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We have a 2004 Toyota Corolla that we owe $2k more than it's worth.
I know, i know...
What I don't know is this:
Can I trade it in for a similar car (pre-loved), lower my monthly payments ($317) and my interest rate (11.99%)? I realize I will still owe $2,000 more than the car is worth since they'd probably tack on the $2k onto the finance, right?
I'm a bit lost when it comes to car financing, as you can see.
Anyone know if that's possible? And how to negotiate the best deal with a dealer?
What on earth is a 'pre-loved' car dealer? Pls let's just call it what it is...
Back to your question, what you have is negative equity (of $2K). You can 'roll that in' to your next finance: it will add that to your next loan balance, so your payments might go up and/or your loan term might increase. Normally I'd advise against that, but if you can reduce your interest rate a lot, it might be worth it.
11.99% sounds pretty high. Was your credit rating very low or did you not realize what rate you were signing up for? If the former, has your rating improved in the meantime? Do you have any idea what rate you could get now?
Yea, you are getting reemed on that rate. You must have purchased the vehicle before the recession and have poor credit. Anyone with decent credit can get at least 5.9%. Thats what I was able to get and I have stellar credit in 08. Now I'm looking for 0.0.% since it is a buyers market now. That high rate is the main reason why you are upside down on the vehicle and thats only going to continue.
That type of vehicle is easy to sell private party, high demand on Corolla's in most areas of the nation.
don't use the dealer financing...go visit a credit union and see what they can do!
in the meantime, can you scrounge up some cash to make the difference up for the negative equity??
do you know your credit score?
and the best way to negotiate is to educate yourself...look up the average trade in value of your car, and before telling the dealer what you found, wait for them to give you what they'll offer...
but realize, the dealer figures you'll probably do this...with that being said, don't be surprised if they offer you more than what you figured the trade in value would be...in this case, pay attention to what they are asking for their vehicle, b/c it's easy to inflate that price to compensate for the overpayment of your trade in.....and yes, i've been in the business.
if you find a credit union will give you a good deal on a loan, keep that in your back pocket...if you find the right deal on the new (used) vehicle, don't reveal your means of financing until you hear from their Finance guy...then compare that to what you can do, and if you can do better, just pass on their financing...
reason behind that, if a dealer knows you're not using their means of financing, that's a hit on their bottom line...and they may not be so willing to negotiate the price of their car...
also, what's wrong with the car, besides the payment and rate?? it may be worth rethinking this situation...
don't use the dealer financing...go visit a credit union and see what they can do!
in the meantime, can you scrounge up some cash to make the difference up for the negative equity?? none
do you know your credit score? in the mid to high 600's last I checked
and the best way to negotiate is to educate yourself...look up the average trade in value of your car, and before telling the dealer what you found, wait for them to give you what they'll offer...
but realize, the dealer figures you'll probably do this...with that being said, don't be surprised if they offer you more than what you figured the trade in value would be...in this case, pay attention to what they are asking for their vehicle, b/c it's easy to inflate that price to compensate for the overpayment of your trade in.....and yes, i've been in the business. so that's great! they offer more than the car is "valued" at?
if you find a credit union will give you a good deal on a loan, keep that in your back pocket...if you find the right deal on the new (used) vehicle, don't reveal your means of financing until you hear from their Finance guy...then compare that to what you can do, and if you can do better, just pass on their financing... will try
reason behind that, if a dealer knows you're not using their means of financing, that's a hit on their bottom line...and they may not be so willing to negotiate the price of their car...
also, what's wrong with the car, besides the payment and rate?? it may be worth rethinking this situation...
don't use the dealer financing...go visit a credit union and see what they can do!
Wrong. Dealer financing is where it's at right now. Tons of 0% offers, or super-low rate offers.
OP, you can trade it in. If your credit is better, you might qualify for a better rate, but keep in mind you're starting $2K in the hole already. A lot of banks these days are going to want to see you make that difference up. If you don't have any cash down, you might not find a better deal.
Also, tacking on $2K extra is essentially another $35 - $45 a month on your payment.
Edit - mid-to-high 600's is decent but not enough to qualify for the better rates. Most are for people 690 or better.
Wrong. Dealer financing is where it's at right now. Tons of 0% offers, or super-low rate offers.
OP, you can trade it in. If your credit is better, you might qualify for a better rate, but keep in mind you're starting $2K in the hole already. A lot of banks these days are going to want to see you make that difference up. If you don't have any cash down, you might not find a better deal.
Also, tacking on $2K extra is essentially another $35 - $45 a month on your payment.
Edit - mid-to-high 600's is decent but not enough to qualify for the better rates. Most are for people 690 or better.
my husband's is better than 690.
the car is in my name now only. would it be better to finance the new one together? would that make a difference?
Wrong. Dealer financing is where it's at right now. Tons of 0% offers, or super-low rate offers.
read the OP...he's looking for a similar car to his 2004 toyota. so, 0% financing on a 5-6 yr old car?? negative.
**to the OP, if your score is in the 600's, definitely visit a credit union...i can almost guarantee you'll fare better there than the dealers financing.
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