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Old 07-31-2011, 06:01 PM
Location: New Jersey
2,715 posts, read 9,117,088 times
Reputation: 1383


Lexus IS!
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Old 07-31-2011, 06:55 PM
Location: Denver, CO
5,607 posts, read 20,181,666 times
Reputation: 5311
Originally Posted by talexy1234 View Post
Not to mention, buying a brand new car was kind of not a good decision (I actually feel like I got pushed into it by my mom a little).
I'm 25 and I recently made my first car purchase-- an '07 Accord, Certified Used from a Honda dealer. It was not an impulse buy-- I was already looking around for almost a month, went to at least a dozen dealerships, test drove a whole bunch of new and used cars, so the car I chose was a calculated decision. A month and a half later, I still like the car (I wish I could have had the means to buy this car when it was brand new 4 years ago), but I regret buying a used car from the dealer when for another $100/mo payment I could have got something brand new (which would have been either a new Accord, 2012 Camry when it comes out in a few months, Subaru Legacy, Mazda6, or Ford Fusion) with 0% or 0.9% financing. I am practically OCD about keeping my cars clean and well-maintained, and it absolutely drives me nuts hearing creaking and vibration noises from different parts of the car. I think it would be a really good feeling to drive a car for a long time and meticulously maintain it, knowing that I'm the original owner and it's been mine since day one. To me, buying a used car is like buying a used sofa-- even if it is super clean, there's always that "gross" feeling of knowing some stranger sat in this chair, probably farted all over it 100s of times and put their grimy hands all over this wheel for 4 years before me.

Yeah, when you buy a brand new car, the second you drive it off the lot it's already worth less-- but it's same exact thing when you buy a used car from a dealer. The difference between the price I paid (sticker price less a small discount, plus dealer handling fees, but not including sales tax and financing interest) and what KBB claims I could receive from a dealer on a trade-in is about $2,600. Not exactly chump change.

Not sure about NC, but in CO when you trade in a car at a dealer, the value of the trade in is subtracted from the value of your new car when it comes to calculating the sales tax you owe. So if you sell your car private party, you pay the full sales tax on the new car you buy.

Private party sales listed on Craigslist make a lot of sense for cars that are under $5k and you can do it as a cash transaction. For cars over $10k it's a lot more complicated and there are a lot fewer listings.

It will last longer, yes, but I am just not completely happy with it. Most girls don't care about what kind of car they drive, but I am pretty into cars and want a nice one - not necessarily luxury, but one that handles better than this one... not to say this one is bad at all.
Yeah, girls are pretty weird when it comes to buying cars-- I know girls who buy a car just because they think it "looks cute." If you do end up getting a different car, I have a suggestion for you-- Mazda3. I test drove one and it was the best handling car I've ever driven (no, I've never driven a BMW-- only comparing it to non-luxury cars).

Problem is, I still owe $$ on this one as I financed it... probably owe about $10K still. What do I do? It only has 4K miles on it so it is practically still new. Can someone explain to me what happens when trading in a car that you still owe money on? (I'm new to this!)
That part is no big deal at all-- as the other posters have said-- as long as you're not upside down on your loan, the "equity" you do have in your car is treated as a down payment on the new car. The logistics are extremely simple. The only question is whether or not you want to spend the money.

Nothing wrong with looking around and test driving, as long as you are extremely disciplined and won't do an impulse buy. Probably your best bet is to keep what you have for a while, maybe another year, maybe 2 or 3 years, and be happy, but if you are going to get rid of it, make sure you know damn well exactly what you want this time around.
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Old 08-01-2011, 11:14 AM
Location: Randolph, NJ
265 posts, read 462,587 times
Reputation: 204
Originally Posted by theother View Post
--DISCLAIMER-- I may not be right on this, but I will try to help you.

A friend of mine was in your same situation he was in a rush to get a car with his mothers help (co sign) he got approved for a car in Dec 2010. It was a really nice car (2010 Scion tc) but two months later he decided he didn't really care for it. So he and I went to a car dealership, he was interested in a 2010 Ford Fusion he told the dealer about his little problem. The dealer said he would be able to buy the car from him, through the dealership and use the car as a down payment for the Fusion I guess people call that a up-side down payment? Meaning you'll be paying more than the car is actually worth but in his case he put a good down payment on the Fusion and everything went well..

