My current are loan is 40,000 and I want to trade in the car for a car that cost 30,000 how does that work?

My current are loan is 40,000 and I want to trade in the car for a car that cost 30,000 how does that work Asked by hi2010 12 months ago Similar Questions: current loan 40 000 trade car cost 30 work Recent Questions About: current loan 40 000 trade car cost 30 work Business > Financial Services.

Similar Questions: current loan 40 000 trade car cost 30 work Recent Questions About: current loan 40 000 trade car cost 30 work.

Two ways. You either pay off the old car, or, if the bank will allow it, you roll the balance into the loan for the new car. The determining factor is what you can get for the old car.

For example, if the old car is worth $15,000 on a trade in, then you would have a balance left on the old car. They would apply the $15,000 trade in value towards the new car, leaving $15,000 that needs to be financed. That $15,000 is added to remaining balance on the old car.

Since you don't say what you owe on the old car, you just have to add the outstanding loan balance on the old car to the amount that needs to be financed on then new car. Then you have to see if the bank or finance company will loan you the additional money. In the past, rolling outstanding balances into new loan was very common, but not any more.

Finance companies and banks are very particular these days in combining loans. This is also a bad idea, because since the new car will start to depreciate the day you drive off the lot, you sort of find yourself paying for two cars, even though you own only one. The only plus you might have is if the old car is worth $30,000.

Then you can trade the old car for the new and just finish paying the balance on the old car. They will roll the balance onto the new car.

Not well in the first year or two of the loan. Cars lose about 1/3 of their value in the first week, so you're "upside-down" for the first few years-- you owe more than the car is worth. So to get rid of the car during that time you have to PAY IN to make up the difference between what you owe on the car and what it will sell for.

A painful lesson for those that jump into buying more car than they can afford. But if your car is worth MORE than what you owe on it, then you get cash back from the sale or trade-in, and you can apply that money toward the new car. In the old days, many car dealers would "roll over" what you owed on the trade-in into a new car loan, which was GREAT for them-- they're getting more interest back.

Not so great for them as it's increased risk-- if you stop paying, they end up eating the shortfall on the new car plus the rolled-over shortfall on the previous one. Not so good for you either as you're paying back for two cars, now for even longer, so you end up paying much more in interest. In the future, consider buying a cheaper, used car, one that won't depreciate a ton before you get it home.

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How to get a car loan with no proof of income.

I'm puzzled why some Askville questions indicate you can win 21 points, or 30, or even 40. How does that work and why?

Can you tell me where to find books on understanding the financial services industry.

I traded my car in for another and the dealership has not paid off the loan for the trade in car. What rights do I have?

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