Can You Trade Your Car Even If You Still Owe – Knowing how to sell a car upside down without losing thousands of dollars is scary. If you’re looking for ways to cover the negative equity in your car, you’ve come to the right place.
He had a very bad habit of trading cars with negative equity, losing thousands each time. In fact, I financed ten cars in ten years.
Can You Trade Your Car Even If You Still Owe
What is the definition of insanity? Are you doing the same thing over and over again expecting a different result? Yes, that was me.
Value Your Car
I’m sure many of you can relate. It’s true that we’ve all made stupid financial mistakes, but this one takes the cake.
My husband and I bought a new car years ago and after a while we decided we were done after financing $48,000 and a minimum monthly payment of $733.
We were so tired of paying the equivalent of a house for a car. We already knew our credit scores, so we joined our credit union.
We sat down with our banker and explained our situation. Get the NADA value of my car so we can know exactly how far out of the “hole” we are.
Trade With Us!
As a former banker, I know NOTHING about how banks and credit unions decide how much to loan on cars. They don’t even use Kelley Blue Book.
In my opinion, KBB is nonsense. That is not an accurate estimate of the car. If banks and credit unions used KBB, I might feel differently, but they don’t.
Car dealers tend to use KBB to their advantage when offering trade-in values for your car. So let’s say you go to your bank. You talk to your banker and find out you have $5,000 in reverse.
If your local bank doesn’t want to work with you, try Lending Tree. Their rates are low depending on the loan, but you can click here to see if it is a valid option.
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Whatever you do…let the dealer take care of your loan. You lose all power when they know your entire financial situation.
You now know the value of your car and have decided that you owe $5,000 more than you can sell it for. If you’ve looked at vehicles and have an idea of what you’re looking for, he talks about them.
Let’s say you find a 2009 Buick Enclave and it’s priced at $12,000 with 90,000 miles. They can enter the specifications of the car on the NADA website and also give you a retail value. Sometimes a bank or credit union will lend up to 125% of the retail value.
It’s good to know beforehand, because if you’re upside down, you can sometimes squeeze out a little bit of that negative equity. But in that situation I would always recommend gap insurance…always.
Sell Your Car
Check with your insurance company and lender to see if they offer gap insurance that covers vehicle replacement. Not all gaps are created equal, but it’s always worth comparing apples to apples and making sure you’re not overpaying for this product.
Car dealers typically make most of their money selling life and disability insurance, and they mark up the rate (especially on used cars).
Before you begin, you need to know your credit score. You can find your FICO score here. You’ll then talk to your bank to explore some options. The next place you would go after speaking to your bank if you have an idea of how much you will be shelling out is Carmax.
They will give you a quote and Carmax will offer to buy your car for a certain amount.
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That’s not nonsense. It is not cheap. It takes them about 45 minutes to appraise your car and you can walk away with a piece of paper saying they will buy your car for $X in 7 days.
Therefore, you need to make sure you are at the end of the decision-making process before doing this. But take that piece of paper… fold it, put it in your bag and now you’ll go to the dealership where you were looking at the car. And you don’t want to give away too much information about what you want to do.
Go to a dealership and request a test drive of a particular car. They will ask if you have a car to trade in. Don’t say you still have a job.
Don’t lie, just say it. “You know. I’m not sure what we’re going to do yet.” So come in, test drive the car! See if you like it. And be sure to get pre-approved from your bank too, but the less the dealer knows about your financing, the better… Don’t share your plans yet.
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Knowing your credit score will help you get the best interest rate. Then you sit down with them and explain that you want to negotiate the price of that car. Try to negotiate the purchase price of the car without entering your dealership first.
Car dealers are going to hate me for this, but that’s what we have to do. As consumers we must protect ourselves.
See if they will negotiate a price for you and then tell them if you are trading in your car or don’t want to tell them if you feel weird.
Also, let them know that you received an appraisal from CarMax, but you are waiting to see what their offer is. Don’t share the Carmax offer yet.
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You are about to receive an offer. They will write down some numbers and want you to sign something that commits you to buying the car. They may ask you to sign the document.
Don’t Ask if you can test drive the car while you think about it overnight. Take your car and drive to your competitor’s dealership.
With the other car dealer and tells him that he is looking at this car, but do they have something similar? And sit down and do the same process with that other distributor.
If you have to do it at multiple dealerships that day, do it, then get in the car and drive around the dealerships. I know it seems like a lot of work, but I promise you’ll get a better deal.
Jay Hodge Chevrolet
I was actually able to get $500 more than what Carmax offered me, but interestingly, the Honda dealership where I bought my car (new) offered me $2000 less than Carmax, and they told me. “We want your car.”
Because we bought it new at that dealership. He was 2 years old and they took very good care of him so they could put him on his lot as a certified family member for $4,000 or $5,000 more than what they were offering me.
I hope these tips have helped you a little to understand how to sell a car upside down. Of course, you will need money.
I would never recommend using credit cards to offset negative equity…because even 0% credit cards…are not a good idea.
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You can tell yourself that you will pay off the balance during the promotional period, but that is too risky. Unsecured loans are very difficult to get if you don’t have A+ credit, and because of the risk, the interest rate is usually very high for these types of loans.
There are many ways to earn extra money from home, by getting a second job or starting a side hustle. Here are some ideas.
If you’re thinking about selling a dumped car, but are worried about finding a car that’s reliable enough for your family’s needs, here’s a list of third-row seats for large families. You can also look into AWD options if you live in snowy areas.
These are all midsize SUVs with available third-row seats. We had a Buick Enclave and loved it. It was about 9 years old, but with leather, heated seats, a rearview camera, Sirius XM radio, and AWD, it met my family’s needs for under $10,000. If you find a used car in good condition that is still alive. dealer warranty (at no additional cost), this is the route you want to take for your Dave vehicle.
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So to summarize. Talk to your bank about your options. Go to Carmax. Get your rating. Use your estimate as leverage and keep some knowledge like fuel with other dealers so you can get the best deal when you trade in a more expensive car.
Let me know if you have any questions or comments. I hope this helps you understand a little more.
Life is a collection of memories and experiences. There are ups and downs. I am very grateful for God’s grace and
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