Someone may be able to explain this better than I could..but becareful and take your time you should be able to own a car you truly love.
Basically, they sell you a new car and put the short-sale amount into the new loan... so:

You owe: 20,000
Car is worth: 15,000

You are short $5,000 - divide that by # of months financed in NEW CAR DEAL, add it to the payment for the new car and you get a Nissan for the payment of a BMW.
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Old 08-01-2011, 01:19 PM
14,777 posts, read 34,490,118 times
Reputation: 14278
Originally Posted by andrew.mensch View Post
Basically, they sell you a new car and put the short-sale amount into the new loan... so:

You owe: 20,000
Car is worth: 15,000

You are short $5,000 - divide that by # of months financed in NEW CAR DEAL, add it to the payment for the new car and you get a Nissan for the payment of a BMW.
lol, how true.

It's called a negative equity trade and happens quite often, but it requires some maneuvering to make the deal work. What they end up doing on paper is selling you the car you are buying for more than what you are actually paying and then giving you the trade credit so it washes out.

Say you are buying a car and the negotiated price is $20k. You then have a trade that you owe $15k on, but it is worth only $10k. They will sell you the car you are buying for $25k and then trade your other car for the payoff amount, or $15k less the money you owe. So the bottom line comes out as $25k plus tax, title, tag.

It works like this:

New car: $25k
Trade in: -$15k
Loan payoff: +$15k
Equals $25k

It's just a different way of doing the actual math which is:

New car: $20k
Trade in: -$10k
Loan payoff: +$15k
Equals $25k

Where it gets real tricky is that in general you cannot finance a deal that has a LTV (loan to value) that is greater than 120% (excellent credit can stretch that to 130%, really bad credit may only be 110%). That is based on how much the vehicle you are buying is worth on paper, plus 20%. That is the max you can finance and is done assuming you are rolling in tax, title, tag to the purchase with nothing down. If you have enough negative equity, you won't have enough space in the LTV to do the deal without putting money down.


In the OP's situation, the car should be worth more than they owe, so the above really isn't a problem. What they need to consider is that they have probably lost at least $6k-$8k on the Sentra on depreciation. That money is gone. The smart financial choice is to hold onto the Sentra and keep driving it since you have essentially already "pre-paid" for a good chunk of it. However, since you aren't in a negative equity situation, just do what you think is the right move for you and this time really do your homework.
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Old 08-02-2011, 12:17 PM
Location: Southwest Michigan/Miami Beach Miami
1,834 posts, read 2,628,832 times
Reputation: 946
I also have a car I don't really want anymore, but I'm going to keep it for another year. So you may want to do that, just wait a year (which will fly by) and then trade your car in.
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Old 07-13-2013, 02:18 PM
1 posts, read 7,510 times
Reputation: 10
I bought a car considered as new with only 4000 miles on it. I traded in my 2010 Nissan Altima owing on $5003 on it. The dealership gave me $12,000 trade in leaving a balance of $6997. I added another $7000 cash toward the new car. I was still at the dealership after hours completing the paperwork. I drove 97 miles back home . The next day I decided there was not enough leg room in the back. I called the dealership 2 days later to tell them I was not satisfied with the car. They informed me that the car I bought had already been sold to me. I can get another car but, they would have to appraise the one I just purchased. I let them figure out what the appraisal would be and I had already lost $3000. The other car I was looking to buy would have only given me $8000 down toward it. So it seems as though I had already lost around $6000. How long do you have to change your mind about buying a new car before you lose our money?
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Old 07-13-2013, 07:18 PM
2,262 posts, read 5,653,641 times
Reputation: 1712
I thought there was a 3 day grace period when buying a car, but maybe that's state specific. There's no grace period for leasing (at least in my state).
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Old 07-13-2013, 10:42 PM
Location: Out there somewhere...
38,673 posts, read 45,016,991 times
Reputation: 106645
Once you sign on the dotted line and hand over your money you own that vehicle, there is no grace period unless a dealer puts in writing which is a rarity.
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Old 07-14-2013, 03:26 AM
5,703 posts, read 15,481,614 times
Reputation: 8514
I have done this several times. Some were cars I ended up disliking and others were because of a family situation and the vehicle didnt meet our needs anymore. Its really not a big deal unless you are underwater. Most people are if they only put a little bit of money down when the car was financed. Shop around and go to several dealerships. Dont be afraid to haggle. Also watch the fine print, some dealerships will give you a lot more than another place but later you find out they are squeezing in some sort of overpriced worthless warranty.
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Old 07-15-2013, 09:27 AM
Location: Cole neighborhood, Denver, CO
1,123 posts, read 2,325,859 times
Reputation: 1240
It sounds like you already got hosed by a dealer, so why even consider going back to a dealer to make such an awkward deal?

See the car private party. You'll need the buyer to bring his cash to the bank and get the title. It isn't a big deal but you should be upfront to potential buyers that you don't have the title. Then take whatever cash you have left from the deal, and use it as a down payment on another car.
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