Trading in instead of refinance - help!

[Anonymous]

I'm new to this forum, but I've done a little reading up.

A year and a half ago, I bought a car and got an APR on an auto loan at 13.99%. I had solid income, but at the time, my credit score was in the upper 500's. My score was mosty due to lack of credit, but a few baddies. After my insurance company (State Farm) added my new vehicle, they told me to call them in 6 months so they could see if they could get me a better rate. I called them and they couldn't.

Fast forward to present day, a year and a half later, my score is in the upper 600's, I've never had a late payment on my car, more established credit and less baddies. I considered refinancing my loan to try to get a lower rate and lower monthly payment. However, I'd prefer to roll my remaining balance into a new loan, with hopefully a lower APR, and use the difference in rate to help me upgrade to an SUV. I realize my payments may still be a little more, which is f ine. Also, I am sure I am a little upside-down right now.

I know it's not good to just walk into the dealership and let them run my credit 20 times only to end up taking advantage of me. I've read about the blank check auto loan, and I thought maybe that would be the way to go, but I'm really not sure. I've also considered opening an account with DCU and going that route, but because I also want to trade in my current vehicle, I've got some confusion.

[disdreamin]

I'd do a number of things.  First, decide on what can you'd like to purchase and get a rock-bottom price on it.  Use Edmunds, KBB, truecar.com or sites like them and make sure you know what you want to pay, bottom line, for the new car.  Perhaps put feelers out via email to internet sales at local dealerships.

Also use kbb, and try to find the black book price, to see what you should be able to get for your current vehicle.   If you aren't in a position to sell your current car (I've hear carmax might be a place to try selling outright instead of private party but don't know what they give), your kind of stuck trading I think.  I'd negotiate the price of the car first and then the price of the trade if it were me.  I wouldn't let them talk payments or interest rates, just flat dollars in and out for the trade and the purchase.  Once you have what you want on both sides, then talk financing with them and anyone else who might offer a good rate.

Personally, I'd try to have a CU or other bank financing lined up (pre-approval) once you have the purchase price pretty well hammered out so that you aren't tied to dealer financing, but don't exclude them as a possibility.  They can sometimes offer great rates, depending on promos.

A couple other thoughts - first, use end-of-month and possible end-of-quarter quotas to your advantage if at all possible.   And if the car you are searching for has an internet forum where members share their deals, I'd take a look at what others are paying.  I've found great info on those vehicle-specific forums regarding current pricing.  Sometimes it's way below what edmunds or true car or whatever other web site will provide!