How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Tax.appeal.168 Your Own Question
Tax.appeal.168
Tax.appeal.168, Accountant
Category: Finance
Satisfied Customers: 3443
Experience:  Tax Accountant
58285678
Type Your Finance Question Here...
Tax.appeal.168 is online now
A new question is answered every 9 seconds

hi i currently have a loan on a truck and owe 11550 on it to

Customer Question

hi i currently have a loan on a truck and owe 11550 on it to date including the intrest i want to get rid of it to get a car with better gas millage. the gurentee i got online for a trade in was 10000 leaving a ballance of 1550 the car i want is 10k. will the dealership pay of the total amount and have me pay the diffrence. is this even possible.
Submitted: 3 years ago.
Category: Finance
Expert:  Tax.appeal.168 replied 3 years ago.
Hello and THANK YOU for contacting JUST ANSWER. My goal is to help YOU make YOUR life, a little...LESS TAXING.

In some cases dealerships will do this (absorb your upside down debt) SEE BELOW:

Option 1: Roll-over the existing debt to a new car loan

Benefit:

The biggest benefit to choosing this option is that you will be able to drive that new car off the lot, possibly for a comparable monthly payment.
ent.

Risk:

You will probably be asked to finance a long-term loan, which means you will owe a lot more than the new car is worth, and is going to be worth, for an even longer period of time.

Option 2: Find a new car with an incentive amount that covers your debt

Benefit:

This finance trick is great for covering the amount of your trade-in debt and will eliminate the roll-over effect.

Risk:

Remember that with most incentivized vehicles the resale value is taken out of the car up-front. In other words, you'll find these cars' values drop faster than other cars that do not have incentives, thus placing you in another upside-down position later. NOTE: This is still less risky than Option 1 because, in this case, the manufacturer has absorbed part or all of the negative balance.

Please let me know if I can be of further assistance to you regarding this matter.

Thank you again for using JUST ANSWER.
Customer: replied 3 years ago.

im not quite sure what you mean. theyre offering me 10k for trade i owe 11k on the loan. so theres 1k difference. i want a car that is 10k so the difference is 1k that i will have to finance?

Expert:  Tax.appeal.168 replied 3 years ago.
Hello again Mike,

Sorry for the delay. Unless specifically stated, the dealership is not going to just absorb the $1k. The new dealership will either ask you to pay the 1k, or they can possibly finance the 1k for you. This will depend on the dealership. As it will be more of a financial benefit to them if they financed the 1K, they may suggest you do this.
Customer: replied 3 years ago.

gottcha i know they wouldnt throw it out. i just wanted to make sure i was on the right track. its almost like an even trade then. pretty much gonna have to walk in with the 1 or 2 thousand and pay for the car out right... much rather do this and completley eliminate my car payment.

Expert:  Tax.appeal.168 replied 3 years ago.
Do make sure that you check with the dealership of the new vehicle though. They may have a clause that states that they will pay off your old loan, and you have to deal with them regarding the $1k, difference.
Expert:  Tax.appeal.168 replied 3 years ago.
Hello Mike,

Checking in with you to see if you require additional information regarding the payoff of the truck. if you do not, and you fell that I fully answered your question, I respectfully request that you rate my answer a 3 or above, and complete the short survey that you will receive. Thank you in advance.