Trading a car in help

[firefighterjosh]

Just curious on how trading in a car that you still owe on works?

I will use my truck as a example.

I still Owe $7,000 to the bank.
Per KBB my truck is worth $11,000 trade in

Lets say I buy a $15,000 truck and they give me $11,000 for my truck

So that would mean I owe $4,000. Now where does the $7,000 go? Does it just get tacked onto the $4,000? So I would owe $11,000 now?

Thanks

[wykyd450R]

Lets say they give you 11,000....They would take 7,000 and pay the current truck off. Then put the extra 4,000 towards the 15,000 balance on the new truck, leaving you with 11,000 to pay on. Thats how I figure it works anyways.:ermm:

[firefighterjosh]

Thats what I thought too.

[fA_dAvE]

Originally posted by wykyd450R
Lets say they give you 11,000....They would take 7,000 and pay the current truck off. Then put the extra 4,000 towards the 15,000 balance on the new truck, leaving you with 11,000 to pay on. Thats how I figure it works anyways.:ermm:



you are correct. as long as what they give you is more than you owe the rest will always come off the price of the new vehicle. if not then there ripping you off and you need to go elsewhere.

[firefighterjosh]

Good Deal, Thats what I was hoping.

[bulkdriverlp]

yea, thats how it works. but there are a lot of factors they consider when you get your truck appraised by the dealer. damage, milage, tires ect. your better off selling it outright and taking that money and putting it down on your new truck. they money you put down goes straight to the principle (how much was financed) of the loan. if you roll the trade-in on a different vehicle you will pay interest on the whole amount, instead of whats left after you give them the down payment. sorry if it dont make sense...for example if they take your truck in on trade, they wont give you retail trade in of 11k, they need to make money too, they will prob give you 9.5 for example. sell it for 11k. they made 1,500. plus you bought a truck for 15k which they maybe only have 11k into it. so they make 4k of the new truck you bought, also 1,500 off your trade-in. get it. just take in a cash down payment and buy a new truck.

[79400ex]

However, if you can finance that debt from the other vechile at lower inerst it is worth it. Such as going from 7.9% to 0% it is saving yo alot of money. I did that on a new truck 5 years ago. But don't go upside down on your trade-in. That is where you own more than you get for it in trade.

[firefighterjosh]

I am not ever close to oweing more then its worth. Otherwise I wouldn't even think about buying a new vehicle