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Is it a bad idea to trade in a car halfway through financing

The last post in this topic was posted 2098 days ago. 

 

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So my brain isn't working very well today... I'm trying to figure out if this is a terrible idea or not.

Background: 2 years ago (almost exactly) I splurged and bought a new, luxury SUV. I could afford the payments comfortably at the time and still keep up savings, etc. I had a trade-in of $5,000, but otherwise put no money towards it. Payments are $720/month.

Today, after putting 42,000 miles on it (I have a big commute), I owe pretty close to what the car is worth. (KBB = 24,500, owe 26,500). About 8 months ago, we had a SURPRISE baby, and now I'm paying an unbudgeted $1200/month in childcare, so I'm not able to save as much as I like.

 

So... does it make sense to trade my car in and downsize? I'm thinking I could get something like a modest Jeep Cherokee and knock my payment down a couple of hundred bucks a month, giving me more money to put into savings. Or should I just keep my car until it's paid off? But at that point it will have 100,000 miles on it.

 

I'm so confused... I LOVE my car, but at the time I bought it, I thought we were done having kids, so my priorities have now shifted.

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p.s. - haven't checked my full credit in awhile, but it should be pretty decent. My discover card gives me a FICO reading every month and it's in the low 700s, so credit approval shouldn't be a concern or consideration, hopefully.

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If you trade a vehicle that has negative equity, you have to step way down in what you finance in order to lower your payments ~200.00 monthly.

 

200.00 monthly x 72 months is 14400.00 in principal alone. x 60 is 12000 in principal.

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If you trade a vehicle that has negative equity, you have to step way down in what you finance in order to lower your payments ~200.00 monthly.

 

200.00 monthly x 72 months is 14400.00 in principal alone. x 60 is 12000 in principal.

Yeah that would be the plan. The suv I'm looking at would cost about 15000 less than the after trade in cost of my current one

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Keep your existing car and refinance at DCU for 65 months 1.49%. Your payments will be about $425 a month. You will only pay $1,100 in interest over the life of the loan.

 

If you trade in a 2 year old car, you will take a huge hit on depreciation. You will take a double hit if you buy another brand new car.

 

If KBB value is $24,500 you may only get $22,000 on a trade. Dealers never give KBB values on a trade.

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Keep your existing car and refinance at DCU for 65 months 1.49%. Your payments will be about $425 a month. You will only pay $1,100 in interest over the life of the loan.

 

If you trade in a 2 year old car, you will take a huge hit on depreciation. You will take a double hit if you buy another brand new car.

 

If KBB value is $24,500 you may only get $22,000 on a trade. Dealers never give KBB values on a trade.

 

 

Dealers give NADA values. I have heard from several people that the trade in value are always with NADA values

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Just a quick update. I test drove a couple of crossovers and SUVs and hated them all compared to my current vehicle, so I'm keeping what I have. Now if I could just get all the dealerships to stop calling me :(

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Just a quick update. I test drove a couple of crossovers and SUVs and hated them all compared to my current vehicle, so I'm keeping what I have. Now if I could just get all the dealerships to stop calling me :(

 

 

get thee a google phone number for just these occasions

 

Im glad you're keeping the Caddy... you'd regret getting rid of it.... I like the idea of re-fi.... you could always send extra $$$$ occasionally to pay it off sooner but the obligation of the lower payment would be comfy on a daily basis

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Just a quick update. I test drove a couple of crossovers and SUVs and hated them all compared to my current vehicle, so I'm keeping what I have. Now if I could just get all the dealerships to stop calling me :(

 

get thee a google phone number for just these occasions

 

Im glad you're keeping the Caddy... you'd regret getting rid of it.... I like the idea of re-fi.... you could always send extra $$$$ occasionally to pay it off sooner but the obligation of the lower payment would be comfy on a daily basis

+1 to getting a Google number

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Keep your existing car and refinance at DCU for 65 months 1.49%. Your payments will be about $425 a month. You will only pay $1,100 in interest over the life of the loan.

 

If you trade in a 2 year old car, you will take a huge hit on depreciation. You will take a double hit if you buy another brand new car.

 

If KBB value is $24,500 you may only get $22,000 on a trade. Dealers never give KBB values on a trade.

1. What is DCU?

2. This huge hit on depreciate/buy new car is confusing me. Could you explain? I am in a similar-ish situation. My lease has come to an end and am planning on buying out at end of term, and getting an auto loan to buy. Then immediately after - want to trade it in to get into a different vehicle. There is equity bc v low miles under 5k miles. The car is 3 years old. How would I get a hit in this situation?

 

Keep your existing car and refinance at DCU for 65 months 1.49%. Your payments will be about $425 a month. You will only pay $1,100 in interest over the life of the loan.

 

If you trade in a 2 year old car, you will take a huge hit on depreciation. You will take a double hit if you buy another brand new car.

 

If KBB value is $24,500 you may only get $22,000 on a trade. Dealers never give KBB values on a trade.

 

 

Dealers give NADA values. I have heard from several people that the trade in value are always with NADA values

 

What is NADA?

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National Automobile Dealers Association

 

And babies aren't usually a surprise. The positive pregnancy test is. But the baby, by the time it gets here, had been known about for some time...

Edited by dansamy

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