paid. In some cases, your lender or dealer financing will allow you to roll the negative equity into the new payment as long as the loan to value (LTV) does not exceed a certain percentage. Therefore, it is difficult to get into a less expensive vehicle because of the LTV threshold. Dealer advertisements claiming to pay off your trade are simply doing as described above, and this can be dangerous for those with eyes bigger than their wallets.

2012-08-02 20:22:54
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Q: Is there a way to trade in your car if you are upside-down on the car loan?
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