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Friday, 27 March 2015

Cars & Transportation: Buying & Selling: “Question: How can you get rid of a new car in order to stop paying so much for it?” plus 5 more

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Cars & Transportation: Buying & Selling: “Question: How can you get rid of a new car in order to stop paying so much for it?” plus 5 more

Question: How can you get rid of a new car in order to stop paying so much for it?

Posted: 27 Mar 2015 08:50 PM PDT

There is no easy way out of this.

His problem is that he currently owes more on the loan than the vehicle is worth to trade. This is the problem with buying vehicles with low deposit / long term finance. You are STUCK with it, even if your situation changes. You actually have to come up with extra money in order to pay off the loan and then be able to sell / trade the vehicle.

What you really need to know is the current loan settlement amount. That's how much you would need to pay in cash, to completely clear the loan today. Then compare that to what you can sell the car for. If you owe $10,000 and the car is worth $15,000 then yes you can trade it in, and have the difference as deposit on a different car.
But usually people find it's the reverse. They owe $15,000, but can only get $10,000 for the vehicle. And because it's a long term loan, it takes most of the term to get it caught up. Sure you pay some off each year, but the vehicle drops in value too, often faster than you are paying it off.

Just because someone will lend you the $$, doesn't mean it's a wise choice to buy that vehicle.

Probably you best option will be to do some overtime, make some extra payments on the vehicle, and get "above water" on the loan. Then you are in a position to trade it. That way you aren't paying for the whole 5 years, just the 12 months that it takes to get ahead on the loan.

Question: This girl thinks this car deal is smart i dont!?

Posted: 27 Mar 2015 08:48 PM PDT

Just to clarify on other comment, it is not illegal to borrow for a down payment. As a side note I am not sure why so many people think so many things are "illegal", meaning a criminal act? I see that a lot on yahoo notes.

The misunderstanding is that when buying a home a lender who requires say 10% down wants that to be a REAL down payment, meaning the borrower has those funds on hand. The mortgage lender will verify this by looking at bank/cd/stock statements before making the loan.

Let me back up, it is nice you are concerned about a friend, but a good lesson is understand making a comment or light advice, then dropping it. Hi Friend, you were talking about buying a car, are you sure you can make that payment? It seems high, and 66 months is a long time.
They will say sure no problem I can make the payments, and you say OK good.
That's it, never bring it up again.

As for the deal. Who knows? Purchase price - shop at three dealers for same car, go back an forth at least three times, then you are probably getting an OK deal.
You do not state her income or expenses so there is no way to know if making the payment will be easy or hard. The payment will be around $330 per month.
66 months. You are right, that is a long term. I think 36-48 months is better financial management, but with longer term you get a lower payment and a newer car, which may be a smarter decision than an older car. But it you could say save up, get a larger down payment and use that to lower the loan amount.

Question: Hi,I currently bought a car from Toyota,I finished everything,but didn't give me the car! they gave my friend offer on same car.what to do?

Posted: 27 Mar 2015 07:57 PM PDT

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