Dealer Trick? Subtracts trade in but adds it back to the loan.

[Anonymous]

Hi there,

Your sage advice is badly needed.  The dealer is trying to get over on me. 

Here's the scenario:

I have been approved to purchase a 2016 Nissan, Rogue S for $25,780. (How can I get this lower?)

I  have a car that I am upside down about $3000-$3500.  The total amount owed on the car is $6871.

The dealer has given $3000 for the trade in but has also added the $6871 back to the balance sheet.  I told him it doesn't make ANY sense.  If you give me $3k but you add the $6871 to the $25,780 you aren't giving me ANYTHING.  You are Ripping me off. 

I think I should find a zero or low interest card and payoff the negative value so that the trade in will cancel the loan.  Sorry, if I'm not making sense I've been at too many dealerships and dealt with way too much stupidity in one day.

[Anonymous]

Unfortunately unless I'm missing something that's exactly how it works. Let's say your car Is worth 1k, you owe 5k on it, but the car you want to Buy is 15k.
You MUST pay atleast 15k for the new car. Your original car you owe 4k on still even after the trade in. You can't have a auto loan without the car itself, so the 4k you owe is rolled into the new loan. 5-1+15=19k.
Your new loan ends up at 19k. I just traded in my dart that I owed 11.8 on. Negotiated the trade to 8.8. My new frs was 17.2. The 3 I owe is rolled into the new loan to make it 20.2, before taxes and fees.

I negotiate out the door prices, because their all inclusive and to me it keeps the dealer from trying to pull one over on you. In your case unfortunately it doesn't look like they are. You can try telling them you want x price out the door and let them deal with the numbers of making the new car lower or trade in higher. I'm sure they may have told you a final price after taxes. That would be the out the door price

[JBjunior]

It sounds like you are getting exactly what you asked for, as mentioned.  $6871 - $3000 for the trade and you are eating the $3871 that you are in the hole already.  Did you expect them to give you $3,000 for your car and for them also to eat the $6871 so they are out $9871 for a $3,000 car?  If you weren't getting anything for your trade, you would be paying the "full price" of the car and rolling the full $6871 into the new loan.

[Anonymous]

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@JBjunior wrote:

It sounds like you are getting exactly what you asked for, as mentioned.  $6871 - $3000 for the trade and you are eating the $3871 that you are in the hole already.  Did you expect them to give you $3,000 for your car and for them also to eat the $6871 so they are out $9871 for a $3,000 car?  If you weren't getting anything for your trade, you would be paying the "full price" of the car and rolling the full $6871 into the new loan.

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No.  I do not expect them to eat the $6871.  But I know when I am being cheated.  The dealer is saying that I will pay the full price of the car plus roll in $6871 after the trade in value of $3000!!!  If they give me $3k credit  for the car, then $3871 is left.  This amount ($3871) should be rolled into the new loan.  Not $6871 (the total amount owed on my car) rolled into the loan. 

[Anonymous]

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@Anonymous wrote:
Unfortunately unless I'm missing something that's exactly how it works. Let's say your car Is worth 1k, you owe 5k on it, but the car you want to Buy is 15k.
You MUST pay atleast 15k for the new car. Your original car you owe 4k on still even after the trade in. You can't have a auto loan without the car itself, so the 4k you owe is rolled into the new loan. 5-1+15=19k.
Your new loan ends up at 19k. I just traded in my dart that I owed 11.8 on. Negotiated the trade to 8.8. My new frs was 17.2. The 3 I owe is rolled into the new loan to make it 20.2, before taxes and fees.

I negotiate out the door prices, because their all inclusive and to me it keeps the dealer from trying to pull one over on you. In your case unfortunately it doesn't look like they are. You can try telling them you want x price out the door and let them deal with the numbers of making the new car lower or trade in higher. I'm sure they may have told you a final price after taxes. That would be the out the door price

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What you wrote makes sense.  The dealer does not.  I owe $6871 on my car.  The trade in value is $3000.   $6871-$3000=3871. 

The dealer is saying that my trade payoff is $6871, not $3871.  

[mynameainttracy]

Unless you can take a pic of the paperwork so we can see it sounds like they are doing what they are supposed to. For paperwork reasons they have to show the $6871. They can't just tack on your negative equity of $3871 on its own without showing the math.

If I were you I would just negotiate more. Get them to either give you more for your trade or bring the price of the Rogue down, however they need to work it. In the case of my recent auto deal they kept raising the value of the trade instead of lowering the price of the new car. I'm sure somebody somewhere is looking at the sales prices and that number may matter more.

[Epcot]

Looks ok to me.

You say you are buying the new car for $25,780 and the rollover negative equity as you mentioned above is $3,871. So $25,780 + $3,871= $29,651.
Now the dealer is saying they are selling you the car for $25,780 but giving you a trade in credit of $3000. So $25,780 - $3000= $22,780. Now they have to add the current payoff to your loan, that's where the negative equity comes in. $22,780 + $6871= $29,651 (The car has to be paid off from the current lienholder)
The result is the same, if you post up the dealer worksheet we may be able to have a better understanding of where you think the dealer is trying to rip you off. Is there a Carmax near you so you can get a second offer for your current vehicle? Hope this helps!

[gibeon]

The payoff amount and the value are different things. This causes so many problems, but the dealer is correct.

To simplify:
+$25000 new car
+$7000 old car
-$3000 trade in value
=$29000 FINANCED

They HAVE to pay off your old auto loan, so whatever that number is, gets rolled into the price. They then DEDUCT the value of your trade in.

OR they could give you NEGATIVE ~ $4,000 for your trade.

[jeffm4688]

If the purchase price of the rogue S is 25780 then the math should work out lke so:

     25780

-     3000 (trade)
--------------

=   22780    

+     1964 (tax on the 22780)

--------------

 =  24744 

+    6871 (balance of old loan)

---------------

= 31615 (excludes title & plate fee's if appicable)

is how it would work in NY (and assuming any other state in which you benefit from tax savings).

What kind of car do you have now & what kind of options are in the nissan? Just looking, 25780 looks like full MSRP for a fairly loaded S. At least ake a look @ truecar for comparisons on what you should be paying.

[Anonymous]

O.k.  I'm going to take your advice.  Thank you, your advice is very helpful.

I found a 2015 Rogue for 19k.  I am going to ask them for out the door pricing on this. 

They only gave me $500 more, for my trade in so now I'm at $3500 for trade in value for the $6781 I owe. 

I am going to pay the difference( 6781-3500= 3281) between the trade value and balance to get rid of the negative equity.

My credit union will beat their %.

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@mynameainttracy wrote:

Unless you can take a pic of the paperwork so we can see it sounds like they are doing what they are supposed to. For paperwork reasons they have to show the $6871. They can't just tack on your negative equity of $3871 on its own without showing the math.

If I were you I would just negotiate more. Get them to either give you more for your trade or bring the price of the Rogue down, however they need to work it. In the case of my recent auto deal they kept raising the value of the trade instead of lowering the price of the new car. I'm sure somebody somewhere is looking at the sales prices and that number may matter more.

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