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Help me understand car buying process.
Help me understand car buying process. / Jokes, Polls & Anything Else / 2:25 PM - Thursday January 03, 2008
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A Thinker (Female, 26-28) asked:


Someone please help me understand how the car buying process works. Say I owe $10,000 on my car, and I go to the dealer wanting a new car. Say the new car I want is $23,000. Does that $10,000 get added to the $23,000 and that is what my payments get based off of?


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A Guy Critical (Male, Charlotte, 36-45, Technical) answered:

Screenname: yaddayaddayadda


Here's some help. Don't buy a new car until you've paid the old one off.

But yes, you still owe the $10,000 + the $23,000. Making that $20,000 car cost you damn near $40k. When it's all said and done.

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A Sportif (Female, 26-28, Administrative) answered:

Screenname: chdeck


You owe 10K but what is it worth?
If the car is worth less you will have negative equity which will be added to the cost of the new vehicle.
Good luck.

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A Creative (Female, 26-28, Who Cares?) answered:

Screenname: auntykazz


no. If you were to trade in your old car, they would take the value as it is, and deduct what you owe on it. The remaining balance (credit or debt) would then be applied to the amount owing on your new car.

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A Creative (Female, 46-55, Who Cares?) answered:

Screenname: joybird


My husband did some crazy shit like that a few years back. I almost divorced him over it. That is not a smart thing to do. Why on earth anyone would roll one car loan over into a new loan and then extend their payments outs to east bejesus and pay all that interest is beyond me. Keep what you have and pay it off and next time around get a car that is 2-3 years old and pay several grand up front. You'll get a better interest rate and you'll have it payed off in no time. Then do the same after that. Never, Never make a car deal that leaves you with what is referred to as a "top heavy" loan. Your car appreciates quickly and you will owe way more than the car is worth making it impossible to resale.

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A Sweet Sarah (Female, 36-45, Who Cares?) answered:

Screenname: atenderheart42


they will give you a small trade in allowance (check what the book value of your car is) and that will be deducted. so if they say trade in is 5,000 you will be paying 10,000 + 23,000 - 5,000. so your new car will be 28,000 plus finance charges.

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A Mr. Nice Guy (Male, Cleveland, 36-45, Executive) answered:

Screenname: hubbyochris


Exactly, but you can subtract the trade in value of your old car. If it's worth less than you owe, you'll pay a much higher interest rate on the new loan.

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A Mr. Married Guy (Male, 56-65, Science / Engineering) answered:

Screenname: welloone


Sort of. Just consider it as two transaction.

First the dealer is buying your current car. Let us say that the car is worth 12,000. You own 10K. He offers to buy it for 11,000. You give him the car, he gives you 1,000 and pays off the 10,000 you owe.

Then he sells you a new car for 23,000. He takes the 1,000 he just gave you, and you now owe 22,000. Payments are arranged, and you leave witht he new car.

but if during the first transaction, he only paid you 9,000, then you still have to pay off the other 1,000 you owe on that care, and the 23K for the new one.

If you do it, always make it be two transactions. You negotiate the best deal that you can on the car you want, then you talk about the car you already own.

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